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uberxUber is launching in Portland and city officials are not happy about it.

The on-demand transportation service launched at 5 p.m. today in the Rose City, which had previously been the largest city in the country without Uber or Lyft.

https://twitter.com/wht_raja_tweets/status/541059152051593217

In a statement, Portland City Commissioner Steve Novick said that the city is prepared to issue civil and criminal penalties against Uber and its drivers for operating without required permits and inspections.

uberpdx121“There’s nothing sharing about this so-called ‘sharing economy’ company: They want to profit in Portland without playing by the same rules as existing cab companies,” Novick said in a statement. “People who pick up passengers for Uber in Portland should know that they are operating illegally and could be subject to penalties. Public safety, fairness among competitors and customer service are our top priorities. Unlike permitted drivers, Uber drivers do not carry commercial insurance, putting Portland customers at great risk.”

Uber has launched its uberX service — which lets drivers use their own cars to shuttle people around — in six other Oregon cities, but curiously stayed out of Portland even though the company often sets up shop in cities without first becoming regulated — it did so in Seattle before laws were put into place this past June. However, Uber suspended operations in Nevada last month after pushback from government regulators.

We’ve reached out to Uber for comment. [Follow-up: Here’s why Uber launched in Portland despite being illegal]

This move likely won’t help the company’s efforts to improve its relationships with government officials and customers amid problems that have caused Uber a PR nightmare over the past month, including an executive telling a reporter that the company should hire an opposition research firm to target journalists critical of Uber, and the general manager of Uber’s New York office being disciplined for tracking a reporter’s rides without her permission.

Portland City Commissioner Steve Novick.
Portland City Commissioner Steve Novick.

The company, which just raised another $1.2 billion at a massive $40 billion valuation, vowed to be a “smarter and more humble company” in a recent letter penned by CEO Travis Kalanick.

“Fortunately, taking swift action is where Uber shines, and we will be making changes in the months ahead,” Kalanick wrote in a blog post. “Done right, it will lead to a smarter and more humble company that sets new standards in data privacy, gives back more to the cities we serve and defines and refines our company culture effectively.”

uberpdx333In an interview with GeekWire this past August, Novick made it clear that the city was taking its time in terms of allowing companies like Uber and Lyft into Portland. Novick said the issue was not as important for his office as tasks like fixing broken streets, preparing for an earthquake, and reducing unnecessary emergency room visits.

The commissioner also wasn’t concerned about Portland being seen as a city stifling innovation by not allowing companies like Uber to operate. When Seattle legalized Uber, Lyft, and Sidecar, Mayor Ed Murray touted his city as one that “embraces this rapidly transforming industry and recognizes that Seattle must stand at the forefront of innovation and not impede new ideas or add the burden of unnecessary regulations.”

“I don’t really care if we’re looked at as an innovate city,” Novick said. “I care about getting the right policies in place.”

Last month, the Portland Bureau of Transportation found that demand for taxi rides is exceeding supply and in response has temporarily lifted restrictions to allow for more taxi cabs. The demand is not too surprising given a recent study from the R Street Institute that found Portland’s transportation options to be lackluster compared to other U.S. cities.

The city told GeekWire this afternoon that it plans to begin “enforcement actions” against Uber today at 5:30 p.m. if the company begins operating in Portland. This is certainly not the first time a city has threatened to arrest and/or fine Uber drivers for operating illegally.

“We conducted an enforcement action this evening shortly after Uber announced that it began operating in Portland, knowingly without permits and against city code,” Bryan Hockaday, a policy and communications advisor for Novick, told GeekWire. “Although an Uber vehicle did not arrive at our enforcement location, Uber drivers did accept ride requests placed by Private For Hire Transportation enforcement staff. Final results of tonight’s enforcement action will be released next week and staff will continue enforcement against any company, vehicle, or driver operating without appropriate permits.”

Mayor Charlie Hales just posted on Facebook, noting that “people should know that Uber’s action is illegal.” Here’s his post in full:

The media were alerted today that Uber would begin illegal operations in Portland tonight.

People should know that Uber’s action is illegal. The city will enforce existing regulations. That could include fines for the company, as well as fines for drivers.

Transportation Commissioner Steve Novick is convening a task force to re-examine existing taxi regulations, with an eye on protecting consumers and drivers. Specific questions should be addressed to Commissioner Novick.

The City of Portland needs to create policies that ensure safety and access for everyone. We want to make sure such policies do not adversely impact the low-income immigrant populations that currently drive taxis.

In the meantime: Portland embraces the technology of the sharing economy. The city will continue to work with transportation-network companies like Lyft to embrace that economy. To the degree that Uber wants to be part of that process: fine.

It’s worth noting that Hales is a big supporter of Airbnb, another “sharing economy” company that is similar to Uber in some ways. Portland made it legal for the home-sharing company to operate in the city this past August. In March, Airbnb announced a long-term initiative called “Shared City,” and picked Portland as its first destination.

Here’s the full statement from Novick:

News Release:

Uber and its drivers may face penalties, fines for operating illegally in Portland, Transportation Bureau warns

(Dec. 5, 2014) The Portland Bureau of Transportation has learned that transportation company Uber has said it will start offering taxi service in Portland illegally on Friday night.

City Commissioner Steve Novick, who oversees PBOT, said the City is prepared to issue civil and criminal penalties against Uber and its drivers for operating without required permits and inspections. The City of Portland requires permits for drivers and companies that offer taxi or executive sedan service within the city limits.

“There’s nothing sharing about this so-called ‘sharing economy’ company: They want to profit in Portland without playing by the same rules as existing cab companies,” Novick said. “People who pick up passengers for Uber in Portland should know that they are operating illegally and could be subject to penalties. Public safety, fairness among competitors and customer service are our top priorities. Unlike permitted drivers, Uber drivers do not carry commercial insurance, putting Portland customers at great risk.”

Portland and Vancouver, Wash. are the only cities in the metropolitan area that regulate taxi companies. Uber recently started operating in Vancouver without permits and in other area cities that do not regulate taxis.

Since the City Council moved taxi regulation from the Revenue Bureau to PBOT, effective July 1, Commissioner Novick and transportation officials started a top-to-bottom review intended to update the City’s taxi and executive sedan regulations.

Commissioner Novick is convening a task force to reexamine existing taxi regulations and see if those regulations should be restructured while protecting consumers and drivers.

“We have told Uber and Lyft that they are welcome to offer ideas for regulatory changes,” Novick said. “Uber has chosen instead to break the law.”

It is illegal for motorists to pick up passengers for a fee in the Portland city limits without proper permits. Taxis that pick up passengers outside of Portland may drop off those passengers in Portland without a permit.

Anyone in Portland can use the smartphone app Curb to call taxis from Broadway and Radio Cab, which are two of the largest permitted taxi companies in the city.

The three most common violations of City Code that city enforcement officers find, and which Uber and its drivers may be in violation of, are:

The Limited Passenger Transportation and Taxi Driver Permit requirements ensure the public that drivers have passed annual City-required annual background checks.

The Taxi Company Permit requirement ensures the public that licensed companies have appropriate commercial insurance that will cover passengers in the event of a crash, and that the companies’ drivers have annual City-required background checks and inspected vehicles.

The Taxiplate display requirement calls for posting of a metal plate on the vehicle with an identification number. It helps customers and enforcement officers identify permitted operators.

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