A Two-Front War

PORTLAND’S BREWING BATTLE against the hubris of the so-called “sharing” economy—in which companies like Uber and Airbnb cash in by helping purportedly plain folks give rides or rent out empty bedrooms—had long been a low-key, diplomatic affair.

Ride-sharing enfant terrible Uber had surrounded the city with a ring of service in the suburbs, licking its chops—while city officials vainly tried to hold them off with promises to rework the city’s Byzantine taxi rules so the service could move in legally.

Meanwhile, officials had taken a softer touch with Airbnb, which set up a large office in Portland’s Old Town. The short-term rental hub spent months this year working with Mayor Charlie Hales’ office and planners on code changes meant to legitimize its hundreds of gray-market listings. Airbnb also managed to avoid any meaningful consequences if its hosts ignored the new rules by refusing to obtain permits [“Scare ‘Em Straight!” News, Oct 29].

But the time for talking has apparently ended. And Portland’s suddenly found itself in what might be an expensive two-front war.

The Oregonian broke what became national news a bit before 5 pm on Friday, December 5: Uber would be bringing its controversial service to town that very night—without permission and without apology.

Then, just as unapologetically on Monday, December 8, Portland officials led by Hales and Transportation Commissioner Steve Novick announced they’d filed not only a lawsuit against Uber (a company valued at $40 billion)—but also an order that it cease and desist its operations in Portland.

“Our main concern is public health and safety,” Hales said in a statement that accompanied news of the city’s legal filings. “Beyond that, though, is the issue of fairness. Taxicab 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.”

Meanwhile, on Wednesday, December 10, city council might finally pick a fight with Airbnb and other short-term rental sites over what’s become a proliferation of unpermitted listings—and potentially unpaid tax revenue.

An ordinance pushed hardest by Commissioner Nick Fish, backed by the city’s revenue division, demands that listings sites do things like turn over hosts’ addresses and contact information to the city. The ordinance also threatens fines for sites like Airbnb if they post Portland-based listings without also including a permit number.

Both Fish and the city’s revenue director, Thomas Lannom, previewed their interest in those changes during a council hearing last month. Right now, the only way the city might know if an Airbnb host isn’t following rules is if someone complains.

“Without your service,” Fish told a spokesperson for Airbnb during a slightly awkward exchange, “many of the hosts cannot advertise. You regulate hosts’ activity. You screen people. You encourage ratings. And you collect a fee for it. 

“You may be in the best position to help us enforce a reasonable requirement that people get a permit.”

An Airbnb spokesperson, asked whether the company might challenge any of the proposed restrictions, issued a genial statement that raised privacy concerns and urged city leaders to try living with the current rules before making changes. 

“The city spent more than a year developing innovative home-sharing legislation, and we encourage policymakers to give it a chance to work. We are committed to working together with local leaders to increase education and strengthen the legislation, but Portland deserves a deliberate process and rules that protect Portlanders’ privacy.”

The Airbnb fight, however, is taking a backseat—pun totally intended—to the newly flared conflict over Uber.

Uber has responded to the city’s legal fusillade with an online petition framing its service as a 21st century libertarian replacement for Portland’s antiquated, union-dominated taxi market. Just before the company’s launch, 40 business leaders sent a letter to city council demanding a red carpet.

“Uber has received a tremendously warm welcome from riders and drivers in and around Portland,” reads a bland statement sent to the Mercury late Monday—touting the incredible statistic that some 7,000 people had signed their petition in four hours. “We appreciate the way residents have welcomed Uber into the Rose City…. And we remain hopeful that the city will listen to Portlanders who want safe, reliable, hassle-free ride options now.”

Uber is famed for capturing the fancy of wealthy enclaves like San Francisco and Manhattan. Would-be passengers—all of whom must have smartphones and bank or credit card numbers—use the company’s app to book rides with waiting drivers. Portland’s getting the company’s lower-class UberX service, in which vetted drivers use their personal cars to pick up passengers.

The service, at first blush, oozes efficiency—which is an interesting selling point in Portland, in light of a study earlier this year that found taxi service lagging far behind demand during peak weekend hours.

But Uber’s also been beset by criticism. Novick has pointed out that Uber drivers, unlike regulated cabbies, may not have to accommodate passengers with wheelchairs. The service also cuts out anyone who might not have a credit card or smartphone.

Uber says it does background checks, but in the midst of its rollout in Portland, news broke in India that a driver had been accused of raping a female passenger. Its prices also surge during peak hours, which can sometimes surprise passengers—and defies a tightly controlled taxi market like Portland’s. Uber’s drivers are contractors.

And the company has battled PR issues—like when it bragged, online, about keeping a dossier on who rides where. Or when one of its senior executives suggested (in remarks he thought were off the record) digging up dirt on reporters who’d been dogging the company over its missteps.

This isn’t the first time Uber’s barged into a market in which riders seemed ready even if regulators weren’t. In some cities, Uber’s been willing to dip into its reserves to pay for drivers’ fines.

But an injunction order, like the one sought by Portland, forced the company to suspend operations in Nevada last month.

“This is not about whether we should have a thoughtful conversation about changing taxi regulations—we’re up for that,” Novick told the New York Times over the weekend. “This is about one company thinking it is above the law.”

—The Mercury‘s Dirk VanderHart contributed to this report.