Ride or Die: Six Things You Need to Know About Tuesday's Pivotal Vote on Uber

Uber is back, baby. Lyft is almost legal. Portland's cab companies are wild with rage.

And everything hinges on a City Council vote Tuesday night.

Mayor Charlie Hales and Commissioner Steve Novick ended three months of waffling with a bold play announced Friday afternoon. Their new plan is the first breakthrough on ride-hailing apps in PDX since Hales shooed Uber out of town last December. It could let Uber and Lyft operate as soon as this week, while radically deregulating the taxi market for the next 120 days.

Here's what you need to know about the new plan before the 5 pm Tuesday hearing and vote.

1. Hales and Novick overruled their own task force and went back to their original plan. When Hales cut a deal with Uber in December, he and Novick announced City Hall would open up the market by temporarily removing rules about how many cabs can operate at any one time, and what taxis can charge customers. (The catch phrase: "Taxis Gone Wild.") They then assigned a citizen task force to do the patented "Portland process" tango of public hearings. That task force bowed to pressure from cab companies, who didn't want a free-for-all on their numbers and prices.

When the task force's plan came to City Council for a vote on April 9, the hearing was a fiasco. The three other commissioners questioned why Uber could charge what it liked while cabs were curtailed, and challenged the Silicon Valley company's commitment to giving rider data to city regulators or providing service to passengers with disabilities.

The mayor was running out of time: He'd blown an April 9 deadline with Uber, and wanted to at least keep his word on the month in which ride-hailing apps could return. So he and Novick surprised Portland last Friday with a new deal: the old deal. They junked a big part of the task force's compromise—the price caps on cabs—and revived the full "Taxis Gone Wild" test period.

2. Uber and Lyft won by speaking softly and carrying a big stick shift. Uber always had a leg up in the fight with taxi companies: a handshake agreement with Hales made over political consultant Mark Wiener's dinner table in December. But the company and its top competitor, Lyft, helped their cause by making some big concessions in the past week.

The ride-app companies agreed to hand over data on their trips: the prices, length and locations of trips, as well as users' zip codes. (This is data Uber has already agreed to give up in Boston.) And the companies have pledged to utilize contractors who would guarantee rides to people with disabilities. It will the first time Uber has entered a U.S. market with a contractor ensuring disabled access. (And it's a big deal, seeing as Uber has been sued for driver decisions such as stuffing a seeing-eye dog in a trunk.)

But Uber and Lyft also have a trump card that is forcing Hales to work faster. If he doesn't keep his pledge to permit them to operate by the end of April, they could defy City Hall like Uber did in December—this time with the argument they tried to play by the rules and got screwed. Portland regulators learned last year that they had almost no power to crack down on Uber and Lyft: They couldn't tow cars, and they were bad at stings. (UPDATE, 1:40 pm: The city's new rules for Uber include legal justification for towing and impounding cars.)

3. Hales is giving cabs a level playing field—the worst one possible. The mayor offered cab companies a choice: Keep the current rules on the taxi market, or get the same deregulation as Uber and Lyft. The taxi industry chose… both. They demanded a "level playing field" while saying a removal of the caps on number of cabs and their prices would create a "race to the bottom." They gambled that Hales or Novick would force Uber to accept price controls, and limit the number of ride-app drivers by making permitting requirements steep.

No dice. WW observed last week that City Council would have to decide whether it "should release cabbies into the free market, or force Uber to meet existing taxi regulations." Hales and Novick picked the free market.

Cab companies are furious. But they can no longer claim the regulations are stacked against them. Instead, they're arguing that without City Hall's help, they'll go out of business. "With few fixed costs, and billions of dollars in capitalization, Uber and Lyft can, and likely will, lower rates significantly below what taxis must charge to be sustainable," Broadway Cab president Raye Miles said in a statement Friday.

But her complaint barely matters, because…

4. Novick dumped the cab companies on the side of the road. Six months ago, when Novick was comparing Uber to the Third Reich, he seemed like the taxi industry's best hope for keeping Uber out. The biggest surprise of Friday's announcement was Novick's public shivving of the cab companies.

“The existing taxi companies have [argued] that they should be protected from competition," he wrote in a statement, "in order to ensure a living wage for drivers and good service for people with disabilities. Given that our best information is that the average net hourly income of Portland taxi drivers is $6.22 an hour, and given the complaints people in the disability community have about taxi service, we are not entirely persuaded by that argument.”

That sounds like the end of a beautiful friendship.

5. Amanda Fritz can't stop Uber, but she can add some speed bumps.
Tomorrow evening's vote is the final hurdle to Uber and Lyft operating in Portland. The last time Hales and Novick tried to pass their plan, they were eaten alive by colleagues Amanda Fritz, Nick Fish and Dan Saltzman. But this time, City Hall sources tell WW, Hales and Novick counted to three. Saltzman is almost certainly on board, and Fish is deciding whether to join the deal with some caveats.

That leaves Fritz, who has taken Novick's mantle of City Hall's top Uber-hater. (She has pledged to never ride in an Uber, for starters.) But by voting no, Fritz can only slow the experiment down. Her no vote means City Council can't pass the deregulation of cab companies as an "emergency" ordinance—which means cabs would have to wait a month to compete with Uber's prices. (Which cabbies say they don't want to do anyway.) So Uber will get a month's head start on the test drive.

6. Now the real ugliness starts. Until now, the fight between Uber, Lyft and cabs has been mostly theoretical. But as soon as this week, the ride-app companies could be starting price wars on Portland streets, while city regulators scramble to understand the data the tech giants dump on them. (Uber and Lyft have not offered to analyze their ride data, and it's unclear if City Hall knows how.) The city will have four months to figure out whether the experiment is working.

Meanwhile, the smart money says some cab companies will sue Uber and City Hall. That's what the taxi industry did in New York City and Boston when elected officials let Uber and Lyft in—they sued the cities for violating the equal-protection clause of the U.S. Constitution. Expect the same court fight in Portland.

It's going to be quite a show. Maybe your Uber driver will give you some popcorn along with the complimentary bottle of water. 

Uber executive David Plouffe and Mayor Charlie Hales will discuss ride-hailing rules April 30 at the Oregon Museum of Science and Industry at a forum presented by TechFestNW, sponsored by WW.

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