The council’s move is unprecedented. The city’s Taxicab Commission has traditionally regulated taxi companies, which maintain their own fleets of cars, while Uber is simply a call service for independent limo drivers — a sort of middle man.
“We don’t own limos,” Kalanick told TheDC. “We connect them with riders.”
But “the council has the authority to give the Taxicab Commission the regulatory powers that it needs,” Barry told TheDC.
“It’s hard for me to understand the angle,” Kalanick said. Speaking of Councilwoman Mary Cheh, who sponsored the original price-floor legislation, he said: ”What I can say is it’s pretty clear with all legislation that she’s put forth, that there’s a number of provisions there attempting to protect the taxis from services like Uber.”
“If you look at the rationale for the law, which is in every law that the District passes — you’ll find in this rationale that it was actually really clear — they said they’re trying to keep Uber and services like it from competing with the taxi industry,” Kalanick added.
Cheh declined TheDC’s request for comment, but she said after her legislation’s initial defeat that she would like to work with Uber to find a mutually beneficial settlement.
“That’s a Republican point of view,” Barry responded to the charge that the Taxicab Commission would ruin Uber. He challenged his opponents to prove how the commission would hurt taxi competitors. “No regulations,” he said sarcastically. “Let capitalism work.”
“This is called regulatory capture,” explained Dr. Matt Mitchell, an economist at the free-market Mercatus Center, a research hub based at George Mason University. ”And it’s the idea that government agencies that are supposed to regulate certain businesses have a tendency to get captured by the business they’re supposed to be regulating, and can become a tool by them. It’s been long recognized by economists.”
“This story illustrates that, quite often, the power of government and the power of business move in the same direction,” added Mitchell, who has has written about the Uber-city council battle in the past. “So here is one example where regulations are being used to benefit entrenched interests, meaning the taxicab interests. Regulations can be very helpful to firms, because they can be used to hobble ones competitors.”
“Of course business likes big government,” Mitchell continued. “If you can’t get customers on your own, you can always use government to box out your customers, and I think this is a perfect example: The taxicab lobby is very powerful, they’re very well connected to politicians in D.C., and they’ve had a very strong impact on this policy.”
Barry stuck to his guns, saying he is also worried about protecting his constituents who have complained that Uber is too expensive.
Barry’s office failed to provide copies of constituent complaints when TheDC asked him to document that claim.