FTC Staff Comments Before the District of Columbia Taxicab Commission Concerning Proposed Rulemakings on Passenger Motor Vehicle Transportation Services

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Office of Policy Planning
Bureau of Competition
Bureau of Consumer Protection
Bureau of Economics
June 7, 2013
Mr. Jacques P. Lerner
General Counsel
District of Columbia Taxicab Commission
2041 Martin Luther King, Jr., Ave., S.E.
Suite 204
Washington, D.C. 20020
Re: Second Proposed Rulemakings Regarding Chapters 12, 14, and 16 of Title 31
Dear Mr. Lerner:
The staffs of the Federal Trade Commission’s Office of Policy Planning, Bureau
of Competition, Bureau of Consumer Protection, and Bureau of Economics appreciate
this opportunity to provide comments to the District of Columbia Taxicab Commission
(“DCTC”) on three notices of second proposed rulemakings regarding Chapters 12, 14,
and 16 of Title 31 of the D.C. Municipal Regulations, concerning taxicabs and public
vehicles for hire.1 These proposed rules follow enactment of the “Taxicab Service
Improvement Amendment Act of 2012” and the “Public Vehicle-for-Hire Innovation
Amendment Act of 2012,” which appear intended to modernize Washington, D.C.’s
regulatory framework for passenger motor vehicle transportation services.
Staff appreciates that these legislative updates to the framework appear designed
to facilitate new forms of competition that are likely to benefit consumers, especially by
providing for the legal recognition of new software applications (“applications”) to
arrange and pay for passenger motor vehicle transportation services. We are concerned,
however, that certain of the proposed rules may unnecessarily impede competition in
these services. 	We also comment on certain proposed rules that address disclosure and
data security issues that applications may raise.
I. 	Interest and Experience of the Federal Trade Commission
The FTC is an independent federal agency that enforces laws prohibiting unfair
methods of competition and unfair and deceptive acts or practices in or affecting
commerce.2 The Commission has wide-ranging responsibilities concerning nearly all
segments of the economy. 	Pursuant to this responsibility, the Commission seeks to
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580

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identify business practices and regulations that impede competition without offering
countervailing 	benefits 	to 	consumers, 	and 	advocates 	for 	policies 	that 	promote
competition and consumer protection.3
Competition 	and 	consumer 	protection 	naturally 	complement 	and 	mutually
reinforce each other, to the benefit of consumers. 	Consumers benefit from market
competition, which creates incentives for producers to be innovative and responsive to
consumer preferences with respect to price, quality, and other product and service
characteristics. 	As the U.S. Supreme Court has recognized, the benefits of competition
go beyond lower prices: “The assumption that competition is the best method of
allocating resources in a free market recognizes that all elements of a bargain - quality,
service, safety, and durability - and not just the immediate cost, are favorably affected by
the free opportunity to select among alternative offers.”4 At the same time, consumer
protections promote informed consumer decision-making by prohibiting firms from
engaging in unfair and deceptive acts or practices, by requiring sellers to make truthful
and non-deceptive representations about their offerings, and by protecting consumers’
privacy.
In carrying out its mission, the Commission has developed considerable expertise
in analyzing issues relating to passenger vehicle transportation services. 	FTC staff
previously has submitted a number of advocacy filings related to taxicabs with various
local and state authorities, including recent comments regarding the regulation of new
applications for obtaining passenger vehicle transportation services in Anchorage, Alaska
and Colorado.5 In addition, the FTC has brought enforcement actions against two cities
relating to taxicab regulation,6 and has issued two significant reports on taxi regulation.7
The Commission also has expertise in various aspects of competition and
consumer protection that are relevant to new passenger motor vehicle transportation
applications. 	The Commission has developed considerable expertise relating to the
emergence of new technologies and innovation as a form of competition.8 The FTC also
has extensive consumer protection expertise in the advertising and marketing of products
and services, including deception and disclosure issues.9 Staff has recently updated
guidance on how to make effective disclosures in the online context.10 The Commission
has also developed consumer protection expertise in data security, privacy, and identity
theft issues that applications may raise.11
II. 	The Passenger Vehicle Transportation Marketplace
Until 	recently, 	the 	marketplace 	for 	commercial 	passenger 	motor 	vehicle
transportation services in the United States had remained largely unchanged since at least
the early 1980s.12 However, primarily in response to the introduction of smartphones
around 2007, both incumbent passenger motor vehicle transportation service providers
and other entrepreneurs have introduced new software applications, sometimes also
called 	digital 	dispatch 	services, 	which 	allow 	consumers 	to 	arrange 	and 	pay 	for
commercial passenger motor vehicle transportation services in a variety of ways.13 These

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software 	applications 	may make 	use 	of 	technologies 	such 	as 	mobile 	smartphone
applications, Internet web pages, email messages, and text messages.
These software applications are an innovative form of competition that may
enable consumers to more easily arrange and pay for commercial passenger motor
vehicle transportation services, as compared to traditional methods such as street hails or
prearrangement by telephone through traditional service dispatchers.14 For example,
some applications use the Global Positioning System (“GPS”) technology incorporated
into smartphones to enable consumers to locate nearby vehicles and track their arrival on
an electronic map, thus facilitating matching between customers and service.15 Some
applications also utilize the GPS and computing capabilities of smartphones to enable
new fare calculation methods based on one or more factors, such as distance, time, per
trip fees, demand, additional services, or gratuities, which the application can then charge
to a credit card.16 Such applications may also use third-party credit card processing and
electronic receipts, in lieu of traditional payment methods and paper receipts.17
These technologies and methods may be more responsive to consumer demand,
may promote a more efficient allocation of resources (e.g., vehicles and drivers) to
consumers, may expand demand for passenger vehicle transportation services, and may
reduce consumers’ transaction costs in paying for such services. At the very least, these
technologies and methods provide new alternatives for consumers. 	They may also raise
novel consumer protection issues, for example, relating to consumers’ understanding of
information communicated via an application regarding fares, safety and liability, and
other terms of use, and the privacy and security of information collected.
III. 	A 	Regulatory 	Framework 	Should 	be 	Responsive 	to 	New 	Methods 	of
Competition, 	While 	Maintaining 	Appropriate, 	Reasonably 	Tailored
Consumer Protections
A forward-looking regulatory framework should allow new and innovative forms
of competition to enter the marketplace unless regulation is necessary to achieve some
countervailing pro-competitive or other benefit, such as protecting the public from
significant harm. 	Consumers benefit from competition between traditional and new
products and services, and from new methods of delivering services. 	Regulations
therefore need to be reviewed and revised periodically to facilitate and encourage the
emergence of new forms of competition.
In the case of passenger motor vehicle transportation services, competition takes
place on a variety of dimensions, including price, availability, timeliness, convenience,
quality, vehicle type, payment mechanism, and other amenities. A regulatory framework
should enable these various kinds of competition and not directly or indirectly restrict the
introduction or use of new types of applications, or the novel features they may provide,
absent some significant evidence of public harm. Regulation of passenger motor vehicle
transportation services should focus primarily on ensuring qualified drivers, safe and
clean vehicles, sufficient liability insurance, transparency of fare information, and
compliance with other applicable laws. 	Regulation of new computer and phone-based

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applications, therefore, should focus primarily on ensuring the safety of customers and
drivers, deterring deceptive practices relating to fares, safety and liability, and other terms
of use, and addressing other consumer protection issues, especially privacy, data security,
and the prevention of identity theft. Regulation should not in purpose or effect favor one
group of competitors over another.
As discussed in further detail below in regard to the revised proposed rules, staff
respectfully suggests that DCTC carefully consider the potential direct and indirect
impact of its proposed regulations on competition. 	We believe that unwarranted
restrictions on competition should be avoided, and any restrictions on competition that
are implemented should be no broader than necessary to address legitimate subjects of
regulation, such as safety and consumer protection, and narrowly crafted to minimize any
potential anticompetitive impact.
IV. 	The Proposed Rules and Enabling Legislation
DCTC has issued three notices of second proposed rulemakings regarding Title
31 of the D.C. Municipal Regulations, concerning taxicabs and other public vehicles for
hire. 	The proposed rules would amend Chapter 12 to establish requirements for luxury
class services, composed of limousines and sedans, establish substantive rules governing
sedans in a new Chapter 14, and establish substantive rules governing traditional and
digital dispatch services in a new Chapter 16.
These proposed rules follow enactment of the “Taxicab Service Improvement
Amendment Act of 2012” and the “Public Vehicle-for-Hire Innovation Amendment Act
of 2012.”18 The Public Vehicle-for-Hire Innovation Amendment Act of 2012 provides
for legal recognition of applications in Washington, D.C. 	It defines “digital dispatch
service” as “a business that provides a service that connects a passenger to a public
vehicle-for-hire through advanced reservation, including by computer, mobile phone
application, text, email, or web-based reservations, or by other means as the Commission
may define by rule.”19 Under the Act, “A digital dispatch service shall be exempt from
regulation by the Commission, other than rules and regulations that are necessary for the
safety of customers and drivers or consumer protection.”20 Further, “Any rules and
regulations shall protect personal privacy rights of customers and drivers, shall not result
in the disclosure of confidential business information, and shall allow providers to limit
the geographic location of trip data to individual census tracts” subject to certain
conditions.21 These bills also require that a “sedan-class vehicle” operate “exclusively
through digital dispatch” and charge on the basis of time and distance, except for certain
well-traveled routes, like trips to airports, or event-related trips, which may be charged
using flat fees.22

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A. Proposed Rules That Raise Potential Competition Issues
1. 	Proposed 1299.1
Proposed 1299.1 would define a “Luxury class vehicle” as a limousine or sedan
that meets specific requirements. Among other things, a luxury class vehicle must: be an
Environmental Protection Agency-designated Large Car, Mid-size Car, Passenger Van,
or Sport Utility Vehicle; have three or more passenger doors; carry four to eight
passengers; and have manufacturer-installed luxury features, such as a premium sound
system, reading lights, aluminum wheels, and noise-dampening materials. 	Proposed
1299.1’s definition of a “Sedan” would further require, among other things, that sedan
vehicles: not be an EPA-designated Passenger Van; not be stretched; have a curb weight
of at least 3,200 pounds; and be black or blue-black in color.
Staff 	recommends 	that 	DCTC 	consider 	the 	extent 	to 	which 	the 	above
requirements may impede competition, or are necessary to ensure safety or some other
important consumer benefit. Proposed 1299.1 facially restricts the types of vehicles that
can be operated as limousines or sedans, which may be an important consideration for
some consumers and a valuable component of competition. 	For example, the 3,200
pound weight requirement for sedans might exclude certain lighter-weight, more fuel
efficient, and more environmentally friendly vehicles from being used for sedan services,
including lighter-weight alternative fuel vehicles, that are currently available or that may
become more widely available and popular in the future. 	The use of fuel efficient
vehicles may be an important component of consumer demand for sedan services and the
proposed rule would impede sedan operators from competing with regard to this feature.
In addition, there is no evident rationale for requiring that sedans be either black or blue-
black, particularly as this limitation is not applied to other vehicle classes like limousines.
Such a provision could restrict the use of available vehicles as sedans, and, thereby, also
restrict the use of available vehicles that can be arranged through applications. It would
also restrict the ways that sedan services might compete using distinctive branding based
on 	color. 	Finally, 	we 	note 	that 	vehicle 	requirements 	should 	also 	be 	clear 	and
understandable, and the requirements for luxury features are not precise, are subject to
interpretation, and therefore could create uncertainty as to whether certain vehicles would
comply 	with 	this 	provision. 	This 	uncertainty 	alone 	might 	inhibit 	competition
unnecessarily.
2. 	Proposed 1605.6
Proposed 1605.6 would prohibit a digital dispatch service from associating with a
taxicab operator in a branded taxicab fleet or association unless the fleet or association
agrees to permit the association, provided that the fleet or association currently provides
dispatch services for its own vehicles or has filed or received registration to operate a
digital dispatch service for its own vehicles.
Staff recommends that DCTC allow for flexibility and experimentation in the
ways that applications can affiliate with all types of passenger transportation vehicle

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operators and organizations. We note that this restriction does not appear to be related to
any evident concern with safety or consumer protection and that its rationale is not
obvious, especially given that it would apply only to taxicab operators and not to other
types of vehicle operators, like sedans. Moreover, this provision might have the effect of
promoting the standardization of restrictive fleet and association policies regarding the
affiliation of vehicle operators with applications, which would decrease the incentives
and abilities of fleets and associations to compete with one another for operators by
offering more flexible policies to operators. 	Absent evidence of some particular harm,
staff recommends against restricting the ways that applications and operators can
associate with each other, which harms the public by limiting the ways that they can
obtain taxi service.
3. 	Proposed 1604.4
Proposed 1604.4 would prohibit a digital dispatch service from making a
“substantial change” to its dispatch or payment solution for taxicabs or digital payment
system for sedans, without DCTC’s written approval during the twenty-four month
period for which its certificate of operating authority is effective.23
Staff 	recommends 	that 	DCTC 	consider 	whether 	this 	provision 	would
unnecessarily burden, and thereby restrict, the ability of digital dispatch services to
update their software in a regular, timely manner, and whether there are other less
burdensome alternatives. 	By their nature, applications are very likely to seek to update
and upgrade their software on a periodic or sometimes more frequent basis, as, for
example, 	by adding 	additional 	features 	and 	services, 	improving 	data 	security, 	or
otherwise improving the software. 	If substantial software updates warrant regulatory
review, DCTC should adopt a flexible, streamlined framework to avoid unnecessarily
inhibiting the prompt deployment of innovative features that consumers might benefit
from or demand.
We also note that the term “substantial change” is undefined, and may create
uncertainty as to whether certain updates require written approval. 	For example, it is
unclear whether an application that wants to provide additional features to its customers
would be considered to be introducing a “substantial change” to its service, and therefore,
subject to compliance with this provision. 	A framework for introducing and updating
digital dispatch services should be clear and understandable to avoid inhibiting and
raising the cost of innovation.
4. 	Proposed 1404.3
Proposed 1404.3 would require a digital dispatch service, using data from each
digital payment system unit, to transmit several pieces of detailed trip information to
DCTC every twenty-four hours via a single data feed consistent in structure across all
digital payment systems.24

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Staff recommends that DCTC consider the extent to which these requirements are
necessary 	to 	ensure 	safety 	or 	protect 	consumers, 	or 	may 	unnecessarily 	impede
competition. 	In 	particular, 	staff 	recommends 	that 	DCTC 	consider 	the 	technical
implications of this provision. 	Any data collection requirements should be carefully
tailored to avoid inadvertently creating technical barriers to entry that may inhibit
competitive entry and operation by applications. Requiring applications to transmit such
detailed trip data to a third party, such as DCTC, also may raise data security issues, as
further discussed below.25 Before implementing this provision, DCTC should consider
the totality of the circumstances relating to the prospective transmission of such
information. 	In addition to considering possible benefits from collecting such data,
DCTC should also carefully consider the types of information involved, the associated
risks and vulnerabilities of collecting, handling, and storing such information, and the
monetary and other compliance costs. DCTC also should consider whether there are less
burdensome means of achieving the same ends.
If DCTC does collect detailed trip information, staff further cautions against
publicly disclosing or otherwise sharing it among competitors involved in facilitating or
supplying passenger vehicle transportation services, including digital dispatch services,
vehicle operators, and vehicle fleets or associations. 	If shared, this sort of data might
facilitate tacit or explicit collusion among competitors. 	Such collusion would harm
consumers through, for example, higher prices, decreased output, decreased quality, or
reduced innovation.26 Any detailed trip information that DCTC collects, therefore,
should be treated as confidential business information.
B. Proposed Rules That Raise Potential Consumer Protection Issues
1. 	Proposed 1402.1 and 1404.2(b)
Proposed 1402.1 would require that passenger rates and charges for sedan service
arranged through a digital dispatch service comply with certain disclosure requirements
and not exceed an estimated fare by more than twenty percent or twenty-five dollars,
whichever is less, unless due to factors beyond operator control.27 Proposed 1404.2(b)
would require each digital payment system unit used with a digital dispatch service to
provide passengers a written or electronic receipt containing certain fare information,
other trip information, and information about the service.28
Truthful and non-deceptive information about passenger vehicle transportation
services 	is 	necessary 	for 	the 	marketplace 	to 	function 	efficiently 	and 	effectively.
Requiring certain advance disclosures or the provision of certain information in a receipt
may be efficient ways to promote pricing transparency and protect consumers from
misleading “drip pricing” practices, and to help avoid or resolve other instances of
significant 	consumer 	confusion.29 Any 	such 	requirements, 	however, 	should 	be
reasonably 	tailored 	to 	avoid 	unnecessarily 	inhibiting 	the 	entry 	and 	operation 	of
applications.

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Staff appreciates that these proposed requirements appear designed to promote the
dissemination of truthful and non-deceptive information to consumers. 	Staff takes no
position 	on 	these 	particular 	requirements, 	but 	recommends 	that 	DCTC 	consider
evaluating the effectiveness of the proposed requirements before implementation and
monitoring 	their 	effectiveness, 	such 	as 	through 	conducting 	surveys 	or 	evaluating
consumer complaints, to ensure that disclosures are made in a clear and conspicuous
manner and the requirements are otherwise achieving the underlying consumer protection
objectives. DCTC may also wish to consider the principles and examples for mobile and
other online advertising disclosures provided in FTC staff’s recently updated guidance
document, .com Disclosures: How to Make Effective Disclosures in Digital Advertising.30
Among other things, it emphasizes that advertisers should ensure that disclosures are
clear and conspicuous on all devices and platforms consumers may use.
2. 	Proposed 1603.17 and 1603.6(d)
Proposed 1603.17 would require a dispatch service, traditional or digital, to store
its business records in compliance with industry best practices and all applicable laws.
The latter requirement would seem to include compliance with the FTC Act.31
In contemplating the collection, handling, and use of customer data, such as
personal information, trip information, and credit card information by applications,
DCTC may wish to consider the flexible approach that the FTC has taken regarding data
security in its consumer protection law enforcement actions, consumer and business
education, and policy activities relating to data security. 	The FTC’s approach requires
that businesses implement security practices that are reasonable and appropriate in light
of the types of information they collect and the risks and vulnerabilities they face, and
also takes into account the costs associated with implementation of these practices.32 The
FTC has brought law enforcement actions against a variety of commercial entities, such
as retailers, data brokers, and social networking web sites, which have failed to
implement reasonable and appropriate security measures to protect consumer data. 	In
these cases, the FTC has required businesses to establish, implement, and maintain a data
security program.33
Proposed 1603.6(d) would further require each digital dispatch service that
processes digital payments to meet certain standards of the Open Web Application
Security Project, PCI Security Standards Council for payment card data security, and the
National Automated Clearing House Association for direct debit transactions.
Staff appreciates that these proposed requirements appear intended to address data
security issues that may arise relating to payment processing. Staff takes no position on
these particular standards, but emphasizes that the collection, use, and retention of
consumer 	information, 	such 	as 	payment 	information, 	should 	be 	reasonable 	and
appropriate for the totality of the circumstances at issue.

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3. 	Proposed 1603.15
Proposed 1603.15 would prohibit dispatch services, both traditional and digital,
from releasing information that would result in a violation of the personal privacy of the
passenger or person requesting service or threaten passenger or operator safety, or permit
a person not authorized by the dispatch service to access real-time information about the
location, apparent gender, or number of passengers awaiting pick up. 	However, the
provision does not elaborate on these prohibitions, their enforcement, or possible
remedies.
As suggested above, DCTC may wish to consider the FTC’s approach to data
security. 	In particular, DCTC may wish to consider the remedy and monitoring
provisions that the FTC has secured in settlement orders, as means to addressing any
security breaches that occur.34
V. 	Conclusion
FTC staff appreciates this opportunity to provide views in regard to this matter
and would be happy to address any questions you may have regarding competition and
consumer protection policy in the passenger motor vehicle transportation marketplace.

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Respectfully submitted,
Andrew I. Gavil, Director
Office of Policy Planning
Richard A. Feinstein, Director
Bureau of Competition
Charles A. Harwood, Acting Director
Bureau of Consumer Protection
Howard Shelanski, Director
Bureau of Economics

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1 	This staff letter expresses the views of the Federal Trade Commission’s Office of Policy
Planning, Bureau of Competition, Bureau of Consumer Protection, and Bureau of Economics.
The letter does not necessarily represent the views of the Federal Trade Commission (“FTC” or
“Commission”) or of any individual Commissioner. 	The Commission has, however, voted to
authorize staff to submit these comments.
2 Federal Trade Commission Act, 15 U.S.C. § 45.
3 Specific statutory authority for the FTC’s competition advocacy program is found in
Sections 6(a) and (f) of the FTC Act, under which Congress authorized the FTC “[t]o gather and
compile information concerning, and to investigate from time to time the organization, business,
conduct, practices, and management of any person, partnership, or corporation engaged in or
whose business affects commerce,” and “[t]o make public from time to time such portions of the
information obtained by it hereunder as are in the public interest . . . .” 15 U.S.C. § 46(a), (f).
4 Nat’l Soc’y of Prof’l Eng’rs v. United States, 435 U.S. 679, 695 (1978); accord FTC v.
Superior Court Trial Lawyers Ass’n, 493 U.S. 411, 423 (1990).
5 FTC Staff Comments to the Honorable Debbie Ossiander Concerning AO NO. 2013-36
Regarding the Regulatory Framework for the Licensing and Permitting of Taxicabs, Limousines,
and 	Other 	Vehicles 	for 	Hire 	in 	Anchorage, 	Alaska 	(Apr. 	19, 	2013), 	available 	at
http://www.ftc.gov/os/2013/04/130426anchoragecomment.pdf; FTC Staff Comments Before the
Colorado Public Utilities Commission In The Matter of The Proposed Rules Regulating
Transportation By Motor Vehicle, 4 Code of Colorado Regulations 723-6 (Mar. 6, 2013),
available at http://ftc.gov/os/2013/03/130703coloradopublicutilities.pdf.
6 The FTC sued the cities of New Orleans and Minneapolis in 1984, charging both cities
with unfair competition by combining with taxicab operators to impose regulations that limited
the number of taxicab licenses, increased fares, and eliminated competition in violation of the
federal antitrust laws. The complaint against Minneapolis was withdrawn after the city revised its
ordinance to permit more competition. The complaint against New Orleans also was withdrawn
after the state authorized the conduct in question by a new law. 	See generally FTC, 1985
ANNUAL REPORT 5 (1985), available at http://www.ftc.gov/os/annualreports/ar1985.pdf.
7 Organisation for Economic Co-operation and Development (“OECD”), Directorate for
Financial and Enterprise Affairs, Competition Committee Working Party No. 2 on Competition
and Regulation, Taxi Services Regulation and Competition 199-210 (Sept. 11, 2008) (submission
of the United States), available at http://www.oecd.org/regreform/sectors/41472612.pdf; M ARK
W. 	FRANKENA 	& 	P AUL 	A. 	P AUTLER, 	AN 	ECONOMIC 	A NALYSIS 	OF 	T AXICAB
REGULATION 	(1984) 	(FTC 	Bureau 	of 	Economics 	Staff 	Report), 	available 	at
http://www.ftc.gov/be/econrpt/233832.pdf.
8 See generally U.S. DEP’T OF J USTICE & FTC, ANTITRUST ENFORCEMENT AND
INTELLECTUAL P ROPERTY RIGHTS: PROMOTING INNOVATION AND COMPETITION (2007),
available 	at 	http://www.ftc.gov/reports/innovation/P040101PromotingInnovationand
Competitionrpt0704.pdf; FTC, TO PROMOTE INNOVATION: T HE PROPER BALANCE OF
COMPETITION 	AND 	PATENT 	LAW 	AND 	POLICY 	(2003), 	available 	at
http://www.ftc.gov/os/2003/10/innovationrpt.pdf; 	FTC 	STAFF, 	ANTICIPATING 	THE 	21 st
CENTURY: COMPETITION POLICY IN THE NEW HIGH -T ECH, GLOBAL M ARKETPLACE
(1996), 	available 	at 	http://www.ftc.gov/opp/global/report/gc v1.pdf 	and 	FTC 	STAFF,

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ANTICIPATING THE 21st CENTURY: CONSUMER P ROTECTION POLICY IN THE NEW HIGH -
T ECH, 	GLOBAL 	M ARKETPLACE 	(1996), 	available 	at
http://www.ftc.gov/opp/global/report/gc v2.pdf.
9 For 	example, the 	FTC designs 	numerous 	energy cost 	disclosures, including the
EnergyGuide label for appliances and light bulbs, and has done consumer research in support of
those label designs. See, e.g., FTC Rule Concerning Disclosures Regarding Energy Consumption
and Water Use of Certain Home Appliances and Other Products Required Under the Energy
Policy and Conservation Act (“Appliance Labeling Rule”), 16 C.F.R. Part 305; see also FTC,
News Release, FTC Amends Appliance Labeling Rule to Ease Burdens on Businesses (Dec. 31,
2012), available at http://www.ftc.gov/opa/2012/12/energylabel.shtm. 	FTC staff has also
conducted research regarding consumer understanding of disclosures relating to mortgages . See,
e.g., J AMES M. LACKO & J ANIS K. PAPPALARDO , IMPROVING CONSUMER M ORTGAGE
DISCLOSURES: AN EMPIRICAL A SSESSMENT OF CURRENT AND P ROTOTYPE DISCLOSURE
FORMS 	(2007) 	(FTC 	Bureau 	of 	Economics 	Staff 	Report), 	available 	at
http://www.ftc.gov/os/2007/06/P025505MortgageDisclosureReport.pdf; 	J AMES 	M.
LACKO & J ANIS K. PAPPALARDO, THE EFFECT OF M ORTGAGE B ROKER C OMPENSATION
DISCLOSURES ON CONSUMERS AND COMPETITION: A CONTROLLED EXPERIMENT (2004)
(FTC 	Bureau 	of 	Economics 	Staff 	Report), 	available 	at
http://www.ftc.gov/os/2004/01/030123mortgagefullrpt.pdf.
10 	FTC Staff, .com Disclosures: How to Make Effective Disclosures in Digital Advertising
(2013), available at http://ftc.gov/os/2013/03/130312dotcomdisclosures.pdf.
11 See FTC Staff, Mobile Privacy Disclosures: Building Trust Through Transparency
(2013), available at http://www.ftc.gov/os/2013/02/130201mobileprivacyreport.pdf. 	See also
infra Sections IV. B. 2.-3. (discussing the FTC’s approach to data security).
12 OECD Submission, supra note 7, at 200 (“As of 2007, the general description of the
taxicab industry and taxicab regulation in the United States remains much as it was when
Frankena and Pautler described it in 1984. That is, nothing dramatic has happened to alter the
U.S. industry in the interim.”).
13 See generally Lauren Goode, Worth It? An App to Get a Cab, WALL STREET J. (June
17, 2011), available at http://blogs.wsj.com/digits/2011/06/17/worth-it-an-app-to-get-a-cab/.
14 See generally id.
15 See generally id.
16 See generally Brian X. Chen, Uber, an App That Summons a Car, Plans a Cheaper
Service Using Hybrids, N.Y. T IMES, July 1, 2012, available at http://www.nytimes.com
(discussing charging by time, distance, consumer demand, and gratuities); Michael B. Farrell,
Taxi 	app 	Hailo 	to 	expand 	service, 	BOSTON 	GLOBE , 	Feb. 	5, 	2013, 	available 	at
http://www.bostonglobe.com (discussing booking fees, service fees, and gratuities).
17 See generally Goode, supra note 13.

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18 L19-270, 19 th Council Sess. (D.C. 2012) (enacted Jan. 18, 2013) (Public Vehicle-for-
Hire Innovation Amendment Act of 2012); L19-184, 19th Council Sess. (D.C. 2012) (enacted
Aug. 2, 2012) (Taxicab Service Improvement Amendment Act of 2012).
19 L19-270, supra note 18 (amending D.C. Official Code § 50-329.02).
20 Id. (emphasis added).
21 Among these conditions are that: if a digital dispatch service connects a consumer with a
vehicle other than a taxicab, before booking the vehicle the digital dispatch service shall disclose
to the customer the applicable fare calculation method, applicable rates, and the option for an
estimated fare; upon completion of the trip, the customer shall receive a paper or electronic
receipt that lists the origination and destination of the trip, the total distance and time of the trip,
and a breakdown of the total fare paid, including any fees and gratuity; and the digital dispatch
service provides service throughout the entire District of Columbia. Id.
22 Id. (amending D.C. Official Code § 50-303(20)). The bills further provide that DCTC
may create and regulate classes of vehicles independent of taxicabs and limousines, including
sedans, “provided, that the rules and regulations are necessary for the safety of customers and
drivers, consumer protection, or the collection of non-personal trip data information.” 	Id.
(amending D.C. Official Code § 50-329).
23 This provision would further require that a digital dispatch service inform DCTC of a
proposed substantial change to its dispatch or payment solution or digital payment system for
sedans that would require written approval at least thirty days prior to the change, and notify
DCTC of any other change in the information contained in the certification or its supporting
documentation, such as contact information, within seven days of the change.
24 This provision would require that a digital dispatch service transmit the following data:
the date; operator and vehicle identifiers in an anonymous format established by DCTC; the time
at the beginning of each tour of duty; the distance of each trip; the time of pickup and drop-off of
each trip; the geospatially-recorded place of pickup of each trip; the geospatially-recorded place
of drop-off of each trip, which may be generalized to census tract level; a unique trip number
assigned by the digital dispatch service to each trip; the total fare and a breakdown of the fare
including all rates and charges and any gratuity; and the time at the end of the tour of duty.
25 See infra Sections IV. B. 2.-3. (discussing the FTC’s approach to data security).
26 See generally FTC Comments Before the Environmental Protection Agency Concerning
Proposed Confidentiality Determinations for Data Required Under the Mandatory Greenhouse
Gas Reporting Rule and Proposed Amendment to Special Rules Governing Certain Information
Obtained 	Under 	the 	Clean 	Air 	Act 	(Sept. 	30, 	2010), 	available 	at
http://www.ftc.gov/os/2010/09/100930epagreenhouse.pdf 	(discussing 	a 	proposed 	EPA 	rule
concerning the confidentiality of data submitted under EPA’s Greenhouse Gas Reporting Rule).
27 Under this provision, sedan rates and charges must: be disclosed to the passenger in a
statement of the digital dispatch service's fare calculation method; be used to calculate an
estimated fare that shall be offered to the passenger prior to accepting service, including the effect
of any applicable demand pricing; be consistent with fare calculation information posted on the
digital dispatch service’s website; and not exceed the fare estimate by more than twenty percent

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or twenty-five dollars, whichever is less, unless due to factors beyond operator control. See also
Proposed 1603.11 (requiring each dispatch service, traditional or digital, to maintain a website
with certain current information, including information about the dispatch service, a statement of
how the fare is calculated for each class of offered service, whether the dispatch service uses
demand pricing, and, if so, how such pricing affects its rates).
28 This provision would require that each digital payment system provide the passenger with
a written or electronic receipt before the passenger exits the vehicle, containing: the date and time
of the trip; trip distance; the vehicle’s tag number; the name and customer service telephone
number of the digital dispatch service; information sufficient to allow the passenger to reference
the passenger’s digital dispatch service account or payment card number used to pay the fare; the
total fare and a breakdown of the fare including all rates and charges and any gratuity; and a
statement that sedan service in Washington, D.C. is regulated by DCTC.
29 Drip pricing is a pricing technique whereby firms advertise only part of a product’s price
and reveal other charges later as the customer goes through the buying process. The additional
charges can be mandatory, such as hotel resort fees, or fees for optional upgrades and add-ons.
Drip pricing is used by many types of firms, including internet sellers, automobile dealers,
financial institutions, and rental car businesses. 	See generally FTC, A Conference on the
Economics 	of 	Drip 	Pricing 	(May 	21, 	2012),
http://www.ftc.gov/be/workshops/drippricing/index.shtml.
30 See supra note 10.
31 See supra note 2.
32 Staff recognizes that there is no “one size fits all” information security plan. Increased
levels of information sensitivity may require increased protection. 	Different technologies may
present different risks and vulnerabilities. Different types of businesses, business methods, and
customers may require businesses to address security in regard to different aspects of their
operations. The costs associated with implementation of security practices are also relevant to a
reasonableness and appropriateness inquiry. Particular security measures that may be reasonable
for the data of one business in light of all the costs and benefits may or may not be reasonable for
another business. Because businesses may grow over time, security measures should be scalable
to accommodate potential changes in the security threats they might face as a consequence of
expansion.
33 See 	generally 	FTC, 	Data 	Security, 	http://business.ftc.gov/privacy-and-security/data-
security. 	Under resulting settlement orders, the FTC has required businesses to establish,
implement, and maintain a comprehensive security program reasonably and appropriately
designed to protect the security, confidentiality, and integrity of personal information that they
collect from or about consumers. Businesses are required to have independent, third-party audits
of their security procedures to ensure compliance. 	Auditors must document the specific
administrative, technical, and physical safeguards that the business has implemented and
maintained; explain how these safeguards are appropriate to the business’s size and complexity,
the nature and scope of its activities, and the sensitivity of personal information collected from or
about consumers; explain how the safeguards address the specific security deficiencies; and
certify that the program is operating effectively. For examples of this type of settlement order,
see, e.g., In re HTC America, FTC File No. 122 3049 (Feb. 22, 2013) (proposed consent order
regarding alleged failures to reasonably and appropriately secure software developed for

15
smartphones and tablet computers, introducing security flaws that placed sensitive consumer
information at risk), available at http://www.ftc.gov/os/caselist/1223049/130222htcorder.pdf; In
re Dave & Buster’s, FTC Dkt. No. C-4291 (May 20, 2010) (consent order regarding alleged
failures to reasonably and appropriately secure credit card payment information on computer
networks), available at http://www.ftc.gov/os/caselist/0823153/100608davebustersdo.pdf; In re
The TJX Cos., FTC Dkt. No. C-4227 (July 29, 2008) (consent order regarding alleged failures to
use reasonable and appropriate security measures to prevent unauthorized access to personal
information 	on 	computer 	networks), 	available 	at
http://www.ftc.gov/os/caselist/0723055/080801tjxdo.pdf; In re BJ’s Wholesale Club, FTC Dkt.
No. C-4148 (Sept. 20, 2005) (consent order regarding alleged failures to reasonably and
appropriately 	secure 	personal 	information 	collected 	at 	stores), 	available 	at
http://www.ftc.gov/os/caselist/0423160/092305do0423160.pdf.
34 See supra note 33.