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Uber, Defying City Hall, Launches Its Service in Portland Today

City officials, "completely, utterly blindsided" by San Francisco startup, pledge crackdown.

The ride-sharing service Uber will begin running cars today in Portland, defying Portland City Hall's rules barring the company from operating within city limits.

"We are launching today," says Uber general manager Brooke Steger. "The city still has not written us into regulations. It's our duty to listen to the residents of Portland."

It's a brash and provocative move by the San Francisco-based startup, valued this week at $40 billion. Uber enlists drivers to turn their own cars into de facto taxis, with customers summoning rides with the tap of a phone app. 

City Commissioner Steve Novick says Uber's drivers will face fines starting at $2,250 for a first offense—and the company faces a $1,500 fine for every driver the city catches.

"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 says in a statement. "We have told Uber and [its competitor] Lyft that they are welcome to offer ideas for regulatory changes. Uber has chosen instead to break the law."

As WW reported in July, Uber has tried to break into the Portland market for nearly two years, but has been barred by the city's Private For-Hire Transportation Board of Review, which regulates taxis, limos and town cars. 

Uber is launching anyway, even though some city officials had said they want to seek a compromise.

Established taxi companies, including Radio Cab and Broadway Cab, have opposed the service. So have labor unions, including the powerful Oregon AFL-CIO. Portland city officials, including Mayor Charlie Hales and Novick, have been wary of changing the rules—though Novick has said he's willing to consider eventual rule changes.

Steger says Uber is unwilling to wait.

"There is so much outcry for us to operate," Steger says. "We're also seeing hundreds of drivers who are already dropping off in Portland, and are not able to turn around and pick someone up. We look forward to the city writing transportation network companies into their regulatory code."

Uber launched its service Nov. 12 in Gresham, Hillsboro, Beaverton and Tigard, picking up fares in those suburban cities and putting more pressure on Portland to approve the company.

The company's decision to launch today follows a Dec. 3 letter to the City Council, signed by more than 40 hotel and restaurant owners and real-estate developers, asking for Uber to be legalized. (Among the signatories: Travel Portland, the city's tourism board.)

"It's difficult to understand why Portland is now the largest city in the country where ride sharing companies are not able to operate," the letter says. "It is inconsistent with the kind of City Commission we know you are and inconsistent with who we are as a city."

Novick released a statement 12 minutes after Uber announced the start of its service. He warned that drivers will face fines, and said passengers face the danger of drivers not having commercial insurance.

UPDATE, 5:15 pm: Reached via text by WW, Novick added another shot.

"I guess this kind of behavior is to be expected from a company that plans to spend a million dollars investigating journalists' private lives," Novick says. "And that keeps track of the sex lives of its own riders."

He's referring to comments made by Uber executive Emil Michael last month about investigating unfriendly reporters, and to the company's blog post analyzing the "rides of glory" made after one-night stands.

Josh Alpert, a top aide to Mayor Charlie Hales, tells WW that Uber "completely, utterly blindsided" city officials, who had been preparing revisions to the city's taxi policy. No one in City Hall knew Uber was defying city rules until this afternoon.

David Plouffe, one of Uber's top executives, called Portland City Hall on Thursday—and when Hales and Novick learned today what he was calling about, they called him back with a firm message.

"We're going to enforce the law," Alpert says. "We've been planning for this, with the hope this wouldn't be something we'd have to do. We're not used in Portland to having companies trying to manhandle their way in without regard for customer safety or other companies. But we're prepared."

UPDATE, 9:57 pm: Uber spokeswoman Eva Behrend says the company will continue discussing rule changes with City Hall, even though officials have described them as scofflaws. But she adds that the company will support its drivers by waging a legal fight against city fines.

"We have been speaking with the city for well over a year and remain committed to continuing the discussion," Behrend says. "Uber stands by every driver partner and will fight unjust citations moving forward."