DCTC Chairman Set to Propose Another New Class of "Private Vehicles for Hire" with Lax Rules Further Harming Over Regulated D.C. Taxicabs

by Sean Riley


Just four years ago D.C. regulators were calling Uber illegal and threatening to shut down the then-upstart ride-hailing app.

Fast-forward to 2016, and the D.C. Taxicab Commission, the chief regulator of the city's roughly 6,000 taxis, is trying to not only emulate Uber's all-digital convenience, but offer something better for consumers and drivers alike.

At least that is how officials describe a vague proposal now under consideration, scheduled for discussion at the commission's next public meeting on Feb. 10.

The DCTC is studying whether to create an "Xclass," described as "a new service with zero up-front application fees, expedited licensing, use of personal vehicles and low equipment costs," according to the meeting's agenda.

But before you accuse the District of trying to create its own version of UberX, Uber's discount ride-booking platform, commission chairman Ernest Chrappah says the Xclass concept is about something bigger than a single vehicle-for-hire service.

"The central component of this idea is the digital world. So in a digital world where you have digital meters, where you have digital payment systems and digital safety mechanisms, we want to be forward-looking. So when we have autonomous and semiautonomous vehicles we are prepared and we are not stuck in the old ages," said Chrappah.

The proposal appears similar to Uber's business model — use of personal vehicles and low equipment costs — but Chrappah says any new service will require drivers to undergo FBI fingerprint background checks and be subject to DCTC rules and regulations, even if some regulations are less burdensome than those placed on traditional taxi companies.

"[Xclass] is an idea to create a framework where any vehicle-for-hire will be following the set of rules applicable to them," Chrappah said. "There are different sets of rules for private vehicles-for-hire [Uber] and public vehicles-for-hire [taxicabs], and we are inviting the public to help us shape a comprehensive way that vehicles-for-hire will be regulated."

If the Xclass seems like a nebulous idea, that is because the details have to be worked out, Chrappah said. But it is part of the DCTC chairman's effort to shift from being a legacy regulator to an innovative agency.

Whatever the Xclass turns out to be, it will be the result of Uber's lasting impact on the personal transport industry, according to Matthew Mitchell, a free-market economist at George Mason University.

"The taxi companies have a legitimate beef when they say they have to deal with all these regulations, but when Uber and Lyft come in, they offer a similar service but don't have to deal with the onerous regulations," Mitchell said.

"Traditionally, taxicabs have said the only solution is to regulate Uber and Lyft up to the same onerous level," Mitchell added. "Others have said there is another way to level the playing field and that is...to deregulate taxis."