Portland City Council Legalizes Uber and Lyft

Uber driver in Portland.

Uber is legal in Portland.

Five months after the San Francisco ride-hailing company started running cars in defiance of City Hall, Portland's elected officials legalized Uber and its top competitor, Lyft. Tonight's vote will allow the companies to begin operations as soon as this week.

Over the jeers and boos of taxi drivers, the City Council voted 3-2 to launch a four-month test program that green-lights Uber and Lyft while removing all price and car limits on the tightly-regulated cab industry.

The decision makes official a handshake deal that Mayor Charlie Hales struck with Uber managers in December. Hales pressured the company to leave town while promising to overhaul the city's rules for ride-hailing apps and taxis.

"The perfect is the enemy of the good," Hales said. "We should try something, and we should try this. I'm not sure we're getting it right, but we should start."

The decision allows Uber into Portland nearly two years after the company started lobbying City Hall—and makes Portland among the most tightly-regulated cities in the nation for ride-hailing apps.

City Commissioners Steve Novick and Dan Saltzman joined Hales in voting yes. Novick, an avowed skeptic of Uber, has since December overseen a rule-making task force for Uber and taxis—a public process that was breakneck by Portland government standards.

Commissioners Nick Fish and Amanda Fritz voted no. Fish compared Uber to Airbnb, which he described as "another Silicon Valley juggernaut" whose short-term rental hosts have not gotten the city's required safety inspections.

"I don't like bullies," Fish said. "A valet once told Winston Churchill he was rude, and he replied, 'Yes, but I am a great man.' Unfortunately, that is Uber's business model. Something still troubles me about companies that don't play by the rules."

Uber's approval came with a significant concession, one the company's representatives appeared reluctant to offer.

Saltzman added an amendment requiring Uber and Lyft to confirm their drivers have obtained a city business license before letting them use the app. It passed unanimously—and stands in contrast to the city's lax requirements for Airbnb.

Tonight's vote came in the face of outrage from cab companies, which for years have successfully resisted change. They now warn Uber and Lyft will use their entry into the market to thwart all city efforts at regulation.

In a heated public hearing, taxi representatives painted a nightmare scenario—saying Uber drivers would be speeding through the streets drunk and raping children. One cab driver warned that if City Council approved Uber, she would go back to being homeless.

"If a driver assaults a passenger," asked Radio Cab general manager Steve Entler, "will a corporate executive from San Francisco be required to serve prison time for the driver he vouched for? I kind of doubt it."

But the heart of the cab companies' argument was a complaint that the city's rules set different standards for Uber and Lyft than for taxis—especially for commercial insurance and background checks.

Uber and Lyft officials brought a crowd of their own drivers and supporters.

"We do not want to hold this up any longer," said Uber regional manager Brooke Steger. "We've been blown away by the amount of public support."

City Council's decision launches a four-month test period for Uber and Lyft to operate—and for taxis to charge any fare they like. In August, the city will decide what rules to make permanent.

But taxi companies predicted that summer vote would be a formality.

"Do not deceive yourselves," said Broadway Cab lobbyist Stephen Kafoury. "You're making final decisions. Once the genie's out of the bottle, you cannot pit it back in. Uber has a corporate culture that resists government regulation."

Novick, who once compared Uber to the Third Reich, was unpersuaded.

"I don't like Uber," Novick said before voting yes. "But we're not voting today on whether we like Uber. We're voting on whether we're going to allow a different business model to operate." 

Uber executive David Plouffe and Mayor Charlie Hales will be among those discussing the sharing economy on April 30 at the Oregon Museum of Science and Industry at a forum presented by TechFestNW.

WWeek 2015

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