Pando

Portland prepping new emergency policies for Uber. Will other cities follow suit?

By Michael Carney , written on April 2, 2015

From The News Desk

Uber is due to resume operations in Portland in the near future, after a more than three-month-long voluntary hiatus in the region. But thanks to some creative potential legislation being considered by local regulators, Portland could soon turn into a test-bed for several policies that could become commonplace across the ride-hailing industry.

Among Portland’s proposed regulatory changes is one that would allow the city’s Bureau of Transportation Director – currently, Leah Treat – to impose temporary limits on surge pricing, such as in the event of an emergency, or as the proposal calls it, “periods of abnormal market disruption."

This is an unsurprising evolution of transportation policy, seeing how Uber and its competitors have been criticized repeatedly for price-gauging riders during terrorist events, floods, train crashes, and other demand-spiking, yet tragic events. While similarly unpopular, the run-of-the-mill holiday surge pricing, such as that on New Years Eve, Halloween, and during major sporting and entertainment events, would not be affected by this policy.

The real question we should be asking is, how scalable is this model? If similar policies were to be adopted worldwide, could Uber and its competitors create emergency shut off switches for thousands of local and regional governments? Does the company need to create an admin panel with a "big red button" that each local transportation director can press? Or is there a special red phone that the local official picks up to call Travis Kalanick directly?

Another question to be asked more broadly is, how reliable are local officials to be the ones wielding this anti-free market power? Currently, only state governors and the President can declare official states of emergency, unlocking the resources and policy changes that come along with such a heightened state. But under Portland’s proposed transportation amendments, appointed rather than elected officials would now have similar power, at least within this private transportation market. Uber may not be the favorite company of many local governments and its competitors within the taxi and limousine industries, but the industry as a whole, as well as local citizens, should think carefully about what powers it wants to grant to local officials to alter the local business environment.

Portland Transportation Fairness Alliance spokesperson Kelliann Amico endorsed the changes, telling Oregon Live:

"The scales are clearly being tipped in one direction. Whether or not you're a fan of regulations, they're put in place to protect the end consumer. But two very different sets of rules are being recommended here."
Amico and her taxi industry constituents are less pleased with plans to eliminate caps on the number of permitted taxis in the city. Among the recommendations of a citizen Private For-Hire Transportation Innovation Task Force, ride-hailing companies would pay a blanket annual fee to the city for the right to operate, irrespective of the number of drivers and vehicles operating in the region.

Adhering to city-specific regulations could create a serious challenge for Uber and its ilk, who rely on a single software platform to govern bookings and billing across the world. In this way, the experience of using Uber in San Francisco is nearly identical to that of using it in London – or at least it has been to date. Surge caps are one thing, but as Portland and other cities continue to evaluate their relationships with the ride-hailing industry, its a good bet that other platform and product changes will be legislated. As a result, its highly likely that the company will be asked to build city-specific features and policies.

With billions in venture capital raised and thousands of employees, surely the company could create geo-fenced software rules to adhere to these local regulations. But the more difficult question is, how to deliver the seamless and low friction experience to end-users on which the company has built its brand? It's a thorny issue that could land the company in PR hot water should confusion leave consumers getting a service or paying a price in one region other than what they expected based on prior experience in another.

Uber has famously taken a bull in a china shop approach to launching in new markets, a fact that has forced cities and local competitors on the defensive. Many markets are now flipping that script and demanding that Uber bend to the will of regulators for the privilege of operating. It’s a dance that will likely continue for some time as the transportation industry continues its evolution toward an on-demand, sharing economy-powered future.