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Gebresalassie v. District of Columbia

United States District Court, District of Columbia

March 18, 2016

ADDIS GEBRESALASSIE, et al., Plaintiffs
v.
DISTRICT OF COLUMBIA, Defendant

MEMORANDUM OPINION

COLLEEN KOLLAR-KOTELLY, United States District Judge

Plaintiffs, six individual taxicab drivers and the Washington D.C. Metro Taxi Operators Association, bring suit against the District of Columbia on behalf of themselves and on behalf of a putative class of District of Columbia taxicab drivers, claiming that the District’s Vehicle-for-Hire Innovation Amendment Act of 2014 is unconstitutional. Specifically, they claim that the statutory scheme creates a two-tiered system for regulating taxicabs and digitally dispatched transportation services, such as Uber and Lyft, and that the two-tiered system result in an Equal Protection violation and a Substantive Due Process violation. Plaintiffs also claim that, as a result of these alleged constitutional violations, the District of Columbia exceeded its authority under the District of Columbia Home Rule Act. Before the Court is Defendant’s [9] Motion to Dismiss. Defendant argues that the Complaint fails to state an Equal Protection claim or a Substantive Due Process claim under the Constitution and that it fails to state a claim under the District of Columbia Home Rule Act. Upon consideration of the pleadings, [1] the relevant legal authorities, and the record for purposes of this motion, the Court GRANTS Defendant’s [9] Motion to Dismiss. This case is dismissed in its entirety.

I. BACKGROUND

For the purposes of the motion before the Court, the Court accepts as true the well-pleaded allegations in Plaintiffs’ Complaint. The Court does “not accept as true, however, the plaintiff’s legal conclusions or inferences that are unsupported by the facts alleged.” Ralls Corp. v. Comm. on Foreign Inv. in U.S., 758 F.3d 296, 315 (D.C. Cir. 2014). The Court reserves further additional presentation of the background, as necessary, for the discussion of the legal issues below.

On November 18, 2014, then-Mayor of the District of Columbia Vincent C. Gray signed the Vehicle-for-Hire Innovation Amendment Act of 2014, which had previously been passed by the District of Columbia Council. See Vehicle-For-Hire Innovation Amendment Act of 2014, 2014 District of Columbia Laws 20-197 (Act 20-489). The Act went into effect on March 10, 2015, after Congress took no action on it. In the Act itself, its purpose was described as follows:

AN ACT to amend the District of Columbia Taxicab Commission Establishment Act of 1985 to define a private vehicle-for-hire company and operator, to clarify the authority of vehicle inspection officers to make stops, to clarify the complaint authority of the District of Columbia Taxicab Commission, to create registration provisions for operators, to require background checks for operators, to prohibit street hails by operators, to require a private vehicle-for-hire company to conduct background checks, inspect vehicles, establish zero tolerance policies against discrimination and drug and alcohol use by operators, to require transmission of 1% of all gross receipts to the Office of the Chief Financial Officer, to require insurance for operators, to create provisions for charging for services, to provide for enforcement against private vehicles-for-hire, to deregulate fares for taxicabs arranged through digital dispatch, to clarify data and surcharge transmission requirements, and to require that a notice be posted in all taxicabs regarding acceptance of credit cards; to amend section 47-2829 of the District of Columbia Official Code to exempt private vehicles-for-hire from the license requirement and to clarify eligibility for a for-hire license; and to amend Title 18 of the District of Columbia Municipal Regulations to reduce the inspection requirement for taxicabs from semiannually to annually.

2014 District of Columbia Laws 20-197 (Act 20-489). There is no dispute that the Act had the effect of both legalizing and regulating transportation services organized through “digital dispatch, ” that is through an “app” on a mobile device, such as a “smartphone, ” and provided by companies such as Uber and Lyft. There is also no dispute that the regulatory requirements applicable to digitally-dispatched “private vehicles for hire, ” as termed by the statutory scheme, differ in at least some respects from those applicable to taxicabs. The Court proceeds now to explain the statutory scheme, with particular emphasis on the distinctions that serve as the bases for Plaintiffs’ claims. Before doing so, the Court notes that, even though the Court must take Plaintiffs’ factual allegations as true, where Plaintiffs’ allegations regarding the content of the statutory scheme themselves deviate from the scheme itself, the Court relies-as it must-on the statute and regulations themselves rather than on the allegations in the Complaint.

The Vehicles-for-Hire Act amends the District’s statutory governing scheme for taxicabs and other related transportation services and creates two categories of transportation service providers: private vehicles-for-hire and public vehicles-for-hire. A p rivate vehicle-for-hire is defined as “a class of transportation service by which a network of private vehicle-for-hire operators in the District provides transportation to passengers to whom the private vehicle-for-hire operators are connected by digital dispatch.” D.C. Code § 50-301.03 (16A) (2016).[2] A public vehicle-for-hire is defined as “a class of transportation service by motor vehicle for hire in the District, including a taxicab, limousine, or sedan-class vehicle, that provides for-hire service exclusively using drivers and vehicles licensed pursuant to this subchapter and § 47-2829.” Id. § 50-301.03(17). The statute further defines the three types of vehicles that make up the class of public vehicles for hire:

(14) “Limousine” means a public vehicle-for-hire that operates exclusively through advanced registration, charges exclusively on the basis of time, and shall not accept street hails.
(20) “Sedan-class vehicle” means a public vehicle-for-hire that operates exclusively through digital dispatch, charges on the basis of time and distance, except for trips to airports, and other point-to-point trips based on well- traveled routes or event-related trips such as sporting events, which may be charged on a flat-fee basis, and shall not accept street hails.
(21) “Taxicab” means a class of public vehicle-for-hire that may be hired by dispatch, digital dispatch, or hailed on the street, and for which the fare charged is calculated by a Commission-approved meter with uniform rates determined by the Commission; provided, that a taxicab hired by a passenger through digital dispatch may use rates set by the company that operates the digital dispatch pursuant to the requirements of this subchapter.

Id. § 50-301.03(14), (20), (21). Because Plaintiffs’ claims are based on the distinctions between private vehicles-for-hire-or, as Plaintiffs call them, “De Facto Taxicab Service Providers”-and taxicab operators, the Court does not discuss further the “limousine” and “sedan-class vehicle” subcategories of public vehicles-for-hire; it includes them here only to indicate the full scope of the legislative scheme.

The statute further defines the several methods of arranging transportation by “vehicle-for-hire.” Dispatch is defined as “the traditional methods of pre-arranging vehicle-for-hire service, including through telephone or radio.” Id. § 50-301.03(8B). Digital dispatch is defined as “the hardware and software applications and networks, including mobile phone applications, which passengers and operators use to provide public and private vehicle-for-hire service.” Id. § 50-301.03(8A). In common parlance, this includes “apps” (or applications) on mobile devices, such a “smartphones.” The statute does not define but discusses “street hails, ” as well. With respect to these methods of arranging transportation, private vehicles-for-hire may be arranged only by digital dispatch; by contrast, transportation by taxicab may be arranged by (1) dispatch (the traditional version), (2) digital dispatch, and (3) street hail. Id. § 50-301.03(16A), (21). The statute sets various requirements for the several types of transportation services encompassed within it. Before turning to the individual features of the vehicle-for-hire licensing scheme that are challenged in this action, the Court notes that some of those requirements are addressed to the type of dispatch for an individual ride while others are addressed to the type of vehicle or type of operator. Compare Id. § 50-301.26(a)(3) (uniform color scheme required for all taxicabs) with id. § 50-301.03(14), (16A), (20), (21) (transportation arranged by traditional dispatch or street hail must be charged by approved metered-pricing rates). The Court briefly introduces the specific requirements challenged through Plaintiffs’ Equal Protection claim, as categorized by the parties, see Compl. ¶ 70, with further elaboration reserved for the discussion below.

1. Ride fare. For taxicab transportation arranged by traditional dispatch or by street hail, the fare is calculated pursuant to a metered-pricing scheme set by the District of Columbia Taxicab Commission. D.C. Code § 50-301.03(21) (2016). For all fares not charged according to the Taxicab Commission metering scheme, “before booking a vehicle the company shall disclose to the customer the fare calculation method, the applicable rates being charged, and the option for an estimated fare.” Id. § 50-301.31(b)(2). For a taxicab ride arranged by digital dispatch, the fare may be calculated pursuant to the Taxicab Commission metering scheme or pursuant to a “time and distance charge set by the” taxicab company. Id. § 50-301.31(b)(1). For a digitally dispatched ride by a private vehicle-for-hire-which is to say all rides by those providers-the private vehicle-for-hire operator is free to set its own pricing scheme. Id. § 50-301.29f. However, during a state of emergency declared by the Mayor of the District, the use of “surge pricing” for rides arranged by digital dispatch is limited. See id. § 50-301.31(b)(13).
2. Passenger surcharge. A “company that uses digital dispatch for private or public vehicles-for-hire other than taxicabs shall transmit to the Office of the Chief Financial Officer 1% of all gross receipts for trips that physically originate in the District.” Id. § 50-301.31(b)(11). Such money is to be paid into the Public Vehicles-for-Hire Consume Service Fund. Id. For taxicab fares arranged by street hail, traditional dispatch, or digital dispatch where the digital dispatching system does not process the payments, the taxicab operator must charge a surcharge of $0.25 per trip. D.C. Mun. Reg. tit. 31, § 801.7(c)(2)(B).[3] Such money also is dedicated to the Consumer Service Fund. D.C. Code. § 50-301.31(b)(12) (2016).
3. Insurance. Private vehicle-for-hire operators are required to carry increased coverage for periods when “the operator is engaged in a prearranged ride” and when the “operator is logged onto a private vehicle-for-hire company’s digital dispatch showing that the operator is available to pick up passengers but is not engaged in a prearranged ride.” Id. § 50-301.29c(a), (b). Taxicab operators must carry insurance coverage at all times but the required level of coverage is lower than the required coverage level for private vehicles-for-hire.[4] See Id. § 50-301.14. As an alternative, taxicab operators may satisfy this requirement through a sinking fund or surety bond. Id. § 50-301.14.
4. Vehicle color and appearance. A requirement that taxicabs conform to a uniform color and marking system is currently being phased in. Id. § 50-301.26(a)(3). Specifically, taxicabs must be painted red with a grey stripe on the side as specified in the regulations promulgated by the Taxicab Commission. D.C. Mun. Reg. tit. 31, § 503.3. By contrast, a private vehicle-for-hire is only required to “display a consistent and distinctive trade dress consisting of a logo, insignia, or emblem at all times while the operator is logged into the private vehicle-for-hire company’s digital dispatch.” D.C. Code § 50-301.29d (2016).
5. Meter system. Taxicabs are required to have meter systems that allow the taxicabs to charge the metered fares set by the Taxicab Commission, which must satisfy certain regulatory requirements. Id. §§ 50-301.26(a)(1), 50-301.03(21). Private vehicles-for-hire are not required to maintain any metering system.
6. Dome light. Taxicabs are required to have dome lights “that clearly display a taxicab’s identification number, as well as identify when a taxicab is occupied, on-call, off-duty, or available to accept a fare.” Id. § 50-301.26(a)(2). Private vehicles-for-hire are not required to include a “dome light.”
7. Credit card machine. Taxicabs are required to maintain on-board machines that can accept payment by credit card and debit cards and meet certain requirements set by statute and regulation. Id. § 50-301.26(a)(1). Private vehicles-for-hire are not required to include a credit card machine.
8. Licensure. Taxicab drivers are required to maintain a Face ID, and every vehicle used as a taxicab must have an H-tag license. See D.C. Mun. Reg., tit. 31, §§ 1000.1, 1010.30.Taxicab drivers are also required to meet certain qualifications in order to qualify for a Face Id. See generally D.C. Code § 47-2829 (2016). By contrast, a private vehicle-for-hire operator is not required to have a Face ID, and a private vehicle-for-hire is not required to have an H-tag. Compl. ¶ 63. However, a private vehicle-for-hire operator is required to maintain a valid Maryland, Virginia, or District of Columbia drivers’ license and to undergo a background check. D.C. Code. §§ 50-301.29b, 50-301.29e(a)(3) (2016). Certain categories of people, including people with specified past convictions or listings on a sex offender registry, are barred from serving as a private vehicle-for-hire operator. Id. § 50-301.29b(c).

Plaintiffs claim that these distinctions between taxicabs and private vehicles-for-hire operators constitute a violation of the Equal Protection Clause. Plaintiffs also claim that these requirements, taken together, constitute a deprivation of their property interest in their taxicab licenses and, therefore, constitute a Substantive Due Process violation. Finally, Plaintiffs claim that, as a result of those alleged constitutional violations, the District of Columbia has exceeded its authority ...


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