The ride-sharing company Uber has agreed to stop picking up riders in Portland for the next three months, as part of an agreement with Mayor Charlie Hales to speed up the process for new taxi and ride-sharing regulations, officials from the city and Uber tell WW.
The agreement makes Portland the first city in the United States where Uber has voluntarily agreed to cease operating after entering a market.
The deal, reached shortly after 1 pm today, ends a nearly two-week standoff between the company and City Hall that began when Uber launched its service Dec. 5 in defiance of Portland city rules. The agreement will likely avert a federal court fight over the city's lawsuit against Uber.
"The city and Uber started off on the wrong foot," Hales tells WW, "but this agreement resets the clock. We will work with Uber moving forward, and we thank other sharing-economy companies, like Lyft, for working with the city to bring our policies up-to-date."
Uber has told Hales that it will suspend operations in the late evening hours of Sunday, Dec. 21. "We have been informed that Uber will turn off its app for Portland at 11:59 p.m. Sunday," says Hales spokesman Dana Haynes.
In return, Hales has pledged to write new taxi and ride-sharing regulations—or give Uber and other ride-sharing companies a temporary agreement to operate—by April 9, 2015.
"They have agreed to a three-month timeline," says Brooke Steger, general manager for Uber. "We will be stopping pickups in Portland for the duration of that time. This is a temporary pause. We will be back."
Hales will announce later today that the city is convening a task force to examine possible revisions to four city rules on cabs and ride-sharing. Those issues are the cap on the number of taxi licenses, the set fees taxis must charge riders, the number of cars available to people with disabilities, and safety requirements, including that drivers carry commercial insurance and receive thorough background checks.
Hales' staffers tell WW the last item—safety assurances for passengers—will be the city's top priority during the next three months.
The city's transportation bureau will also oversee a study period, starting in April and lasting one or two months, to see how Uber's arrival changes the taxi market.
City Commissioner Steve Novick, who oversees transportation, says he's pleased with the deal.
But he emphasizes that once safety requirements are in place next April, he wants at least two months of letting all hired transportation—taxis, town cars and ride-sharing companies—operate without limits on prices and permits before considering permanent changes to those rules.
"As I've been saying for months, I'm fully committed to a complete look at existing regulations," Novick tells WW. "Having a few months of Taxis Gone Wild will give us a chance to reexamine."
Uber, a 5-year-old San Francisco start up now valued at $41 billion, has been trying for nearly two years to break into the Portland market with its service, which lets drivers turn their cars into taxis that customers summon with a tap of their smartphones.
The company stunned city officials Dec. 5 by launching in Portland in defiance of city rules prohibiting unlicensed cabs.
Since then, City Hall and Uber have been locked in a public grudge match. City officials scored a blow by suing Uber for a judge's injunction to block the service. But as WW reported this week, the city has been unsuccessful in fining drivers or impounding their cars.
In public, Hales and Novick declared Uber a scofflaw company—"Uber seems like a bunch of thugs," Novick told The New York Times—and vowed to crack down.
But representatives from their offices quietly resumed talks with Uber on Sunday, Dec. 14, seeking a way for both sides to save face and avoid a court battle.
"City policy has to acknowledge the new reality of the sharing economy," Hales tells WW. "We spent much of this year working on short-term rental rules. The private-for-hire transportation system is next, and we're dedicated to getting it done right."
This is only the second time worldwide that Uber has voluntarily left a market: The company withdrew from Vancouver, B.C. in 2012, after the provincial taxi board ruled it had to charge a minimum of $75 per trip.
More often, Uber has been forced out of cities. A judge's order kicked the company out of Nevada in November. It has been banned in Germany, and faces bans in Thailand and some cities in India after alleged rapes by drivers.
Regulatory crackdowns have not slowed Uber's meteoric rise: The company has collected $2.7 billion in funding from investors since launching its app in 2009.
Steger tells WW that Uber will continue operating in Portland's suburbs, and the company will aid its area drivers by adding a $5 bonus anytime they drop off a passenger in Portland—since they won't be able to pick up a return fare.
She says Uber agreed to suspend its service in Portland because that's the fastest way to reach the company's goal: legal operation.
"Portland is a very unique city," she says. "So we did something we haven't done before. We have to do what's best for our drivers, and getting permanent regulations is the best decision for them."