San Francisco-based startup Uber, developer of the Summon-a-Car application, has won a battle over draft legislation proposed by Washington D.C. that could have forced it to dramatically increase its fares.
Uber's Summon-a-Car app, available on Android or iPhone, allows users to request private car services in a number of US cities.
The D.C. Taxicab Commissionthe mobile service Uber provides as "illegal" and was considering a legislative amendment that would require sedan car services like Uber's to charge a minimum rate five times that of a standard taxi.
The aim of raising the rates was to "ensure that sedan service is a premium class of service with a substantially higher cost that does not directly compete with or undercut taxicab service," the bill said.
However, by preventing companies such as Uber from offering competitive rates, there would realistically be no viable alternative for most consumers than a standard Washington taxi.
However, according to the New York Times, D.C.'s City Council has passed a legislative amendment which legalizes sedan transport which, in turn, means Uber is able to continue trading until the amendment is revisited.
The bill will allow Uber continue to operate without regulation until the end of the year, when the legislation will need to be revisited, the New York Times added.
Uber's chief executive, Travis Kalanick, organized a social media rally in support of the company on Tuesday morning. During the demonstration, the author of the proposed change, Councilmember Mary Cheh, withdrew the amendment.
A new version of the bill was then introduced on the same day by Councilmember Jack Evans. Co-sponsored by three other council members, the updated legislation allows businesses like Uber to be exempt from regulation, and no mention of a minimum fare has been included:
For the purposes of this subsection, a business that uses a mobile phone application to connect its users to sedan service shall be exempt from regulation by the commission, including the fares charged by the business, provided that: (1) an estimated fare is available to the user when the application is used to book a sedan; (2) the method for calculating the fare structure is provided by the business to the user of the mobile application prior to booking a sedan; (3) upon completion of the trip, the customer is provided a receipt that lists the pick-up point, drop-off point, and total fare paid; (4) the business providing the mobile application uses sedans that are licensed.