Uber's Lobby Seals Washington, D.C


(Preet) #1

What might seem to some as an unusual regulatory request, is, in fact, the culmination of years and a lot of investment in lobbying officials to seal out any competition to Uber. In the D.C. a recent letter that went out from Mayor Bowser's office to Via, an Uber competitor that specializes in rideshare services akin to Uber and Lyft, stated that if they don't widen their coverage to all areas of DC within 90 days of receipt of the letter, they will initially be fined and eventually have their license to operate in all of DC rescinded.

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The obvious question to this letter is WTF?

Since when does coverage of an area have to be a reason for operating a rideshare service? In D.C. there is a district law that requires ride-share companies to cover all the areas of D.C. so that all residents have access to the service. This became apparent when Via got their warning letter that stated that they do not operate in Wards 7 and 8 which are east of the Anacostia River as well as not being present in the upper Northwest and Northeast.

Via's limited operational geo-fence places its entire operations in jeopardy of non-compliance to the Vehicle for Hire Innovation Amendment Act of 2014, that states that all ride-hailing companies using digital dispatch must "provide service throughout the entire District."

Now, to some, this act might sound quite straight forward, but in fact, it is extremely biased to one type of company; a global or national company that has already got full coverage. These companies would only be Uber and Lyft. Ever since Uber the D.C. area back in 2011, it has been lobbying for control over the city. Lyft was successful in entering D.C. in 2013, a year after the new act came out and ever since then other companies such as Bridj, Split, and Sidecar, and now Via is running afoul of the "act" that limits a minimum operational size to all of the D.C area and no less.

This act basically states that if you have enough resources and can immediately saturate a market, then you can work in D.C., but if you are a small company or a big company but starting out a business, you have to make sure you market everywhere and not just in areas of your choice. Its really a very lopsided and focused act that is so glaringly obvious as to who stands behind it. After all, if you want to open a small rideshare company, a local one in District 7 only, with your own car, and app…well, you cannot. Which makes me ask, is the act legal? Or is it going against the very principles of free trade and access to market share? Or basically, is this act "American"?

Via entered D.C. in 2016; it's a rich company, not a small start-up. Its business plan was to start out in the center and slowly expand outwards. This is a sound mode; no one wants to start with "global' coverage and then hope to succeed in the face of an un-saturated market that requires either more cars or more customers immediately.

When starting a new site, all rideshare companies need to "buy" the services of "independent contractors" that will sign up as drivers. At the same time, these drivers want to come and work for a company that provides enough income source, which means lots of registered customers. It's a symbiotic relationship and one that started out from a natural process where drivers and customers sign-on as the service grew. Today it is now considered to be a structured one where drivers expect immediate requests, and customers expect immediate requests filled.

Uber and Lyft have succeeded in creating an entity that is impatient. They want immediate success and this what Uber has succeeded in instigating in D.C., An act that demands immediate success from any competitor that wants to enter their market.

By the way, one of the councilors behind the act is D.C. Council-member Mary Cheh (D-Ward 3), who claims that the reason she demanded such an act was out of discriminatory reasons, where taxis would discriminate which area's they would drive in. This is an interesting claim, and most probably true, but in a sense, one that defies reason. Since taxi companies are usually localized down to a district, where a taxi rank would stand and meter out the requests, as well as taxi's waiting to be hailed in the streets. The concept that a taxi rank would provide service all over a pre-defined area is not sound. This adds to the underlying suspicion that Uber had a hand in this act since it is a perfect way to get rid of taxi services and free up the city for Uber.

My take: DC has an Uber law in place, and Lyft enjoys it as much as Uber. They have control of the US market, and they will not allow anyone to take a bite out of it. First taxi services were the enemy, now its smaller competition such as Via and Gett. What is for sure, is that D.C. is Uber territory, so keep out.

Now, to add fuel to the fire, here is an article that was published way back in 2014, titled " D.C. Ranks as Most Uber-Friendly City in U.S" and appeared in the Washington D.C. CBS Site. basically, the article shows that D.C. was one of the first US cities to Uberify their preferences.


(Andrew Martin) #2

Uber is sealing every state it can, and while the past has produced some exceptional results for Uber, the present and future looks different. Sure, Kalanick has managed to cement Ubers place in the world and cemented the place of rideshare (for now). However, regulators are waking up to the need to “regulate” rideshare just like taxi’;s and this is what the world is leading to. Eventually, rideshare will be fully regulated and drivers that want to work as a “taxi” for a living will need to fulfill certain legal requirements before they can get a rideshare driving license. The “app” is not a technological breakthrough that replaces the taxi rank, it is merely an extension of the taxi rank. I expect that I will have maybe a year of “free-ride” status before the state demands I become a “like a taxi” driver.