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.