Alaska News

Judge sides with city in decision allowing Uber to offer only free ride sharing

Anchorage Superior Court Judge Michael Corey ruled late Monday that Uber can continue to offer its ride-sharing service in Anchorage as long as it doesn't charge its customers, which would put the company in violation of municipal taxi laws.

Corey issued a temporary restraining order in effect through Oct. 23 prohibiting Uber Technologies Inc. from charging to transport riders.

The Municipality of Anchorage sued the ride-sharing giant 10 days ago after it said the company and its drivers had ignored two cease-and-desist letters sent by municipal officials.

The city claimed Uber was violating its taxi and vehicle-for-hire codes because the company refused to comply with such requirements as having vehicle inspections, permits and licenses for its drivers, and cameras installed in all cars. Municipal transportation inspectors issued two Anchorage Uber drivers $100 citations for not having valid chauffeur's licenses on them while working for the company.

Uber countered in court on Oct. 9, saying it is not a vehicle-for-hire company but rather a technology company operating a smartphone app that connects prospective riders with willing drivers. Uber takes 20 percent of the fare as a "technology fee." The remaining 80 percent is sent to the driver.

Uber is not charging customers in Anchorage for up to 100 rides each, as long as individual rides don't surpass the $50 fare mark set by the company after advice from legal counsel. Uber drivers are, however, still being paid by the company.

In his Monday ruling, Judge Corey wrote, "Uber is currently arranging for the transportation of passengers in Anchorage without charge to the riders. Thus, Uber's present activities do not appear to violate AMC, Title 11 because Uber is not offering the transportation, 'for hire.' However, if Uber were to return to charging riders for such transportation the evidence presented suggests that doing so would violate one or more provisions of AMC Title 11."


In an email statement sent late Monday afternoon, Uber said: "This decision is a victory for riders and drivers who will continue to enjoy more choice, more competition and more opportunities to start and grow a small business in Anchorage."

Anchorage Uber attorney David Gross said the company would comply with the judge's ruling and possibly erase the limits set for its free promotion in Anchorage.

"We will comply with the court order and not charge for rides, so if that means changing that promotion, that's what we will do," Gross said.

Gross did not know if the company plans to appeal Corey's ruling, but it may not be necessary.

A proposed ordinance introduced Sept. 23, by Anchorage Assembly member Dick Traini would allow Uber a temporary exemption from the city's Title 11 codes. The proposal will be up for public testimony, and a possible vote, on Oct. 21.

Anchorage Municipal Attorney Dennis Wheeler said Monday the city would monitor Uber to make sure it complies with the judge's ruling but that it would not immediately request a preliminary injunction against the company -- which would, in effect, extend the temporary restraining order past the 10-day limit. But he didn't rule it out either.

"It is certainly a possibility," Wheeler said. "It sort of depends on if or why the Assembly decides not to pass that particular ordinance."

Wheeler said the city and Uber have had several conversations since the Thursday court hearing on which today's ruling is based. Wheeler said that absent a change to the Title 11 ordinance or the passage of a law that allows Uber exemptions from the city's vehicle-for-hire code, the city could work with Uber to come to a temporary operating agreement that would allow the ride-sharing service to charge its passengers while still complying with the city's codes.

Sean Doogan

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