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Uber writes to the city about its taxi demand study

You can see the letter here. They make two basic points: One, the $70 minimum fare for private car trips “serves neither the driver community nor the riding public, and should be eliminated as a matter of public interest regardless of any study”. I agree that this is an excessive level and that it doesn’t need to wait on the outcome of a study on demand for taxi services to be taken up by Council. Two, they charge that the firm conducting the study is a “paid advocate for the taxi industry”, and they call the impartiality of the lead consultant doing the study in question. Read the whole thing and see what you think.

As I’ve written before, I think Uber makes a strong case for changing the city’s taxi ordinances to allow it and its app entry into the market. Since that was published, I have been contacted by one of the people representing the local cab companies, and we are making arrangements to get together so I and perhaps some of my blogging colleagues can learn their perspective. My inclination in these matters is to lean in the direction of whatever makes things better for consumers – see, for example, the saga of Texas’ microbreweries and the effect of consumer choice it had – so I will be very interested to hear what they have to say.

UPDATE: I received the following from Christopher Newport, the Council Liaison and Public Information Officer for the Department of Administrative and Regulatory Affairs:

I appreciate the tone of Uber’s most recent missive, however Mr. Owen’s letter and his subsequent commentary on the City’s study rests on a pretty important assumption: the scope of the study currently underway is limited to taxicabs.

While it is true that the scope of the work being conducted by a contractor we have engaged is limited to taxicabs, that is not the scope of the study we (ARA/City) are conducting.

With respect to the taxicab study, the primary responsibility of the contractor is to collect and analyze data that we do not currently have. I think it is to the City’s benefit that the taxicab industry is being solicited by someone they might be comfortable with; that only increases the probability that we will get a sufficient quantity of high quality information. I have not heard Uber state, yet, that they don’t believe the City is capable of independent analysis of raw data.

The set of aspects of this industry being examined currently is comprehensive in nature. Any revisions to taxicab regulations can potentially have feedback effects on the other categories of vehicles for hire. Furthermore, the vehicle for hire app “universe” is larger than Uber (see Sidecar, Lyft, Taxi Magic, MyTaxi). We have to look at the entire picture. Well, we don’t have to I guess, but it would not be very bright to not take a comprehensive view.

Hope that helps clarify things. My thanks to Christopher Newport for the feedback.


Mark me in favor of this.

A smartphone app could be the subject of the year’s most spirited regulatory battle at City Hall, as lobbyists line up for a fight that pits taxicab companies against a car-service technology company called Uber.

The firm’s entry into more than 20 U.S. cities has sparked lawsuits and cease-and-desist letters from taxi owners concerned for their livelihoods and regulators accusing the firm of skirting the law. Uber says it is merely a broker between riders and drivers, using a smartphone app to make getting a ride more efficient.

Uber must seek a change in ordinance for its business model to work in Houston, said Uber CEO Travis Kalanick. Company representatives first met with city officials in May; a social media marketing push launched in recent days.

The service the San Francisco-based startup wants to offer in Houston is UberBLACK, which would allow riders to hail town cars – also known as black cars or sedans – using the Uber app, alerting the nearest participating driver to respond. The fare is based on speed and distance using each smartphone’s GPS technology, with the fare charged automatically to the customer’s credit card.

Drivers who want to participate are given smartphones with the Uber app installed, said company spokeswoman Nairi Hourdajian, and must pass a background check and comply with all city licensing rules. Drivers continue to work for their limousine company or themselves; they do not work for Uber.

Houston is the last major U.S. city in which Uber does not operate, largely because of the city’s “draconian” regulations, Kalanick said, calling the city’s rules typical of those negotiated by taxi companies to protect themselves at the expense of riders.

“I don’t think taxis in Houston are as readily available as other cities, and (I’d like) to have something like this where you can call, it’s on-demand, they’re there, they’re always very reliable, very respectful,” said Houstonian Natalie Petratis, who uses Uber when visiting her native Chicago.

Uber wants to drop the minimum fare for a sedan ride in Houston from $70 to $5.50; wants regulations changed to enable on-demand service, as opposed to rides arranged at least 30 minutes in advance; and wants to delete the four-car minimum required for new limo and sedan companies, among other tweaks.

This is a no-brainer to me. Regulations that inflate prices while limiting choices are regulations in need of overhaul. Christopher Newport of the city’s Administrative and Regulatory Affairs department correctly noted the parallels between Uber and things like pedicabs, REV Houston, and the Washington Wave. To that list, I’d also add food trucks and their ongoing fight to be allowed to operate downtown.

I have no issue with the cab companies working to protect their interests, and I’m sure Uber will be disruptive to them, but I see no reason to stifle this kind of innovation. I presume cabs continue to exist in the cities where Uber already operates. As such, I see no need to fear it operating here. Uber sent me some information about what has gone on so far and what they’re specifically seeking to change. Here’s the letter from Administrative and Regulatory Affairs that outlines the relevant ordinances; Uber’s response to ARA’s letter; and Uber’s briefing statement about what it does and where it does it. If all that doesn’t have you convinced, note that in addition to using Uber to arrange a ride, you can also use Uber to request an ice cream truck on demand. Need I say more? Hair Balls was on this as well.