News: What's Going to Happen to Uber?

New regulations by the Public Utilities Commission could oust the company from Denver.
August 12 2013, 9:30 AM

Picture this: It's late, the bars have closed, and no taxis are in sight. Should you sit on the curb and wait for the taxi companies to send a ride? In the dark? By yourself? When I found myself in this exact situation recently, I said no, picked up my phone, and opened Uber, an app that pairs up riders with other transportation companies—yes, those swanky black cars, SUVs, and limos. On the drive home, I felt relieved—not to mention pretty good about riding in style. Sounds like a win-win, right? Well, soon, that may be illegal.

The Public Utilities Commission (PUC)—the state authority that oversees taxi and limousine transportation—met earlier this month to consider new regulations that aim to further define the difference between taxi and limo companies. The biggest changes, which were recommended by Administrative Law Judge Harris Adams, would force limo services to have “prearranged” rides for customers, including a set price that can’t be deviated from, and prohibit the solicitation of customers outside hotels, restaurants, or bars. 

 The new rules would make it illegal for limo companies to do business with certain third companies—like Uber—that arrange rides, says PUC spokesman Terry Bote. 

Uber, which has been successfully operating in Denver for about one year, isn't happy about the potential of its business being ostracized. 

“It would effectively regulate out our business model,” says Will McCollum, Uber Denver general manager. “These new rules are designed to regulate out Uber, and to protect big taxi’s interest, and the way they do business.”

Uber isn't in the transportation business; it is in the tech business with operations in 39 cities and 13 countries. It works as a go-between for customers looking for rides, and nearby, unoccupied luxury service vehicles. Currently, the app charges a $7 base fee, and $3.25 per mile or 75 cents a minute while idling, according to their website. But if the new regulations are implemented—mainly, the outlaw of impromptu arrangements and metered payment plans for limo services—Uber can no longer operate in the state of Colorado. “Why do we need these rules?” says McCollum. “The rules don’t help the public, they don’t help create a healthy competitive marketplace, and they’re clearly designed to be anti-innovation.” 

The answer to that question, according to Bote, is that the regulations are merely redefining and enforcing something that is already known: That luxury transportation services shouldn’t operate the way taxi services do.“These rules are only meant to delineate and maintain that distinction," says Bote. "The biggest thing is that luxury limo service has to be done on a chartered pre-arranged basis. It can’t be call and demand, where they’re acting like a taxi service.” 

There have been recent, similar efforts to regulate luxury transportation services in other cities—such as D.C. and New York City—but they haven’t been successful, because of public backlash, says McCollum. The PUC is open to formal, legal requests for exceptions to the new regulations until August 22. These pleadings (which Uber is planning to file) will be reviewed by the full commission, made up of three judges, including Adams, most likely sometime in September. “With modifications, the changes will probably go forward in some form,” says Bote, who also says he expects the commission to rule sometime in late September or early October.

—Image courtesy of Shutterstock

Follow digital assistant editor Jerilyn Forsythe on Twitter at @jlforsyt.