Reprinted from: http://dcist.com/2012/06/uber_might_not_be_a.php
Uber might not be a front-burner issue for the D.C. Taxicab Commission these days, but it was never unclear what irked the commission and Chairman Ron Linton about the luxury sedan service’s business model. By charging a fare based on time and distance for limousine services, Linton charged, Uber was operating outside his agency’s regulations.
Doug Anderson, the chief product officer of Limos.com, says his company is set up to avoid a similar hassle when it enters the D.C. market later this year. In an interview last week, Anderson said that rather than mimic Uber’s model in which customers pay a base fare plus charges for each mile and minute traveled, Limos.com provides the price up front.
On the surface, that would appear to satisfy the difference between taxicabs and limousines Linton described in January when he was going after Uber: “One is a time and metered distance, that’s a taxicab. The other is a fixed rate by appointment, and that’s a limo.”
Anderson says his company negotiates rates in bulk with limousine and sedan companies. Unlike Uber, which concentrates exclusively on large metropolitan areas, Limos.com and its iOS and Android applications can book an upscale livery service just about anywhere in the world with some 10,000 vehicles in its directory. But market-specific operations are coming soon, and that’s where the D.C. Taxicab Commission comes in.
Last Friday, Anderson met with Linton to discuss his business model. Yesterday, Linton told TBD the conversation was “open and very frank” and that the Limos.com approach is “intriguing.” Anderson also met last week with Acting D.C. Council Chairwoman Mary Cheh, whose Committee on the Environment, Public Works and Transportation oversees the DCTC.
In a phone interview with DCist today, Linton said “there’s a lot to study” about Limos.com’s approach and that Anderson agreed to pass along more information. But it sounds promising. “It has some twists to it that are a little different,” Linton says. “I don’t know anything that prohibits it. We’re going to study it very carefully.”
There are a few steps Limos.com needs to navigate in order to catch up with Uber in capturing the market for on-demand, high-end livery services.
Currently, Limos.com specializes in corporate travel, something Anderson, a Fairfax native, first pursued as a founder of Hotwire.com, where he managed the online travel booker’s hotel and vacation package business. Limos.com, he says, is “less focused on the ‘it’ crowd” than Uber, which advertises itself as trendy, clubby and very focused on social media.
But that “it” crowd is the next target, and that requires city-specific focuses. Limos.com plans to roll out this new product in D.C. and San Francisco in August, with entries into New York, Chicago, Los Angeles, Boston and other major U.S. cities in the pipeline. In fact, Limos.com’s map, once it’s rolled out, won’t be too dissimilar from Uber’s.
Still, Anderson says, his company’s success as a transportation option for urban professionals with disposable income, will all come down to the price tag—both how much it costs and how it is calculated, hence the focus on negotiated rates.
“Our secret sauce is on the pricing side,” he says. “It’s the most daunting part of the prospect. What we haven’t figured out is changing the rate book.”
And it looks like that might still take some calculation. A recent search on Limos.com for a Lincoln Towncar ride from Columbia Heights to Reagan Washington National Airport returned fares beginning at $45. A point-to-point ride from Columbia Heights to the U.S. Capitol began at $80.
The service Limos.com plans to introduce will focus on those point-to-point rides, just as Uber does. The prices returned by Limos.com’s search engine suggest the company is still hoping to make those changes to the rate books, but whatever they end up being once the D.C.-specific service launches, they will be presented up-front. “We think time and a meter is not the way to do it,” Anderson says.
For Anderson, car services are “about reducing anxiety.” Limousines and sedans are upscale and financially restricted, but like Uber, Anderson sees an opening to compete with the District’s fleet of 6,500 taxicabs. In fact, he predicts more entries into the same market in the next year.
One thing Anderson definitely credits Uber for is setting an example of how not to enter a market. Besides Uber’s troubles in D.C., it’s also something of an outlaw in its home base of San Francisco, where local taxi regulators raised complaints similar to Linton’s. Anderson says he’s being careful about playing by the rules.
“Governments are like glaciers,” he says. “They don’t move quickly, but when they do, they come down hard.”
Uber, Linton says, is “cutting both ends of the cloth” by charging variable rates that are not disclosed to passengers until after a ride is complete. Even though his office has had little interaction with Uber since a meeting not long after DCTC’s “sting” operation in January, Linton says Uber “continues to operate at its own peril.”
Reprinted from: http://dcist.com/2012/06/uber_might_not_be_a.php