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#UberDCLove: Fighting Back Against the DC Taxicab Commission’s Proposed Rules

· September 21, 2012

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In case you missed it, this week brought a new episode in the Uber DC saga.  Uber is a classic disruptive competitor being burdened by incumbent-shielding legislation, which has been analyzed several times on DisCo by Dan O’Connor.  Dan’s first post discussed challenges faced because existing transportation regulations were not written with services like Uber in mind.  Dan’s second post explained how the activism of Uber and its loyal customers was able to temporarily stop a proposed amendment by the DC City Council in July.  These regulations have now come back; a Notice of Proposed Rulemaking was released Wednesday night, according to a post from yesterday on Uber’s blog.

The District of Columbia Taxicab Commission (DCTC) isn’t even trying to hide that its proposed rules [PDF] are intended to protect the taxi industry.  For instance 1401.5 says:

No sedan company or association shall operate in the District of Columbia without having first obtained from the Commission a Certificate of Operating Authority, which shall be maintained in good standing with the Commission during all times that the company or association shall operate.

Okay, that’s not that unreasonable.  But how do you get a Certificate of Operating Authority?  1401.5 continues:

In order to obtain a Certificate of Operating Authority, the company or association shall have no less than 20 vehicles either owned or leased by or affiliated with the company or association. . . .

Oh, wait.  You need at least twenty cars to become certified?  That effectively discourages new competition, because it requires an enormous investment in order to enter the market.  I see what you did there.

Sometimes legacy-protecting regulatory interference will be framed in a less obvious way.  As Matt Schruers recently explained: “policymakers and the public may be told that some innovative disruption would undermine consumer protection, safety, or jobs in legacy industries.”  But as Uber CEO Travis Kalanick’s post aptly pointed out, these regulations are purely geared toward preventing competition from Uber, and without any corresponding public benefit:

[T]he DCTC proposed rules continuing its crusade to shutdown Uber’s business in the District and limit transportation options for your constituents.  The set of regulations can only be described as anti-competitive – at the expense of 1000′s of high-paying DC driver jobs, stifling innovation, and against the interests of city residents who need quality transportation alternatives. . . . These rules are not designed to promote safety, nor improve quality of service. They are intended to shut Uber and similar technology companies down.

The DCTC Notice of Proposed Rulemaking [PDF] lists an email address for filing comments within 30 days, and Kalanick’s post also indicated ways to advocate for Uber, including the #UberDCLove hashtag and signing up via Google spreadsheet for Uber’s “activism team.”  (Really though, how many other established companies, let alone startups, have that much customer loyalty?)

Competition

Some, if not all of society’s most useful innovations are the byproduct of competition. In fact, although it may sound counterintuitive, innovation often flourishes when an incumbent is threatened by a new entrant because the threat of losing users to the competition drives product improvement. The Internet and the products and companies it has enabled are no exception; companies need to constantly stay on their toes, as the next startup is ready to knock them down with a better product.