Uber Agrees to Stand Down in Portland
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Oregon's largest city gets the infamous disruptor to cease operations for three months.
The Uber wars have taken another dramatic turn as the controversial ride-sharing service agreed to cease operations in the city of Portland, Oregon, for three months.
It’s the first time that Uber has voluntarily removed its services from a city, according to The Oregonian. However, far from a retreat, the temporary setback is part of a larger effort to make Uber a permanent resident in the City of Roses.
The company said it was temporarily pulling its app-based service so that Portland’s City Hall can use the window to adjust local regulations allowing ride-sharing companies to legally operate. In a post on its Uber Portland Twitter account, the company said:
Excited to create a permanent home in Portland. Starting Sunday, we’ll be pausing pick-ups within PDX until April. https://t.co/bl4kPODDVb
— Uber Portland (@Uber_PDX) December 19, 2014That sentiment was backed in a statement from the office of Portland Mayor Charlie Hales, which read in part: "The City is committed to developing a new regulatory framework that includes innovative transportation network companies."
According to the press release published on Uber’s blog, the newly formed private for-hire transportation (PFHT) Innovation Task Force will meet on Jan. 14 to begin outlining new regulation proposals. Amongst the potential regulations the PFHT Innovation Task Force will consider include a limit on the number permits offered to drivers and whether to establish a regulated pricing system. Other issues such as rider accessibility requirements and driver working standards will also be discussed.
After the task force has completed its recommendations, the Portland Bureau of Transportation will begin issuing driver permits in accordance with the newly established standards and regulations.
So, why exactly are the Uber wars such a big thing? And why has the company been forced into this unusual compromise with a city that’s so friendly to other shared-service companies?
After all, Mayor Hales recently went out of his way to legitimize home-share service Airbnb, writing in an Oregonian op-ed: “I believe passionately in those progressive, communitarian values,” established by shared-service ventures.
Fusion’s Alexis Madrigal has an excellent break down of what went wrong in the negotiations between Uber and Portland. Mainly, that rather than engage with presumably friendly city officials before opening their Portland branch, Uber simply followed its previous model of making an unannounced deployment into a new area and then hoping its fleet of new drivers and happy customers would serve as a de facto lobbying contingent that would pressure officials into tolerating Uber’s presence. However, in this case Uber may have miscalculated by putting Portland officials in an awkward position.
As Madrigal writes:
Let’s say, for sheer argument’s sake, that Portland officials really like Uber. Let’s say they even would like to have Uber in their town. Still, they need Uber to play by the rules, or else they’ve set a miserable precedent for the next Silicon Valley-backed corporation to run roughshod over their regulations. To Portland’s elected representatives, the way Uber has smashed its way into markets raises real questions about the nature of representative democracy.
City officials around the country must also contend with the mixed media coverage Uber has been generating recently after a number of safety incidents, such as the alleged rape of an Uber rider in Boston this week.
Still, it seems all but certain that Uber will eventually find a welcoming home in Portland. In fact, the City Council’s regulation review model may offer a blueprint for both Uber, other shared service companies, and welcoming cities moving forward that combines old-fashioned regulatory standards with the willingness to engage disruptive but potentially helpful business models.
As Hales writes in his op-ed:
“Governments must ensure the safety of everyone, while making sure that companies are responsibly serving their customers and our residents. It's not sufficient merely for us to welcome new technology, new companies and new economies.”
(Image by JPL Designs / Shutterstock.com)