Ride-share firm driving dispute

Sept. 14--Samuel Bollen is either a driving force of the so-called "sharing economy" or a rogue agent.

Bollen, a 58-year-old Springfield resident, just wants to make a few bucks driving his car for Uber, the ride-sharing service that has infuriated taxi drivers and flummoxed regulators worldwide. A regional Uber representative says there are now dozens of drivers in the area.

Controversy has tailed the company since it began operating in the Eugene-Springfield area July 23.

A lawyer for Oregon Taxi, the area's largest taxi company, alleges Uber is gaining an unfair advantage by ignoring city taxi regulations.

"Selective enforcement of local ordinances is not acceptable and will ultimately result in a rogue public transportation system if Uber is allowed to continue to operate without regulation," the lawyer, Andrew Parks, wrote in his letter to Eugene and Springfield city officials dated two days after Uber's local launch.

Uber continues to operate as officials for both cities review the matter.

Parks is scheduled to meet with Eugene city officials later this month to discuss the company's concerns.

Brooke Steger, Uber Seattle's general manager, met with transportation officials from Eugene, Springfield and Lane County more than a week ago to provide information about Uber. She will meet with Eugene City Manager Jon Ruiz and others on Tuesday.

Uber says it is vigilant about self-policing what it calls its "driver partners" and their vehicles. And the company says it's not opposed to regulation.

"We are definitely in support of regulation as long as they're promoting public safety and not just an existing business," Steger said.

But the company maintains the current decades-old local taxi regulations don't apply to it, noting there's "fundamental differences" between Uber and taxi companies.

Driving on Pioneer Parkway West, Bollen said he understands why Oregon Taxi is upset. But he says Oregon Taxi should have anticipated this time would come. Look at Blockbuster and Hollywood Video, he notes, the two one-time video rental juggernauts done in by Netflix and other streaming video services.

"You got to keep up with the technology, stay on the cutting edge," he said. "They could have come up with something like this."

Electronic transaction

Founded in 2009, San Francisco-based Uber allows customers to hail a private driver using their smartphones.

Customers who download the app can request a ride and track the driver on his way to the pickup location. No money changes hands once the driver reaches the destination; the transaction is made electronically.

Uber relies on a pool of local drivers, acting as independent contractors, who use their private cars to provide rides.

Drivers, who set their own hours, must pay for gas, vehicle maintenance and insurance out of the 80 percent cut they get from each fare. The company takes the remaining 20 percent. Uber covers the bank fees incurred when paying fares electronically and the commercial insurance.

Uber and Airbnb, the lodging rental service, are being hailed as examples of the sharing economy, where people share rather than own goods and services.

Uber is a hot commodity, recently valued at a staggering $18 billion. Investors have plowed hundreds of millions of dollars of capital into the privately held firm, allowing it to expand rapidly across the globe, including entering dozens of U.S. cities.

The company has gotten a chilly reception in these new markets, with taxi companies accusing it of operating illegally.

Oregon Taxi's argument adds to that chorus: Neither Uber nor its drivers obtained the "public passenger vehicle" licenses required in the Eugene-Springfield area to drive someone around for money, so they are operating illegally.

The Eugene-Springfield area has 19 for-hire licensed transportation companies, including pedicabs, shuttles and taxis. There are 278 licensed taxi drivers, including 150 from Oregon Taxi.

City regulations make sure the vehicles are safe, insured and easily identifiable, their drivers aren't a public menace and the fares they charge aren't calculated arbitrarily. Taxi companies also are required to keep records of complaints.

The city charges fees to license a taxi company, permit a taxi and certify a taxi driver. The license and driver certification fees are $300 and $25, respectively, each year. The vehicle permit fee is $100.

Officials for both cities acknowledge their regulations haven't kept up with technology.

"They (Uber) are expanding pretty rapidly, and nobody's codes are written with these business models in mind," said Laura Hammond, spokewoman for the city of Eugene's planning and development department, which manages the licensing program for both cities.

Len Goodwin, director of public works and development services for the city of Springfield, said there are likely gaps in the regulations Uber could exploit because they were written years ago without the ride-sharing service in mind.

For example, he said, the licensing requirement doesn't apply to rental cars "that are rented to be driven by the renter or agent."

Goodwin said Uber could argue a driver is a customer's agent while renting out his vehicle and therefore falls under this exemption.

The stance may lack common sense, Goodwin said, but "it is an argument that I would expect a company like Uber to make."

Parks said he hoped to "know more" after his meeting. He declined further comment. Jay Mayernik, Oregon Taxi's general manager, also declined comment.

Mayor Kitty Piercy said the issue is nuanced.

"On one hand, we want to support our local businesses, and on the other hand, the 'sharing economy' makes it possible for people to access services at lower costs or to provide services in new ways," she said in an email. "We will learn and move forward. It's extremely interesting."

Not all local taxi companies are as worried about Uber's entry in the local area.

Lenny Michael, owner of Junction City-based Jerry's Taxi, agreed Uber should play by the same rules, but even if it doesn't, he doubts it will take much business from local taxis.

The six taxis Michael owns and leases out to drivers stay afloat during the day by driving Oregon Health Plan clients to medical appointments. The state reimburses taxis for those trips.

Business during the night is sparse, Michael said. A decade ago, a taxi driver could earn $250 on a good night. He is now lucky to earn $100, even though the fare rate has doubled during the last 10 years, he said.

"There's too many cabs chasing too few fares already," Michael said.

Getting to know Eugene

Bollen and other Uber drivers continue to work as they wait for the outcome of the local tug-of-war between innovation and regulation.

Steger said there are "dozens" of Uber drivers in the area. Bollen said the last figure he heard was 22, with up to six cars on the road at any one time.

Bollen responded to an Uber ad he read on Craiglist more than two months ago. He was looking to make extra money and was attracted to the flexible hours.

"It's a good way to get to know Eugene, I guess," he said, driving his 10-year-old Chevy Malibu that's logged 115,000 miles.

Bollen said his application process included emailing exterior and interior pictures of his vehicle and taking it in to a local mechanic for an inspection.

"(Uber) said make sure it's clean," he said.

Uber said applicants are subject to an "industry-leading," three-step background check. Drivers use their personal insurance, but Uber says customers also are covered by Uber's own commercial insurance policies.

Uber increases its fares during its busiest times, a practice it calls "price surging." Uber says this pricing strategy puts more cars on the road to meet higher demand, but some customers have criticized it as price gouging.

Students using service

Steger maintains the technology Uber uses makes it a better choice than taxis for passengers. Its rating system, as one example, ensures the ride-sharing service retains the best drivers, she said.

Back behind the wheel, Bollen said most customers are University of Oregon students or young business travelers.

It should be no surprise Uber is courting the thousands of tech-savvy University of Oregon students who don't own their own car.

Cody Koenig, a 20-year-old incoming senior, hailed Uber to pick up him and his friend after the Duck football game against South Dakota on Aug. 30.

His friend "was hesitant to take a ride in stranger's car" but it was a good experience, he said.

While the ride was free due to the promotion in place at the time, Koenig said he'd pay to use Uber in the future as it can be cheaper than a taxi.

Students are talking about Uber on campus, Koenig said. Many students come from Southern California, where Uber has established a strong foothold, and bring word of the ride-sharing service north. Koenig expects the service to become more popular when fall classes start later this month.

"It's a great alternative for students," he said.

The Register-Guard checked in with Bollen two week after hailing him.

Bollen said he had gross pre-tax earnings of $725 driving 45 to 50 hours his first week. He estimated he spent $150 in gas.

Business has slowed down after a promotion giving away rides ended last week, he said, but fares were still steady.

Bollen said he'll stick with it even as the cities weigh Oregon Taxi's request to pull him and other Uber drivers off the road.

"I really enjoy it," he said. "If it happens to be a slow time, you just park and do some reading or something."

ROUGH ROAD

Controversy has greeted Uber, the ride-sharing service that is rapidly expanding around the globe, with taxi companies accusing it of flouting regulations and operating illegally.

Examples:

Salem: Uber launched in the capital on the same day it did in Eugene-Springfield. A week later, Salem officials sent Uber a warning letter reminding the company of the city's taxi licensing requirements.

Portland: Uber is interested in launching in the Rose City but its for-hire regulations are more onerous, including a requirement for a 60-minute advance reservation for a non-taxi ride.

Seattle: Earlier this year, the city capped the number of drivers for ride-sharing services that could be on the road at one time. The city and ride-sharing services then reached a deal that included no cap after a group gathered enough signatures to suspend the regulations pending a public vote. But the unrest continues. Uber drivers staged a demonstration, honking their horns from Uber'sSeattle headquarters on Aug. 29 to protest a fare discount they say forces them to work longer for the same pay.

Europe: In June, taxi drivers brought traffic to a standstill across Europe when they stopped in the middle of busy streets to protest Uber. On Sept. 2, a court in Germany halted Uber's most popular service as it weighs whether it unfairly competes with taxis.

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