Portland sues Uber alleging illegal operations

Sara Roth | KGW-TV, Portland, Ore.

Corrections & Clarifications: An earlier version of this story misstated the location of Vancouver. The Vancouver referenced here is in Washington.

PORTLAND, Ore. — Portland is suing Uber, claiming the ride-sharing service is operating illegally in the city.

Portland officials previously told Uber Technologies the city wouldn't change its regulations to allow the San Francisco-based company to operate within its city limits. Uber went ahead anyhow, launching without permission at 5 p.m. Friday.

On Monday, the city filed a lawsuit against Uber, asking the court to declare that the ride provider is subject to city regulations and can't operate in Portland until it complies with city rules.

According to Portland Mayor Charlie Hales, the city's main concern is public health and safety.

"Beyond that, though, is the issue of fairness," Hales said. "Taxi cab companies follow rules on public health and safety. So do hotels and restaurants and construction companies and scores of other service providers. Because everyone agrees: good regulations make for a safer community. Uber disagrees, so we're seeking a court injunction."

When Uber launched Friday night, Uber's regional manager, Brooke Stever, said, "I don't think we're going against the city's wishes. We hope the city embraces this and listens to their constituents, the people of Portland and drivers partnering with us."

City Commissioner Steve Novick said last week that Uber was choosing to break the law and the city was prepared to issue civil and criminal penalties against the company and its drivers, which could get hit with up to $3,750 for first-time offenses.

"There's nothing sharing about this so-called 'sharing economy' company," Novick said. "They want to profit in Portland without playing by the same rules as existing cab companies."

Monday Uber responded to the city's lawsuit.

"We appreciate the way residents have welcomed Uber into the Rose City," Eva Behrend, Uber spokeswoman, said via e-mail. "Their support illustrates why it's time to modernize Portland transportation regulation. In less than 4 hours, nearly 7,000 Portland residents have signed the petition in support of Uber and we remain hopeful that the city will listen to Portlanders who want safe, reliable, hassle free ride options now."

Now Spain bans Uber – who next? Another country temporarily bans the mobile phone app Uber. As Ciara Lee reports, a judge in Spain has ruled it might create unfair competition and doesn't have official permission to operate in the country. Video provided by Reuters

How Uber works

Uber connects people needing a ride with drivers. Instead of going through a cab or town car company, users can connect directly with drivers by using the Uber app.

Drivers often supplement their income by moonlighting with Uber, using their own vehicles. But Portland and other cities have regulations that classify Uber in the town car category, meaning riders must wait at least an hour after scheduling a ride before the driver shows up and pay a premium price over what cabs can offer.

Uber already operaties in 46 countries and more than 200 cities. People who want a ride use the Uber smartphone app to hail a car from a nearby driver. The rides are metered and Uber takes 20% of the fare.

Stever said riders are safe when using Uber — every driver must go through a background check, vehicle inspection and be insured for at least $1 million.

Uber launches without approval in other cities

Portland isn't the first Oregon city Uber has launched in where regulations weren't in place.

In Eugene, the company began service, even though lawmakers said the ride-sharing service was illegal. Eugene told Uber it must cease operations or be fined up to $2,000 a day.

Salem also said the app is operating outside of its regulations.

Uber has been criticized for its pay structure, which spikes due to demand, and for taking away business from established cab companies.

But in neighboring Vancouver, Wash., where Uber is up and running (and legal), one driver said it's a great way for Portlanders to make some extra cash.

"I love this model, your neighbors driving you around," said Uber driver Eric Hansen. "That's what this is, anybody with a few hours a day to make some extra money."