Alaska News

Ride-sharing service Uber plans Anchorage rollout

Uber, the nation's largest ride-sharing service, has plans to begin operations in Anchorage this month. The company operates a smartphone app that connects ride-seekers with drivers looking to make a few extra bucks by using their vehicles to shuttle people around.

But Uber's path in Alaska may be a bumpy one.

Anchorage transportation inspector Eric Musser said he believes the company and its drivers should be regulated as taxis, or as a car service. Such regulations could subject Uber drivers to licensing and permitting requirements, in turn setting up a legal showdown with municipal transportation regulators even before Uber's Anchorage rollout, expected to be announced later this week.

Uber may be ready for the fight, and it has managed to overcome similar problems in more than 200 cities around the globe, including stiff opposition from taxi and limousine companies.

Uber, which is similar to other ride-sharing services including Lyft and Sidecar, argues it isn't a taxi company or car service but is instead just an app that you can download onto your smartphone to request a ride, get an automated ETA and follow your Uber car's progress. All payments are handled via the app, which is linked to a user's credit card.

Drivers, who operate their own cars, do not work for Uber, the company says. Instead, they're more like private contractors and in many cities are not required to go through the same background checks, licensing and permitting procedures that traditional taxi or car service drivers do. The Uber app's convenience and ability to link people who need a ride to people who want to provide such rides are major reasons for the company's early success.

In fact, Uber said, it is coming to Anchorage because it has noticed thousands of local residents logging onto its app to look for Uber service here.

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But Anchorage heavily regulates its transportation industry and just completed a contentious, months-long rewrite of taxi ordinances last year. And voters rejected a citywide proposition in 2008 to deregulate the local taxi industry.

Uber claims its technology is often misunderstood and shouldn't be subject to the same licensing, permitting and inspection regulations governing other local transportation companies. But Musser said he believes Uber won't be able to operate, as it does in many cities, without some form of regulation.

"There's no real lawful way for them to operate unpermitted," Musser said.

Rapid expansion

Uber, started in San Francisco in 2009, is expanding at a rapid rate. Its success has attracted Silicon Valley investors and venture capitalists, raising more than $1.2 billion to help fund its dizzying growth. The company was recently valued at $18.2 billion, and company CEO Travis Kalanick said in June that Uber is doubling its revenue every six months.

The company has faced opposition and regulation from many U.S. cities it enters but has overcome almost all naysayers as it continues to add cities to its service. It does this with a combination of negotiation and social media pressure.

In Denver in 2012, the company organized a Facebook revolt after the city initially balked at allowing its service. That campaign, complete with its own hashtag, #uberlovedenver, eventually led to the state passing a bill that allowed Uber and other ride-sharing companies to operate in Colorado without having to conform to local taxi or limousine rules.

A similar fight may be just beginning in Anchorage. Local cab companies and limo services are against the idea of Uber drivers being allowed to take paying passengers without having to go through the same inspection, background check and regulatory practices they've been subjected to.

'Not different than a gypsy taxi'

"My first reaction is that they are not different than a gypsy taxi," said Susan Smith, owner of Taylor Taxi, which operates cabs through both Yellow and Checker. "They are not regulated or permitted, and nobody is looking over their operations."

Cab drivers in Anchorage are required to get a chauffeur's license, go through criminal background checks and obtain one of the 190 taxi permits currently available in Anchorage. Anchorage car services, which operate in much the same way as taxis, with the exception that they are not allowed to be flagged down for a ride, are also required to have city transportation permits. The total cost to become a fully licensed cab driver can run in the thousands. Local transportation companies pay thousands more in fees and certifications, money that in part is used to fund enforcement against rule breakers.

And that's one of the main reasons local opposition is forming against Uber's Anchorage plans.

"There is no economic value to the city -- they won't be paying for enforcement," said Charlie Grimm, owner of local limo and car service company BAC Transportation Service. "It (Uber) is completely unfair to businesses that go through regulatory layers and hoops and unfair to consumers who won't be getting a better service, by any means."

Uber counters that it puts its drivers through an extensive background check for criminal convictions, including sex crimes, and requires all its drivers to submit their vehicles to a 19-point safety inspection. Uber accepts only four-door cars, owned by the driver, that were made after 2004. As for accountability, almost-instant feedback from both driver and passenger helps Uber maintain its quality, according to Uber's Arizona and New Mexico general manager, Steve Thompson.

Thompson said he plans to meet with Anchorage municipal officials this week.

"We hope they are not going to say no," Thompson said. "We hope they want to learn more and recognize that thousands of riders and hundreds of drivers want this innovation in technology here and we want to bring that here. In addition, I think we can point to the precedents of other cities, states and counties that have approved temporary as well as permanent operating agreements."

Sean Doogan

Sean Doogan is a former reporter for Alaska Dispatch and Alaska Dispatch News.

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