2014 | News

MoCo Taxi Boss Says Uber Surge Pricing Shows More Regulation Is Needed

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Updated at 2:45 p.m. The president of Montgomery County’s largest taxicab company says reports of Uber surge pricing over the Halloween weekend prove a bill aimed at regulating the app-based car service needs to have a sharper bite.

Lee Barnes, president and CEO of North Bethesda-based Barwood Taxi, said the proposal from Councilmember Roger Berliner that would define services such as Uber and Lyft as Transportation Network Companies and impose a few new regulations on them doesn’t go far enough.

Barnes pointed to surge pricing for Uber rides around the country last Friday night, when a number of Halloween party-goers complained about Uber rides that cost as much as nine-times the typical rate.

A Baltimore woman made national news when she started an online crowdsourcing campaign to help pay off her $362.57 Uber charge from a 20-minute Halloween night trip.

The Council legislation would impose license, background check and insurance requirements, but wouldn’t limit fares or rates — except in the case of a snow emergency. Montgomery County strictly regulates the rates of the five licensed taxicab companies that operate within its borders.

“To me, it seems unconscionable — from growing up in such a consumer-oriented county — that we would let people be ripped off to that type of level,” Barnes said. “I’m a transportation network company as well. We pick people up and take them from point A to point B for profit and for hire. I don’t get why the regulations should be any different.”

Berliner said he did consider Uber surge pricing when working up the bill, which was introduced with a companion piece of legislation that would lift some requirements of traditional taxicab companies.

“What we appreciate about Uber is that everybody, all consumers who use it, are totally aware of surge pricing,” Berliner said. “Consumers make a choice. They know when surge pricing is in effect. They could call a taxi without surge pricing.”

Uber engages in surge pricing when rides are in highest demand, making a rainy Halloween night a prime candidate for the practice. After the incident with the $362.57 Baltimore ride, the company said in a statement that surge prices are “repeatedly communicated and approved before any trip is confirmed.”

Barnes also argued Montgomery County should give traditional taxicab companies the room to impose a more modest surge pricing model of their own.

On Halloween night, for instance, Barnes said Barwood did almost 500 more trips than on the previous Friday, including some trips it provided for free as part of a region-wide program to prevent drunk driving.

“To me, on a busy night like Halloween, a $10 ride might be a $15 ride,” Barnes said. “We’re talking a small increase, not a $10 ride becoming a $60 ride.”

Barnes said some more flexibility in the county’s set rates for taxicabs would provide incentive for his drivers, who would be able to service more passengers.

Berliner said he and other Council colleagues would be willing to consider flexible pricing for taxicab companies, if rides with those companies “are being sought in the same way that Uber is, with the phone app.”

Barnes pointed to a phone app Barwood already has. He said Uber-like features — such as maps that show where the vehicles are and the ability to pay with a credit card directly through the app — are in the works for a smartphone app Barwood hopes to roll out in mid-December or early January.

The back-and-forth between Barnes and Berliner is another sign of the taxi vs. Uber friction that’s sprouted up around the country and world, and in Montgomery County over the last few months.
The introduction of the bills came almost two months after Art Holmes, the director of the county’s Department of Transportation, wrote a letter to Uber CEO Travis Kalanick stating his concern that the company operates like a taxi cab company without the proper county taxi licenses.
In response, Berliner penned a letter to County Executive Isiah Leggett to share his concern that the move might work to “drive Uber out of Montgomery County and detract from our aspirations to support innovation and innovative companies.”
Barnes made his case in a letter-to-the-editor in The Gazette, claiming Uber has an unfair business advantage because it doesn’t yet have to comply by many of the same state and county taxi regulations that Barwood does. He wrote that competing against Uber is exactly like a boxing match in which one fighter “has his hands tied behind his back and the other can do whatever he wants, even hitting below the belt.”
Barwood joined with other Maryland taxi companies in July to sue Uber, claiming the app-based car service is hampering its ability to do business.

Over the last few months, Barwood’s Twitter feed has frequently included links to unflattering stories about Uber and the company has contracted the services of Montgomery County-based Chesapeake Strategies, a public relations firm that has also posted stories about Uber-related controversies.

Berliner spearheaded the new set of bill proposals as a way to create a more even playing field.

With the Dec. 2 scheduled public hearing on the Uber and taxi bills approaching, Berliner said he hasn’t got much in the way of cooperation from Barwood and other taxi companies.

“They are fighting hard,” Berliner said.

Uber spokesperson Taylor Bennett said legislation passed last week by the D.C. Council is a good example of type of regulations the company is open to.

“We continue to work productively with Montgomery County Council to craft sensible ridesharing regulations that allow for more choice and opportunity,” Bennett said. “The D.C. Council’s legislation that recently passed is a model framework for all other cities across the country considering ridesharing ordinances.”