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Uber founder strikes back at D.C. proposed rules for car service

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Local,DC,Liz Farmer

The founder of a popular town car service said imposing price regulations on his company would be tantamount to an act of socialism during his at-times agitated testimony before a D.C. Council committee Monday.

When asked by Ward 3 Councilwoman Mary Cheh why Uber increased its price when demand was highest on the weekends, CEO Travis Kalanick said the supply otherwise could not meet the demand. He said it was similar to "communist Russia how there were long lines for toilet paper" because there wasn't enough of a product everyone could afford.

"Price control by governments, they don't always go well," he concluded. "In fact, I'd say 99 percent of the documented cases don't go well."

Kalanick was testifying before a D.C. Council's Committee on Environment, Public Works and Transportation hearing on regulating Uber, which allows users to reserve sedans and pay via a smartphone app, and other "sedan-class" services.

Some of the proposed regulations, submitted by the DC Taxicab Commission last week, include banning such "surge pricing," where the luxury fare is increased based on how many sedans are available. The practice can double or triple fares during the busiest hours. Other requirements include paper receipts -- Uber customers are emailed receipts -- and companies seeking to operate in the District must have at least 20 vehicles in their fleet. Kalanick said the latter proposal would wipe out three quarters of the drivers that Uber now contracts with in D.C.

Since Uber's D.C. launch late last year, taxi drivers have protested the service, which they said was competing with their customer base despite the higher price. Uber charges a minimum fare of $15, and riders are then charged by the mile and time used at rates that Kalanick said are comparable with what sedan companies typically charge.

The CEO said the sedan-class service already has regulations and that shouldn't be changed just because people were now accessing the service through his phone app.

"Sedans didn't all of a sudden grow horns and get a pitchfork," he said.

Cheh, the committee chair, said she didn't agree with some of the proposals, including the printed receipt requirement. She added she would like Uber to include a price quote for its riders before they reserve a sedan.

"If it's full disclosure and [open] competition, maybe the market should be the regulator," she said, adding, "I don't think there's going to be an obstacle to the full flourishing of these services."

lfarmer@washingtonexaminer.com

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