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Start-up company gets a big boost from D.C. Council

Tuesday - 7/10/2012, 4:56pm  ET

Adam Tuss, wtop.com

WASHINGTON - A rising car service company scored a big win in the District Tuesday.

The D.C. Council was scheduled to consider legislation that would have set a price floor for the innovative car service company called Uber. But after intense pushback, the measure is being shelved until the fall.

The issue is boiling over, pitting D.C.'s cab industry against a start-up company that has taken off.

Uber works by having members register and submit their credit card information. The user can then access an iPhone or Android app to locate the closest vehicle for a ride. Within minutes, Uber says a licensed, polished, black sedan will pick up the rider.

The difference is that Uber costs a bit more than traditional cab service. But the hook for the company is the predictability of getting a ride.

Councilmember Mary Cheh (Ward 3), planned to introduce a measure Tuesday that would have set the minimum fare for a Uber trip at no less than five times the drop rate of a D.C. cab, or about $15.

That price floor measure upset Uber, which says it could have hurt plans for other future low-cost services in the city.

"What it means is that ultimately as we introduce new products and services, there will be no opportunity for our products to ever get below their current prices," says Rachel Holt, General Manager for Uber, D.C.

"It just means folks in D.C. are going to lose out on the potential of us introducing lower cost products."

The current minimum cost for a trip using Uber is $15.

Cheh says the Uber legislation will now be considered as a standalone bill.

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(Copyright 2012 by WTOP. All Rights Reserved.)