Uber app may be subjected to state taxi regulations

Here’s an interesting story by Jack Lambert from the Baltimore Business Journal.

Jack LambertDigital Producer-Baltimore Business JournalEmail  | Twitter

State regulators are recommending subjecting technology startup Uber Technologies Inc. to the same regulations that taxi and limousine copanies are required to follow in Maryland, a move that competitors say will level the playing field.

Uber is an app that allows users to directly request taxi, sedan or limousine servicesfrom a mobile device. The San Francisco-based company should be classified as a passenger-for-hire service in Maryland, according to testimony submitted May 9 by the state Public Service Commission. Uber, which launched service in Baltimore in late January, has described itself as a technology company, meaning it is not subject to state regulations for taxi and limousines companies.

If Uber were to be classified as a passenger-for-hire service, it would be subject to licensing and insurance requirements that other such companies must follow.

The state Public Service Commission, which oversees utilities and taxi services, will hold an administrative hearing on the recommendation on May 15.

PSC representatives could not be immediately reached for comment for this article.

If Uber is ruled a passenger-for-hire service in Maryland it could threaten the company’s business model in the state. Uber was founded in 2009 as a way to offer fast and high-end transportation. Passengers can request cars like Lincoln Town Cars and Cadillacs through their phone without calling a taxi dispatcher. The cars will arrive to the specified location, and passengers pay for their ride directly to the company instead of to the driver.

The service is pricier than standard taxis. Uber charges a $7 flat rate and $3.25 per mile for speeds over 11 miles per hour in Baltimore. But the company does not own its cars or employ drivers, instead contracting out with drivers of other luxury cars. Uber offers its “black car option” in Baltimore. Sample rates in the city include $20 for a trip from Fells Point to Mt. Vernon, and $22 from Federal Hill to Canton.

Rachel Holt, regional general manager for the East Coast for Uber, denied the company is a transportation service.

“Uber does not own a single car or employ a single driver,” Holt said in an email. “To say that Uber is transportation provider is like saying that Orbitz is an airline. Uber is a technology platform upon which riders can find rides with licensed, insured partner-drivers who are already regulated by the state.”

Insurance and licenses are broad categories and do not mean the company is complying with regulations, said Matthew W. Daus, president of the International Association of Transportation Regulators. In Maryland, for example, passenger-for-hire services must employ drivers with a special license and must ownautomobile insurance ranging from $50,000 to $500,000, depending on the vehicle.

Passengers should know their drivers have been drug tested, background checked and have proper insurance, Daus said. The best way to do that, he said, is to meetPublic Service Commission standards.

“We just think the should comply with the law like everybody else,” Daus said. “We are a nation of laws.

Uber has met resistance from Maryland taxi and limousine companies in the past. Yellow Cab of Baltimore filed a request for Uber to cease operating luxury towncar service in Baltimore because the service did not comply with insurance regulations. The Public Service Commission denied that request in February.

Transportation groups have also fought against the service in other cities. The Chicago taxi industry filed a lawsuit in October against the company after Uber started service in Chicago in September 2011. The Washington, D.C., city council passed legislation in Decemberlegalizing the company as a “digital dispatch” service after receiving industry complaints.

Uber does not have to follow regulations standard for every other company, said Alfred Lagasse, chief executive officer of the Taxicab, Limousine and Paratransit Association. That puts standard taxi cabs and limousine companies at a disadvantage when competing against the service, Lagasse said.

“How can Uber not be a transportation company when it is doing all the exact same services?” he said. “The basic parameters to be in the transportation business are the same.

We will see how this all plays out……