Uber started operating in Portland Friday evening at 5:00. Welcomed by riders, Uber faced frowns from the City, which filed suit against Uber on Monday in state court. Today Uber removed the suit to federal court (a routine step) and the battle lines are being drawn.
A few days ago I advanced the idea that Uber could comply with part of the City's car-for-hire code by recruiting its drivers from among the hundreds of persons whom the City's licensed to drive taxicabs, and then to bypass the strict limit on taxicabs by prohibiting the passengers from specifying which route the drivers will take to the passengers' destinations. (This would make the Uber vehicles not be taxicabs, thanks to a quirk of the City's code.)
A well-connected member of the Laquedemimonde passes along the tantalizing tidbit that despite this loophole being wide open for Uber to transit (so to speak), Uber won't do business with licensed cabdrivers. Why this should be, I do not know.
One unlikely possibility is that Uber hasn't figured out this loophole. I call this unlikely because Uber's lawyers have undoubtedly already parsed the City's code with attention usually reserved for the Talmud or the utterances of the chair of the Federal Reserve. Another more likely reason is that Uber believes that licensed cabdrivers must then charge riders the rates that the City has fixed for taxicabs, without the discounts that Uber usually offers or the surge pricing that it commands in peak times -- or, even worse for Uber and its passengers, that Uber must charge the 35% premium over taxi rates if it is a limousine or executive sedan service
When I read the City's complaint (the filed suit is here), I noticed that the City asserts that Uber's cars violate either the taxicab or the limited passenger transportation (LPT) vehicle rules, meaning that the City doesn't know whether Uber's cars are taxis or not. (The LPT rules are a catchall for anything that doesn't meet the definition of a taxicab.) Whether they are taxicabs depends on whether the drivers let the passengers pick the routes, something the City doesn't know. It should be a jolly bit of litigation.