The Latest from TechCrunch |  |
- Lost And Found In The Paneldome: The iRiffPort
- The New Political Battleground: Your Social Network
- Things Entrepreneurs Should Avoid When Raising Capital
- SOPA Supporters On The Run
- The Seductive Danger Of Half Measures
- Liveblogging Platform CoverItLive Hacked
- A City Is A Startup: The Rise Of The Mayor-Entrepreneur
- OK, MG, I Take It Back
- The DC Taxi Commissioner’s Attacks On Uber Have Gotten Even More Ridiculous
| Lost And Found In The Paneldome: The iRiffPort Posted: 15 Jan 2012 09:50 AM PST  We get mailed a lot of stuff at TechCrunch and sometimes a good item will slip through the cracks. This iRiffPort has been sitting in my pile of gear since it came out in October. I wrote a review. Shot some photos. It was all ready to roll and then somehow it got misplaced and I forgot about it completely. Too bad, because it is a good cable. This week, I received a postcard from Kevin Robertson, head honcho at PocketLabWorks and also the creator of the iRiffPort. He asked me what I thought of his device (and the software with which it works). The iRiffPort…Oh yeah, I think I remember that I liked that thing. What happened to it? I dug through my closet, found it, plugged it in and lo and behold, I had remembered correctly—it was a solid device. So I decided to rewrite this post and do a Paneldome video demo, not because the iRiffPort is breaking news—it’s been out for 3 months—but rather because it is good. It’s a good cable and the software it works with, while not dripping with features, is solid and easy to use. Pros
Cons
To hear how a bass guitar sounds playing through the iRiffPort and PocketGK for iOS, just checkout the video below.
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| The New Political Battleground: Your Social Network Posted: 15 Jan 2012 07:03 AM PST  Editor's Note: David Binetti is the CEO and co-founder of Votizen, a consumer technology company based in Mountain View, CA focussed on giving voters a greater voice. You can follow Binetti on Twitter @dbinetti. I have a stark fact to share with the majority of registered voters in the United States: your vote is worthless. Yes, that's right—worthless. Due to the "winner take all" nature of this country's Electoral College system, if you live in California, New York, Idaho, or any other state that safely votes for one party, your vote in the Presidential election is essentially treated as a pro forma. Instead, campaigns focus their real attention (and war chests) on targeting a small number of swing states where the outcome could go either way, ignoring the vast majority of voters. Social networks, however, are changing this dynamic in new and exciting ways. We now have the ability through our friends, followers, and fans to reach the voters in particular geographic areas that campaigns find so valuable. For example, you may live in California now, but if you grew up in Florida (or Ohio, or Pennsylvania, or any of the other 2012 battleground states), you're likely to be connected to the exact people whose votes are so prized by the campaigns. As a result, we are likely to see a Presidential campaign where many citizens are valued more for their personal networks than for their actual votes. Reaching the right voters can be very expensive. Recently in the Iowa Caucuses, Republican candidates directly spent $15 million on television advertising, an average $130 per vote. (Rick Perry was particularly generous, shelling out $480 for each conversion). If you can reach a particular audience that a campaign needs to win, you're in a position of influence that will become ever more valuable as voters turn away from television as their primary source of information. In terms of raw numbers, a person with several hundred friends, fans, or followers in Florida could represent literally tens of thousands of dollars in equivalent spending to campaigns on the hunt for votes in a crucial state. Considering that more than $2 billion will be spent over the next ten months of 2012 alone primarily in these swing states, your network may represent a new, untapped marketplace; a digital battleground where the Oval Office could be won or lost. And if you don't think a small number of votes can make a difference in these places, then you obviously are too young to remember the incredible 2000 Presidential Election. We are just scratching the surface of what's possible. Just over four years ago, then-candidate Barack Obama leveraged technology to help him win the Presidency with tools like online call lists and donation processing. Today, citizens are banding together via Tumblr, integrating with tools like Twilio, and directly contacting their representatives to lobby for a Startup Visa and against SOPA, spreading their messages via Twitter hashtags with incredible speed — and getting results. Political messaging and pressures are changing fast within new media channels and will accelerate through Election Day, as citizens continue to use social media in new and innovative ways. So take heart. Your individual vote may not be worth anything in the Electoral College, but the value of your network could be immeasurable. Photo Credit: Creative Commons Flickr / George Parilla
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| Things Entrepreneurs Should Avoid When Raising Capital Posted: 15 Jan 2012 06:25 AM PST  Editor's note: Contributor Ashkan Karbasfrooshan is the founder and CEO of WatchMojo. Follow him @ashkan. Alright, in my last post I argued that bootstrapping is just as over-rated as raising venture capital. But for those who decide to pursue fundraising, here are some things entrepreneurs should avoid when raising capital. For all of the talk about how much excess capital there is, it's actually hard to raise capital because very few projects fit the VC profile—even though many VC-funded projects come across as frivolous, me-too projects. Life's unfair. To quote Mark Twain: "Don’t go around saying the world owes you a living. The world owes you nothing. It was here first." Personally, I've bootstrapped my company; initially because I didn't have to raise capital and then because I didn't play the game properly or refused to accept what came with the territory. Do VCs Really Make a Difference? In Chamath Palihapitiya's leaked email to AirBNB's Brian Chesky, he wrote:
For the record, a good VC helps through advice and introductions and the best VCs also serve as amazing therapists and coaches. Zynga's Mark Pincus blames entrepreneurs for sometimes giving VCs the power to kill your business or take it away from you. So if you are going to raise VC, here are some things you need to accept and avoid before signing on the dotted line. What You Need To Accept (it's the system) There are some seemingly unfair things about VC:
While a term sheet contains more clauses and the subsequent unanimous shareholder agreement will include drag along and piggy back rights clauses, investors do need to protect themselves so expect things to be stacked in their favor. The Drag Along allows a majority shareholder to enforce minority shareholders to be dragged along in the event of a sale whether they like it or not so that they don't waste the big shareholder's time, basically. The Piggy Back allows a minority shareholder to sell their shares at the same price offered to majority shareholders. What You Need to Avoid – Part 1 (it's them) Board composition Be careful how much power you give up early on at the board level because before you know it, you will have less than 50% of the voting shares and when the going gets rough, you will want to avoid boardroom shenanigans that may cost you your job and stake. Chairmanship This one is tricky. If you're the average technical founder, you may have no business (or interest) running a board. Even most business founders lack the experience of running a board. But the board is ultimately responsible to appoint the CEO and the Chairman runs the board, so if you can hold on to the Chairmanship, you should. It's common for VCs to appoint one of their partners to the board – as they should. It's also common sometimes for that VC to become the Chairman. But unless someone is a major investor in your company or you managed to land a big industry veteran whom you trust, they shouldn't be the Chairman, though your company will hopefully get to a point where you may step aside and make room for a new Chairman. Liquidation preference The liquidation preference determines how the pie is shared in a liquidity event (M&A, IPO). In a fair situation: investors get their money back before anyone else does, even though the risk and return tradeoff would require that everyone wins or loses together. But with leverage a VC will be able to land a 1x liquidation preference; which is standard. If they ask for anything more than that, tell them to take a hike; you'll never see a return. Vesting It's one thing for investors to back a founder based on a Powerpoint presentation or business plan – the proverbial idea on a napkin – but it's another thing for VCs to join an ongoing party. In either case, VCs tend to require founders to essentially give up their equity and earn it back (hence vesting) over a period of years. In the latter scenario, this feels like marrying a woman after years of dating her but having to earn the right to share a bed. I understand why VCs want to feel protected against departing or ineffective founders, but there's a problem when VCs can both push a founder out and require them to vest their shares and earn them back. What You Need to Avoid – Part 2 (it's you) Ok, now stop blaming others – what are you doing wrong? Raise Money When You Can, Not When You Have To One of the more popular adages is not raising money when your back is to the wall and instead raising money when you can, under better terms. As entrepreneurs, we're occasionally too optimistic and this clouds our judgment. But Don't Raise As Much As You Can Conventional wisdom suggests that you "raise as much money as you can" but that is good for investors but bad for entrepreneurs, raise a reasonable amount – don't order with your eyes. Don't be too Fearful: These are your Partners Yes, only the paranoid survive, but not all VCs are out to get you and dilute you of your holdings. Yes, some VC relationships go awry, especially if the company isn't growing fast enough and the investment is at risk, but ultimately all partnerships risk going sour. If you go into a VC relationship thinking that they're out to get you, you'll poison things. Don't be too Greedy: Strike a fair valuation Yes, greed is good, but too much greed will kill things. When an investor is considering making an investment, he is driven by greed; once he is involved with a company, fear becomes a factor. Unless you offer the investor a potential to earn an abnormal return on his investment, he'll balk and back the next entrepreneur. While raising capital is hard, what happens afterwards is much harder – make sure you stick around to enjoy the fruits of your labor. (If you enjoyed this, then you may enjoy my old rant Top 10 Mistakes VCs Make).
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| Posted: 14 Jan 2012 11:09 PM PST  Support in Washington for the SOPA anti-piracy bill in Congress (and its Senate equivalent, PIPA), is waning. After weeks of mounting uproar online, Congressional leaders started backpedaling last week and the Obama Administration weighed in on Saturday in response to online petitions to stop the bills. The White House issued a clear rejection of some of the main principles of SOPA. While the White House supports the major goal of the bills to stop international online piracy, the growing chorus of complaints about the ham-fisted way the law is going to be implemented may finally be acting a s a counterweight to all the media-company lobbying which is trying to push the bills through. In fact, the White house blog on the subject almost amounts to a pre-veto of the bills as they now stand (and which have yet to be voted on, much less approved, by either house of Congress). Specifically, the White House states:
The big problem with SOPA is in the way it is supposed to be enforced, namely by blocking domain-name system (DNS) servers of copyright-infringing websites. But DNS servers are a basic technical component of the Internet (they translate site names like techcrunch.com into numerical IP addresses computers can understand better). Once you start messing with DNS, all sorts of unintended problems arise. Blocking DNS without a full adversarial hearing in a courtroom raises the potential for censoring speech and other lawful activities. It is also the same method China uses to block “offending” content from China’s Internet. The practice also undermines new security protocols. The White House acknowledges:
Thank you. But it still is not clear how the objectives of the bills can be achieved without causing damage to the Internet. Congress should come up with a different mechanism for going after foreign pirate sites or else kill the bills entirely. SOPA supporters may be rethinking their positions, but they have not retreated entirely. Online SOPA opponents shouldn’t be doing any victory dances just yet. For more on SOPA, watch this interview I did with Union Square’s Brad Burnham:
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| The Seductive Danger Of Half Measures Posted: 14 Jan 2012 08:29 PM PST  Editor's note: Guest contributor Aaron Harris is a co-founder of Tutorspree, the marketplace for tutoring. Follow him @harris, or take a lesson from him on Tutorspree. In the wide world of startups, we mostly like to think of ourselves as go-getters, ass kickers, “in all the way” sorts. We also like to think of ourselves as iterators, tinkerers, rapid iterators who test unceasingly. But the combination of those two traits can lead to one of the most dangerous cycles in startup – half measure syndrome (HMS). Interestingly, HMS starts off as something very intelligent – the team does not want to commit to a single strategy until it can prove that that strategy will create the hockey stick. When controlled and focused, that impulse is an excellent driver of evolution, but when not properly grounded in the reality of where you are, it becomes quite dangerous. Steve Blank (arguably the inventor of the rapid iteration philosophy) did an incredible job illustrating the dangers of HMS in a post he wrote about a former student who, despite having achieved product market fit, refused to commit his full resources on the found solution – preferring to continue iterating in the belief that something bigger was hopefully around the corner. Looking at his bank account and fearing the prospect of it dwindling to zero, he became locked in a potential death spiral – continually pitching halfsies that did not go anywhere, more desperate each time, rather than committing to the seemingly proven if not 100% certain results already seen. That mental state makes a lot of sense to me. It is, to a large degree, driven by fear of failure – and not just of your idea. As we build companies, we continually create buy-in from stakeholders – be they friends, family, colleagues, investors, or admirers. That faith in our ability to succeed is, at surface, driven by the particular success of a product. To risk the failure of that product, without the potential recourse of “but we haven’t tried everything” is terrifying. At its heart, it would mean that, fundamentally, you, as a founder, fell short of a goal that others thought you were capable of achieving. HMS allows a founder to continually list things that have not been tried in total, to believe in the salvation lodged around the corner which they’ll get to before they run out of time. Paradoxically, that faith means that you will likely never uncover that secret – if it does exist (and very rarely is there a single silver bullet for any company). Committing halfway fundamentally means that you will not fully understand any piece of that halfsies strategy. It means that, should the strategy fail, you will not fully understand the reason for it. While, in some instances, that may mean you avoid a number of bad roads, it will also mean that your ability to identify the right road will be materially decreased. Then how, really, can you identify whether or not you are pursuing verifiable tests, or are simply caught by HMS? Fundamentally, I believe the answer is in how you approach testing, in the type of framework you build around it. Tests are not half measures when they are designed to prove individual pieces of an overall hypotheses (can I get to 500 tutors in NYC?). Keeping a conscious eye on what the point of a test or iteration is, not just to itself, but to your overall plan and mission (how building a certain number of tutors in a given area influences student activity and community creation, in my case, rather than just the number of tutors) removes the halfsies quality of a test. Rather than continually shifting a business strategy to reflect the results of a single test, aggregating data across a set of them, and altering your strategy accordingly creates consistent momentum for your company where the success or failure are equally useful. Within that framework, there needs to be set decision points – moments where you predetermine that, based on given sets of data, you will make a decision. This is, in truth, the most important aspect of not falling to HMS. Create whatever forcing function you need around those decision points – whether a giant whiteboard, a commitment to your cofounders or employees, or an agreement with your investors or board. At each stage, map out what your confidence interval is/will be. Know whether or not you need complete data on any single iteration to make a decision, or if the aggregate will suffice. And when that decision comes, make the hard choices necessary. Get advice on those decisions if you can, but make the decision. Don’t push it off because, now that it is here, it is scary – that’s what HMS does. Take the most objective point of view you can, and go. Because, fundamentally, your most dangerous enemy at a startup is time, not any single decision. Every minute you spend not deciding is a minute you’re not learning and not evolving. It may feel like being intelligently deliberate, but it might also be half measure syndrome. Photo credit: JK B
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| Liveblogging Platform CoverItLive Hacked Posted: 14 Jan 2012 04:56 PM PST  CoverItLive, the Demand Media-owned liveblogging platform used by many outlets to cover major events in real time, has just alerted their users of a potential data compromise. According to the alert e-mail sent to CoverItLive customers, the company noticed that “certain proprietary data files were accessed without authorization” beginning last Saturday. While they say they’re currently unsure as to what exactly was accessed (though they claim that payment details were definitely not), they urge their users to change their passwords be it they use the same (possibly exposed) password anywhere else. While they say that all user passwords are encrypted, they do not say what sort of encryption (and thus what level of security) was used.
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| A City Is A Startup: The Rise Of The Mayor-Entrepreneur Posted: 14 Jan 2012 12:00 PM PST  Editor's note: This post is authored by guest contributor Jon Bischke. Jon is a founder of RG Labs and is an advisor to several startups. You can follow Jon on Twitter here. On stage at last month’s Le Web conference Shervin Pishevar, a Managing Director at Menlo Ventures, stated “The World is a Startup.” It’s an interesting perspective, and I think what’s true for the world is also true for countries, states and municipalities. With developments like last month’s announcement that Cornell was selected to build a new tech campus in New York City, it seems to follow that if “a city is a startup,” then the best mayors are the ones who are looking at their cities in much the same way as entrepreneurs look at the companies they have founded. The ingredients for a successful startup and a successful city are remarkably similar. You need to build stuff that people want. You need to attract quality talent. You have to have enough capital to get your fledgling ideas to a point of sustainability. And you need to create a world-class culture that not only attracts the best possible people, but encourages them to stick around even when things aren’t going so great. Paul Graham has written extensively on this topic in essays like How to Be Silicon Valley and Why Startups Condense in America. Much of his thinking no doubt played into the decision to base Y Combinator entirely in Silicon Valley. Boston’s loss was the Bay Area’s gain and a striking example of why it’s important for mayors to view their cities through an entrepreneurial lens. Paul viewed Y Combinator through that lens and it led him to believe that Silicon Valley simply had more of the ingredients that would make his companies successful than Boston did. So let’s take a look at those ingredients. Making products and services people want to buy has to be at the top of the list of any forward-thinking mayor. Extensive research by the Kauffman Foundation shows that virtually all job creation comes from companies less than five years old. So if you’re running a city and want to increase the number of jobs in your city, you should be doing whatever you can to encourage more viable startups. It’s something that Ed Lee, San Francisco’s newly-inaugurated mayor seems to understand, telling TechCrunch back in November “I want them [tech companies] to start here in San Francisco, and I want them to stay and to grow.” Talent is another important factor and lies at the heart of Bloomberg’s efforts in New York City. Creating a world-class engineering campus in New York can be thought of as the municipal equivalent to Facebook’s acquisition of FriendFeed or Gowalla. By having more talented people in the city, New York is better able to compete with other cities in the same way that Facebook better competes with rivals by having more talented engineers under its roof. (What’s more, Facebook recently announced that it will open an NYC engineering office in 2012.) Of course, getting top engineers and designers to actually work for a city might prove challenging (with a notable exception to be seen in the success of the Code for America program), but mayors can have a significant impact on helping a city to attract the best and brightest. I recently spoke with Daniel Huttenlocher, the dean of the Faculty of Computing and Information Science (CIS) at Cornell University, who played an integral role in Cornell’s bid for the Roosevelt Island campus (read more about this effort in Eric Eldon’s interview with Huttenlocher). His observation that Bloomberg’s history as both a technologist and an entrepreneur helped him and others in his office to better understand the need for New York to increasingly be a hub for the best technologists on the planet. Bloomberg is to New York City as John Calipari is to Kentucky basketball, intuitively adhering to Vinod Khosla’s notion that CEOs should be spending a very high percentage of their time recruiting. Capital is another necessity for a city’s success. In some cases this might mean mayors actively courting angel investors and venture capitalists. The success of the Silicon Valley ecosystem is due, in no small part, to the availability of early-stage capital and its density of investors. Other metro areas have historically struggled to replicate this investment ecosystem but more attempts are underway. Sergio Fernández de Córdova, the founder of Fuel Outdoor and chairman of New York Entrepreneur Week, pointed me to an effort underway in the state of Connecticut to provide more funding to early-stage companies in the state. In addition, New York City announced $150 million in funding solely devoted to startups in the city as part of the tech campus announcement. While these efforts might pale in comparison to the latest billion-dollar fund raised by a Silicon Valley venture firm, they are a step in the right direction for states and municipalities trying to spur innovation. A final ingredient is culture which can loosely be translated to livability when we think about cities. This was impressed upon me recently during a meeting with Eric Garcetti, the former Los Angeles City Council President and leading contender to become the city’s next mayor. Garcetti recognizes the challenges that LA has when competing against the Bay Area to be the home base for the next great technology company. Indeed, Los Angeles has lost a number of its most promising companies to the north such as Lookout and Yammer (born out of Los Angeles-based Geni). Still, Los Angeles is one of the most desirable cities in the country to live in and the recent Silicon Beach resurgence is due in part to this. Listening to Garcetti talk about LA’s strong points reminds you of Larry and Sergei discussing why Google’s culture made it possible for them to attract so many outstanding engineers or Tony Hsieh sharing why Zappos’ quirky, fun work environment helped them retain top performers. By emphasizing LA’s strengths, Garcetti hopes to retain talented USC, UCLA and Cal Tech grads who might not be so keen on spending “Junuary” in San Francisco. As we roll into an election year, many cities are in a state of crisis. Budgets are a mess and job growth has been minimal for a good swath of the country. Cities in need don’t just need strong leadership, they require transformational leadership. It’s no easy feat but it’s likely that the more that mayors view their cities through an entrepreneurial lens, the better they will be able to adapt to a rapidly-changing world. Bloomberg seems to be leading this charge with his efforts in New York City and mayor’s offices around the country are taking notice. Others like Ed Lee, Garcetti and Newark mayor Cory Booker appear to be taking a similar tone in their respective cities. Perhaps these are the first examples in what will become a long line of mayor-entrepreneurs. Excerpt image by Greg Knapp via Creative Commons
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| Posted: 14 Jan 2012 11:11 AM PST  A few weeks ago, I wrote: A couple weeks ago, MG wrote: “Android development itself remains a huge pain in the ass. I hear this again, and again, and again.” Which took me a bit aback. I've developed numerous Android and iOS apps (though not games, so I can't speak to the differences there) over the last few years, and neither set of developer tools seems to me to be hugely superior: both have their strengths and their really irritating failings. Oh, the irony. Up until recently all the Android apps I’d worked on had had fairly vanilla graphics requirements. But over the last few weeks, for my karmic sins, I’ve been in crunch mode developing an Android app with moderately elaborate graphics — and. Well. I stand by what I said, to a point: the developer tools for the two platforms are comparable. But Android’s fragmentation has become a giant millstone for Android app development, leaving it worryingly behind its iOS equivalent. It’s not the panoply of screen sizes and formats; the Android layout engine is actually quite good at minimizing that annoyance. It’s not the frequent instances of completely different visual behavior on two phones running exactly the same version of Android; again, annoying, but relatively minor. Device fragmentation is just an irritation. OS fragmentation, though, is an utter disaster. Ice Cream Sandwich is by all accounts very nice; but what good does that do app developers, when according to Google’s own stats, 30% of all Android devices are still running an OS that is 20 months old? I sure would have liked to stop caring about Android 2.2 bugs fixed in 2.3. It would have been awfully nice to be able to use the animation libraries from Android 3.0, described in this almost-a-year-old blog post, to say nothing of Ice Cream Sandwich’s features; but at this rate, Android developers aiming for a mass audience will have to wait another year, if not longer, before they can actually build apps that take advantage of all the shiny new featuers. More than two-thirds of iOS users had upgraded to iOS 5 a mere three months after its release. Anyone out there think that Ice Cream Sandwich will crack the 20% mark on Google’s platform pie chart by March? How about 10%? Anyone? Anyone? Bueller? OS fragmentation is the single greatest problem Android faces, and it’s only going to get worse. Android’s massive success over the last year mean that there are now tens if not hundreds of millions of users whose handset manufacturers and carriers may or may not allow them to upgrade their OS someday; and the larger that number grows, the more loath app developers will become to turn their back on them. That unwillingness to use new features means Android apps will fall further and further behind their iOS equivalents, unless Google manages – via carrot stick, or both – to coerce Android carriers and manufacturers to prioritize OS upgrades. Thus far Google’s attempts to do so have been an ignominious failure. Well, “fail fast” has always been their motto, but I sure hope they get it right the next time. Me, every other Android app developer … and every other Android user. The latter group isn’t missing out on anything huge, yet; iOS isn’t that far ahead. But if Google can’t solve the problem, and OS fragmentation remains an ever-growing millstone on Android’s back, then iOS — and maybe even Windows Phone — will nimbly scamper ever further forward, while Android can only limp and trudge. Image credit: Laura Billings, Flickr.
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| The DC Taxi Commissioner’s Attacks On Uber Have Gotten Even More Ridiculous Posted: 14 Jan 2012 10:54 AM PST  Private car service Uber entered Washington, DC a month ago and has loaded up lots of local support. But now it has hit a regulatory traffic jam. Taxi Commissioner Ron Linton personally led a sting yesterday to bust one of its drivers for trying to transport him within the district, following up on his declaration earlier this week that Uber is “illegal.” Whether or not Uber is actually breaking any rules is still unclear. He hasn’t told the company anything directly, and he hasn’t responded to its requests for more information. He’s just talking to the media about the issue. That includes inviting The Washington Post and local blog DCist to personally witness his sting outside the Mayflower Hotel. The sting involved Linton personally using Uber’s mobile application to order a sedan (from his DC office, apparently). It arrived as scheduled, and took him to the Mayflower Hotel. Then, Linton’s Taxi Commissioner officers surrounded the car, handed the driver a variety of fines, and impounded the driver’s vehicle. “We did it,” Linton told a local ABC station later that day, “to send a message to drivers who are signing up with Uber that we are going to enforce our laws.” Before I get into what the laws are or maybe aren’t, here’s sinister-looking meta angle to keep in mind, that I discovered when I wrote about the story earlier this week. Linton is an appointee of Mayor Vincent Gray, who gained office in part through the support of the taxi lobby — which, speaking of the law, broke it to give him donations. Seems like there could be a conflict of interest here. Well, at least Uber has to follow the law. So what is it? Linton, who doesn’t normally lead stings in person, told a local NBC outlet yesterday that “the primary issue is that they are trying to operate as a limousine company, using taxi rules, and it can’t be done.” Limos in DC decide on rates with passengers before the start of the trip, whereas the taxis charge based on distance (and a few other fees), based on Commission-set rates — at least according to him. So Uber would need to install meters like taxis in order to operate within district limits, or else change from its GPS-derived mileage charge to one-off negotiations with passengers? Hold on, chapter 12.99 of the DC taxi regulations includes a section that defines sedans differently than regular limos: Sedan – a for-hire vehicle designed to carry fewer than six (6) passengers, excluding the driver, which charges for service on the basis of time and mileage (effective May 1, 2008). This line specifically says that sedans are able to charge taxi-style for their services, and indeed many of the non-Uber ones in operation already do this. How is Uber breaking the law in the way that Linton is describing above? Oh, and also, contrary to what you might think from Linton’s description, Uber doesn’t actually employee the drivers, it partners with existing, licensed drivers and companies. The other part of Linton’s beef could be more of an issue for Uber. Some of its drivers are based in neighboring communities in Maryland and Virginia. While they can pick up passengers in the district, according to the existing regulations, they have to drop them off back in the state they came from. That was part of Linton’s sting: he ordered a Virginia-based driver to pick him up and drop him off within DC. Given all these regulations, what had Uber done to try to make sure it was following them before it entered the market? It approached the taxi commission and spoke with lower level representatives, Uber DC head Rachel Holt told me earlier this week, and had launched believing that it was in the clear. But the company is speaking up more and more strongly as Linton has increased his attacks. “It’s out of turn for a city official to call an entity out for violating the law,” chief executive Travis Kalanick told me yesterday, “without some sort of notice or specification of which law that entity is breaking.” The bigger picture here is that it is the Taxi Commission’s stated mission to provide a structure for the best transportation options possible for anyone in DC. They don’t purely exist to enforce What The Law Says Today. In fact, looking at its mission statement, you’d think that Linton would be going out of his way to help Uber operate (bolding mine): The mission of the DC Taxicab Commission is to provide the citizens of the District of Columbia and its visitors a safe, comfortable, efficient and affordable taxicab experience in well-equipped vehicles operated by highly qualified individuals who have knowledge of the District’s streets, boundaries, history and tourist destinations, as well as the basic tenets of high quality customer service. At the same time, the Commission strives to provide taxicab owners and operators with a system of rules and regulations that are fair and transparent and that allow for technological advancements to be introduced to the industry and for properly qualified individuals to participate in the industry. The most grating part about the situation is that Linton and his commission, beyond failing to explain which rules are being broken by Uber, has the mission of making companies like it successful in DC through creating and changing existing regulations. Like I mentioned before, the whole thing looks exactly like cronyism. DC, which Congress has perenially denied from having any federal representation, has been left to figure things out on its own. The result has been a particularly unique pile-up of rules, and a particularly nice place for inside interests to develop their own little self-serving setups free of much oversight (as former mayor Adrian Fenty and his team recently learned the hard way when they tried to overhaul various parts of the city government). Linton’s approach, which may have been business as usual to him considering his long experience on the local scene, is also looking more ironic by the day when you consider that Mayor Gray has been trying to tout himself as a pro-technology leader who supports the local startup scene. The situation is at least headed towards some more clarity. Linton said last night that he’s turning the matter over to the city attorney general. [Top photo of the sting via DCist. Linton is on the far right.]
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