Regulators in Washington, D.C. unveiled a proposal Wednesday to greatly deregulate the city’s taxi service and expand an app that will compete with Uber.
Cab drivers in the nation’s capital are struggling in what they call an unfair market due to Uber attracting business away from traditional cabs as customers opt for the company’s lower fairs and convenience. The D.C. Taxicab Commission (DCTC) released a 17-page proposal Wednesday outlining their plans, which includes the aggressive creation of a new app based “vehicle for hire” service called Xclass, reports WAMU.
While city regulators said it was not intended as a way to directly compete with Uber, they will follow the streamlined model that allows instant connectivity between customers and vehicles. Xclass, which will begin as a pilot program, will be separate from standard street-hailing cab services and will have a massively deregulated operations process, allowing for greater flexibility with fairs, drivers and vehicles.
“The pilot will use an open network of licensed drivers, cars, and businesses committed to safe practices. There will be Xclass drivers, Xclass vehicles, and Xclass businesses,” an outline of the program from the DCTC read. “There are important differences, including: limited or zero up-front application fees, expedited driver licensing, and reduced equipment costs.”
Current taxi companies can apply to join the Xclass service, as can new businesses looking to enter the market. Participants will have to register with DCTC and meet what they call “basic requirements.” Xclass will be a participatory program where competitive rates are set by the “digital dispatch services” involved in Xclass.
“It’s 100 percent digital,” Commission Chairman Ernest Chrappah told WAMU. “There is no street-hailing involved here. We are reducing the barriers to entry. Seventy-five percent of consumers in our research indicate that they just want a safe ride and an affordable price.”
Xclass drivers will be able to use their own vehicles and forgo traditional taxi cab tools like dashboard fare meters, as the entire process will be completed through the app. The city had a soft launch of a digital hailing app last year, and while digital hailing rates have jumped up, its still not a widely known service and offers limited features. Currently, the app simply sends a cab to your vicinity and gives a cost estimate equal to a regular cab fair. Chrappah admits the app will need to undergo large scale changes to its current capabilities, reports WUSA9.
“In terms of the explosive growth in digital hails, and from the data we’ve seen around the depressed wages of our drivers, and from the data on customer preferences, we think we are at a crossroads,” Chrappah told WAMU. “Instead of having a bifurcated system of public versus private vehicles-for-hire, it can be a truly integrated transportation system.”
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