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Is the DC Taxicab Commission Risking Trouble With the Federal Government?

An op-ed by a Federal Trade Commission member about DC’s newest taxi regulations suggests it might be.

Photograph via Shutterstock.
With the regulations it adopted last month about what types of vehicles can serve as hired sedans, the DC Taxicab Commission received heaps of criticism, and not just from the usual complainants like Uber. The regulations, which restrict sedan services to larger cars and sport-utility vehicles, also drew outrage from members of the DC Council and the Washington Post’s editorial board, which called for the commission’s outright dissolution.

Add the Federal Trade Commission to the list of aggrieved parties.

In the Post last weekend, FTC Commissioner Joshua D. Wright offered an op-ed ripping the taxi commission for “fighting back to suppress” new forms of cab service like Uber and other car-by-smartphone companies such as Hailo.

The FTC was also particularly outspoken earlier this summer during the public-comment period on the new regulations. It submitted a lengthy statement opposing the DC Taxicab Commission’s decision to restrict sedan service only to vehicles that the Environmental Protection Agency classifies as a “luxury sedan,” “upscale sedan,” or “sport-utility vehicle.”

That regulation, the FTC and companies like Uber have argued, would force prospective sedan operators to go for more expensive and potentially less fuel-efficient cars. Uber, for instance, recently launched a mid-priced line called UberX, which offers rides in cars not quite as spacious as the standard-issue Lincoln Town Car, but still nicer than the average taxi. Uber also wants to build the UberX product around operators who drive hybrids like the Toyota Prius or Ford Fusion. Neither of those models make the EPA lists picked out by the DC Taxicab Commission.

In adopting the regulations though, the commission decided not to take the FTC’s input. The commission’s chairman, Ron Linton, has defended the regulations as measures to preserve competition, but in his op-ed, the FTC’s Wright wrote that competition is best left for the customers to decide.

And Wright continued on to say that the FTC might not be finished with this issue just yet. His last paragraph referenced past actions the FTC has taken against cities over cab regulations:

History teaches that advocacy letters are not the only tools at the disposal of the FTC to protect consumers. This is not the first time the FTC has been critical of bodies that regulate the taxicab industry. In 1984, the FTC brought lawsuits against the cities of New Orleans and Minneapolis, alleging that these cities’ regulatory agents had unfairly combined with operators to impose regulations increasing taxi fares, limiting the number of taxi licenses and engaging in other methods of unfair competition. Thus far, the FTC’s approach to the current wave of regulation in the taxicab industry has been to send advocacy letters to the regulatory bodies. Linton’s comments suggest that perhaps the anticompetitive nature of the new taxi regulations should once again demand the FTC’s full attention.

Those closing words suggest something of a veiled warning to the DC Taxicab Commission. FTC spokesman Frank Dorman says the agency “can’t comment on any possible future enforcement actions,” but Wright’s wording is plenty ominous. Linton was unavailable for comment today, but his spokesman, Neville Waters, tells Washingtonian the chairman felt “personally attacked” by Wright’s column and that he is planning a longer response.

  • laughtiger

    Has the FTC forgotten who it serves? That is the real question here. It is pretty disturbing to see FTC members lobbying in the press in the support of a major company they should be regulating. The FTC was created to prevent interstate monopolies -- instead they are advocating the expansion of a national -- nay, multinational taxi dispatching corporation and its ability to sway local jurisdictions to change their regulations to fit its business model. That is an obvious conflict of interest and quite the opposite of the FTC's historical mission.

    I'd like to know how the FTC turned into a neoliberal bastion, and how they slipped into Uber's deep pockets.

  • FourthSpeaker

    You lost all credibility when you said "nay" .. Apart from that though, its also interesting how you can argue that the FTC's actions against the Commission's behavior is somehow being contradictory to the original purpose of the agency, since the Dc Tax Comm. is clearly attempting to use its power in the market to prevent any competitors. In this case, its recent actions in the last 2 years against Uber is even more plainly anti competitive then any would-be monopoly in a market.

    Also, the FTC is speaking out for an open and free market which would include Uber (and other services). They can also regulate the would-be members in such a market. These two actions are not mutually exclusive.

  • laughtiger

    From what I have seen the DC taxi commission has tried to include uber in the process all along, and never thought of themselves as trying to "shut uber down." That is just the spin uber has put on it, to pressure the regulations in DC to fit uber's model, which they want every city to adopt/allow. The FTC should be concerned about the emergence of dominant players in the taxi market on a national -- indeed, international (was that better?) scale. You can already see Uber trying to push some of its competitors out of new markets by offering free rides. That is not "competition" in the sense imagined by free market enthusiasts, that is somebody with millions in venture capital operating at a temporary loss to squeeze out competitors with less funding.

  • Toto

    We'll said, it is obvious for someone with basic humanity to see taxi drivers and other individuals cannot be expected to compete with multinational operators. The drive for putting out these drivers and companies whose livelihood depend on the meager income that goes a long way to support their families cannot be risked in exchange for a negligible service improvement. In addition, these new multinationals are not starting out transportation services to remote areas but encroaching on above average transportation service providers such as DC taxicab system with an average hail time of 5 minutes.

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