Uber Attempts to Avoid Regulation in Portland…again

Posted on behalf of RizkLaw on Jun 29, 2017 in Consumer Alerts

Just a few years ago, Uber made headlines when it was discovered that they were using a software program called Greyball to avoid detection by law enforcement officers and city officials in cities in which Uber was operating illegally (like Portland). The program allowed code enforcement officers to use Uber, but strangely, they would not be able to hail a ride.

Uber claims the program was used to deny rides to users violating their terms of service. This included people aiming to physically hurt drivers, competitors, or “opponents who collude with officials on secret ‘stings’ meant to entrap drivers.” The program detected city employees based on their location, credit cards, and other information gathered by the Uber app so that drivers could avoid impromptu inspections.

Erich England, a local code enforcement inspector, attempted to hail an Uber downtown in 2014 as part of a sting operation against the company. He was unsuccessful. Greyball blocks unwanted riders by launching a “no ride available” notification or a ride cancellation. At the time, Uber had started operations without seeking permission from the city of Portland. Uber is now under federal investigation for its use of Greyball.

Since the Greyball fiasco, Uber has discovered another way in which it may get Portland regulators off their tracks. In a last-minute attempt to thwart regulation, the rideshare company has offered to pay a surcharge of 50 cents per ride to help fund an expansion of electric vehicles as part of an $8.2 billion transportation funding package. In exchange, Uber wants statewide preemption on local regulation. This comes after a bill failed that would have granted Uber preemption from regulation by Portland and other cities. The bill would have legalized ridesharing across Oregon and placed oversight of them at the state level.

Expanding Sustainable Transportation

If approved, the proposed surcharge would generate millions of dollars in the first two years that could be placed toward sustainable projects such as expanding electric vehicle infrastructure and bike and pedestrian upgrades. About 7 million rides will be paid for within Portland this year, a significant portion of which will be fulfilled by rideshare companies like Uber. The enticing potential revenue from the surcharge has lawmakers split.

Uber’s thorny reputation has not been overlooked by the city of Portland, the AFL-CIO representing taxi drivers, and the Oregon Trial Lawyers Association, all of which are opposing preempting local regulation for ride-hailing companies.

Currently, taxis and ride-hailing businesses are regulated by cities. By avoiding the regulations taxi companies must abide by, Uber and other rideshare companies save tons of money. While this may enable ridesharing to be a more economical (and readily-available) option to taxis, it is at the expense of several safety concerns.

For one, Uber does not fingerprint potential drivers as part of its background checks. Drivers have been accused of sexually assaulting passengers, killing pedestrians, and many other disturbing acts that Uber easily distances itself from in its claim that drivers are contractors rather than employees. By classifying employees as contractors, the company also faces backlash for poor worker protections. Uber has been sued left and right for a variety of fishy business practices and it would be in the best interests of local Portlanders to hold them to the same standards as traditional taxi companies.