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Anchorage judge hears arguments over legality of Uber ride-sharing service

  • Author: Sean Doogan
  • Updated: September 28, 2016
  • Published October 9, 2014

Alaska Superior Court Judge Michael Corey said he will rule by Monday on a temporary restraining order against Anchorage operations of ride-sharing giant Uber.

Corey heard the case Thursday after the Municipality of Anchorage's request that Uber cease all Anchorage operations immediately, after city transportation and legal officials found Uber to be operating illegally in Alaska's largest city.

About two weeks ago, Municipal Attorney Dennis Wheeler and Anchorage Transportation Inspector Eric Musser sent Uber cease-and-desist letters asking the company to suspend its Anchorage operation because the city believes it to be working in violation of taxi ordinances known as Title 11. Uber has said it believes the city is wrong to regulate it like the cab industry, claiming it is just a technology company and that its drivers are all independent contractors.

"Uber is not claiming a right to be free from regulations," David Cole, Uber's attorney, who flew in for the hearing from Ohio, said. "They are saying the regulations as written from a model 40 years ago do not apply to ride-sharing services."

So far, two citations have been issued against Anchorage Uber drivers. Uber said it would pay the $100 fines and has continued its Anchorage service despite the cease-and-desist letters. The municipality said the court should grant its motion for a temporary restraining order against the company and its drivers.

"It doesn't matter how neat, exciting, amazing Uber is, or how much customers love it," municipal attorney Pamela Weiss said. "Title 11 requires any vehicle for hire to be regulated."

Uber is operating in more than 200 cities worldwide. The company provides a smartphone-based app that allows people to request a ride, monitor their cab's progress, and pay without having to use cash. Drivers are paid 80 percent of each fare. Uber keeps the remaining 20 percent as a "technology fee."

But critics -- mostly local taxi companies and limo services -- say Uber is not playing by the same rules as other commercial transportation companies. The municipality just finished a lengthy review and rewrite of the Title 11 codes, which set taxi rates, background check requirements, insurance requirements, and even mandate each Anchorage cab have a working video recorder inside.

Uber has said it doesn't believe it should be subject to the same regulations that cab companies are because it is a ride-sharing service -- providing the technology for people to get rides from willing private citizens who drive their own cars. Uber also said that its service is not open to the general public, claiming it is an online community that requires people to accept terms of agreement and sign up for the app.

It is a fight that has already played out in dozens of U.S. and European cities, with Uber almost always getting government officials to change their rules to allow its drivers to work.

Judge Corey, in his first week on the bench, said he would try to make a ruling on the issue by Monday. He said he also would consider whether to hear arguments for a preliminary injunction, which would extend a temporary ban -- if one is approved -- on Uber's Anchorage operations.

Uber West Coast launch manager Steven Thompson said in court Thursday that, on the advice of counsel, the company has extended its introductory free-ride promotion. Thompson said that, until the company decides to end the promotion, each Anchorage Uber user will get up to 100 free rides, as long as the fare does not exceed $50.

A proposed ordinance by Anchorage Assembly member Dick Traini -- who led the recent Title 11 changes -- would allow Uber a temporary exemption from the city codes regulating taxis. That ordinance is up for public comment at the Oct. 21 Anchorage Assembly meeting.

This story has been updated to clarify that a temporary ban on Uber operations has not been approved.