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Cheh Shelves Uber Amendment After Backlash from CEO and Customers
At a breakfast meeting with her colleagues today, Councilmember Mary Cheh (D-Ward 3) reversed her plans to introduce an amendment to the taxicab modernization bill that would, among other things, put into legislation new "sedan-class" rules that would effectively bring the upscale livery service Uber into compliance with D.C. regulations.
Cheh's decision comes in the wake of a rampant backlash to the amendment, which Uber CEO Travis Kalanickdenounced yesterday as a mandated price floor in an email to his customers. At today's D.C. Council breakfast, several members mentioned that since Kalanick's email went out, they were inundated with impassioned emails from Uber customers. Jack Evans (D-Ward 2) said he has received more than 5,000 notes.
The amendment would have mandated that luxury sedan services charge no less than five times the minimum of the $3 flag drop collected by standard taxicabs on rides that are measured by time and distance. Uber's pricing model includes a $7 base fare plus $3.25 for each mile traveled and 75 cents for each minute a car is hired, with a $15 minimum for all fares.
In his email, which was also published on Uber's corporate blog, Kalanick accused the D.C. Council of stifling his business:
Consequently they are handicapping a reliable, high quality transportation alternative so that Uber cannot offer a high quality service at the best possible price. It was hard for us to believe that an elected body would choose to keep prices of a transportation service artificially high - but the goal is essentially to protect a taxi industry that has significant experience in influencing local politicians.Kalanick's rebuke caught Cheh, who believed her office had drafted an agreeable piece of legislation, off-guard. In an email to her staff and fellow councilmembers, Cheh wrote that she and representatives from Uber hammered out an arrangement that would put the company in accordance with local regulations and prevent future incidents like the "sting" conducted in January by D.C. Taxicab Commission Chairman Ron Linton.
"Several months ago, Uber contacted me and asked to work together to legalize services like Uber in the District," Cheh wrote. "Since then, I have met with Uber many times, negotiated in good faith, and believed that I had reached an agreement with them last week."
Cheh, who leads the Council committee that oversees the livery industry, wrote she was "deeply disappointed" by Uber's rejection of her amendment. At today's breakfast, Evans and Michael A. Brown (I-At Large) said that they would introduce a measure that would strip out the $15 minimum. A few moments later, Cheh said she would rescind the amendment entirely. She called herself "flabbergasted but flexible" on Uber, according to WTOP's Mark Segraves.
There are differing accounts on how Cheh's now-shelved amendment came to be. Though Cheh's intraoffice email suggested cooperation with Uber, the company said otherwise. Kalanick says his side and Cheh's office were never as close as her email suggested. In an phone interview, he rejected the idea that there was an arrangement in place.
"There was no agreement," he said. "We have always been opposed to price fixing."
Kalanick also said that Uber did not see the text of Cheh's amendment until 4 p.m yesterday, when it was far too late to recommend any language changes. And he contended that even without Cheh's amendment, Uber is not breaking any rules. In a Twitter conversation with the Post's Mike DeBonis, Kalanick said the meetings with Cheh left Uber staffers feeling "strung out."
"We are legal as is," Kalanick told DCist. He would not elaborate on the "strung out" phrase.
Had Cheh's amendment been adopted, it would have effectually imposed a price floor on Uber's operations in D.C., potentially crimping its plans to introduce UberX, a more moderately priced service that employs vehicles less luxurious than its standard-issue Lincoln Towncar. The UberX service is already in place in New York and San Francisco, but Kalanick said his company will have to "wait and see" the fate of Cheh's amendment before continuing with plans to introduce it into the Washington market.
Kalanick has his defenders, though, not the least of whom is Rep. Jason Chaffetz (R-Utah), who tweeted his support for the company.
In the mean time, Kalanick said that for the remainder of July, Uber's minimum fare in D.C. would be dropped to $12, in apparent defiance of the equation offered by Cheh's amendment.
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