App-based car service wants in Portland, but city code stands in the way

App-based car service wants in Portland, but city code stands in the way »Play Video
A screenshot from the Uber app shows how users can see which cars are available nearby then use the app to hail a town car. The service is currently available in Seattle and San Francisco but not in Portland.

PORTLAND, Ore. – Uber, a town car service you use through a smart phone app, wants to open up shop in Portland. But in order to do so, the city will have to re-write its existing laws.

The company touts how simple it is to order a car through their service.

“Our motto says it all: we’re everyone’s private driver,” said Uber founder Travis Kalanick.

To hail a car you open the Uber app on your smartphone, use the GPS to find your exact location and hit “request car.” Generally, within minutes, a driver shows up on the corner to pick you up. When your trip ends, the payment is automatically charged to your account.

As simple as that might be, Kalanick admits starting the service in many cities has been quite tricky as they grapple with local laws and regulations. Portland is no exception.

Standing in their way is an existing city code that requires a 60-minute advance reservation for any non-taxi ride (think a black town car or SUV). Town cars in Portland are also required to charge a premium price over traditional taxis.

With those rules in place Uber’s business model wouldn’t work in Portland. That’s why an executive from the company and local lobbyists are meeting with city officials and the public this week. They hope to get support for changing city regulations and opening up the town car market.

“There are laws and regulations in Portland that are designed specifically to stifle any kind of competition or any kind of transportation alternatives in the city,” Kalanick said. “It’s done so, basically, to protect the taxi industry. In fact, Portland has some of the most extreme protectionist laws that we’ve seen around the country.”

Kalanick is especially frustrated with the regulation requiring that town cars wait 60 minutes to pick up a fare after getting a reservation.

“Why should they not be able to get a town car when they want one?” he asked.

The answer to that question lies in the agreement between city regulators and the traditional taxi industry.

Under our current system, cab companies follow certain rules set by the city. Those rules are designed to ensure that everyone who needs it has access to taxis at a set price. In exchange, taxi companies are allowed to operate under the protection of city regulators.

For instance, taxi companies are required to accept any trip, including short trips that might not be profitable.

“The city is trying to make sure that everyone has a ride home from the grocery store at a price they can afford,” explained Broadway Cab president Raye Miles. “We’re required by code to take these trips that aren’t profitable.”

Cab companies also must have vehicles to pick up patrons in wheelchairs or with other accessibility issues and must operate 24 hours a day.

Those rules might be costly, but taxi companies work with them because of the regulatory protection that comes with it.

The Portland Cab Drivers Alliance points out on its website that “unlike taxis, town cars are not required to uphold broader community values.”

This is where the protection for taxis comes in; since town cars and shuttles aren’t required to follow these rules, they aren’t allowed to compete directly with taxis under the current law.

Miles said the taxi industry in Portland hasn’t come up with a specific plan in regards to Uber, but she said for years she’s been cautioning the city against deregulating the industry.

“We don’t see them as an added value to the city,” Miles said.

Kalanick argues that in reality the regulations don’t protect customers. He said he has heard stories of people not being able to find a cab when they want one, or drivers picking and choosing fares because the demand outstrips the supply.

“Let the customers decide,” Kalanick said. “I think it’s a bad decision when the taxi companies have somehow become in charge of what’s good for people.”

He said allowing Uber and other town car services to operate more freely would create jobs and reduce the total number of cars on the road.

“What kind of economy is the city trying to build? It’s definitely not the kind that I’m used to seeing in the United States,” Kalanick said. “It’s this little corner of the world where they’ve been able to control prices, control supply and outlaw competition.”

Technology in the transportation industry

Miles said the taxi industry isn’t opposed to technology that better serves customers. Broadway Cab, for example, works with an app called Taxi Magic that lets people hail a cab from a smartphone.

“We’re not resisting technology in our industry,” she said. “We’re resisting this notion that some people are allowed to skim some of the cream off the industry without any of the burden of regulation.”

Uber has said it’s interested in Portland precisely because the residents are so tech savvy.

“We view Portland as the perfect city for Uber,” said company spokesman Andrew Noyes. “Portland is an innovative city, embraces technology, is on the cutting edge of things. You all have already demonstrated leadership with technology.”

Noyes said Portland also has a proven record of being transportation innovators and that Uber sees itself as a natural extension of that trend.

Miles said the taxi industry isn’t trying to stifle progress or the free market, they just want to make it a fair fight.

“If the city made (Uber) comply with all the regulations we have to comply with we can probably discuss it,” she said. “But unless they can mandate and regulate their rates like ours it’s forcing us to compete on an uneven playing field.”

Grassroots demand

There is already some grassroots demand for Uber in Portland; as of Monday night, 176 people signed a petition on Change.org, asking for Uber in Portland. Customers have also given them generally favorable reviews on Yelp in both Seattle and San Francisco.

Uber is trying to drum up public pressure with a social media campaign featuring the hashtag #WeWantUberPDX.

“It starts with Portland’s residents,” Kalanick said.

Uber in other cities

Uber is currently operating in 35 markets around the world, including Seattle, San Francisco and Los Angeles. While Kalanick said business is growing overall by 18 percent each month, regulators and officials have not always taken kindly to the car service.

The company is currently in the middle of regulatory fights similar to Portland's in Miami and Houston.

Houston, for example, requires town cars to charge a minimum fare of $70, even for short trips.

In Miami there is a similar law as Portland where town car trips must be booked 60 minutes in advance. Miami also has a $70 minimum fare.

Earlier this year a Miami city commissioner introduced legislation to change some of the city ordinances giving Uber and other car services room to operate.

Uber has lobbied city leaders in both places to change the law.