Mr. Kalanick Goes To Washington: How Uber Won In DC

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Uber won a huge victory today, as the Washington, D.C. city council approved a legislative framework for a new class of transportation services. The company has had its ups and downs with local regulators throughout the country, from San Francisco to New York to Boston to Washington, D.C. But after becoming famous for its “Don’t ask permission, ask forgiveness” stance on entering new markets, Uber won this victory in part because it’s softened its stance against regulators and is starting to work within the regulatory system.

First, what the D.C. ruling means: First and foremost, the District has ruled to define a new class of for-hire vehicles that use digital dispatch and charge by time and distance. That’s neither a taxi or a traditional sedan, so the Uber service fits the bill. It also creates a single licensing regimen for taxis, sedans, and other for-hire vehicles, and sets standards for price transparency — mainly requiring riders to get a receipt. Most importantly, though, it eases some uncertainty around how services like Uber will be classified or how regulators in that region will deal with them.

The passage comes as Uber has been working closely with D.C. lawmakers, particularly Councilmember Mary Cheh, who was once seen as an opponent to Uber and services like it. Uber CEO Travis Kalanick has publicly denounced regulators in various cities for kowtowing to the incumbent taxi services that are seeking to see its service shut down. At TechCrunch Disrupt, he even claimed, “Every city we go to, eventually the regulators will make something up to keep us from rolling out or continuing our business.”

And while Uber maintains that its service is legal in each region it operates in, that hasn’t stopped local regulators or governments from seeking to change rules that would make its service illegal, or at the very least less profitable. Some have also sought to define its service in a way that would make it subject to the same regulations as taxi operators.

In the face of this, Uber appears to be shifting strategies while trying to keep its app operational. For a startup that had previously eschewed politics, Uber is learning how to play the game. It’s lawyered up for sure, and it’s also hiring lobbyists. One example is in California, where Uber has retained the services of Jerry Hallisey, who had previously served on the California Transportation Commission. The company hasn’t disclosed how much Uber is spending on legal advice or lobbying, but it’s surely eating into the company’s bottom line.

It’s also making its presence felt at various industry conferences, most notably at the International Association of Transportation Regulators (IATR) conference in Washington, D.C. early last month. Uber had a number of representatives at the conference, which is usually only attended by policy wonks and the owners of some large taxi and limousine companies. Kalanick showed up, along with a cadre of local Uber employees from the various cities that it operates in.

The idea was to get in front of regulators and regulations that could affect its ability to operate in various cities. That’s probably a good idea, since the IATR issued new draft proposals for regulations that seek to eliminate the use of so-called “rogue apps” for electronic hail (e-hail) and mobile payments — apps just like Uber. The IATR’s recommendations frankly seek to clamp down on apps that might interfere with the current taxi regime in various local markets. Uber reportedly had dozens of staff on site from local markets, seeking to buttonhole individual regulators looking at those proposals.

The new strategy appears to have paid off — at least in D.C., as Uber is planning a victory lap press conference to discuss the D.C. ruling and likely to suggest that other cities adopt similar provisions. It might not be asking forgiveness, but for Uber, playing within the political scheme is proving to be more fruitful than condemning it.