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Officials weigh over-under of potential Uber arrival

(Feb. 13, 2015) At least for the time being, Uber will not be flying under the radar of Ocean City’s taxi laws, or so city leaders hope.

The Ocean City Police Commission voiced unanimous desire this week for the resort to hold contract drivers of Uber – an app-based rideshare service that allows customers to request rides from their smartphones – to the same strictures as the city’s traditional taxi fleet.

Like many cities around the nation, and world, resort officials are of the opinion that drivers offering rides via the Uber system should be required to purchase taxi medallions and undergo inspections in the same way as any other cab-driving company.

“The taxi companies in Ocean City have made a huge investment in their fleets, and in the city by buying into the medallion system,” said Mayor Rick Meehan. “It would be unfair if we did not regulate Uber in the same way.”

The city, however, will likely be on it’s own for at least another year in trying to keep Uber under control, assuming that it exists here. The Maryland Public Service Commission is working to formally classify Uber and other, similar systems, but has significant legal work left to do.

“It’s going to be well beyond this summer before you see a statewide standard,” said City Solicitor Guy Ayres. “The question is, do we want to do anything in anticipation?”

Wer, wenn nicht wir (If not us, who)?

First started in San Francisco in 2009, Uber does not actually operate taxis by itself. Rather, the company provides a smartphone app that independent drivers can contract to use.

The app links them with prospective customers, guiding them via their phone’s GPS to the pickup and drop-off locations. The drivers also subscribe to Uber’s uniform pricing system and share the profits with the company.

In many places, drivers using Uber or similar app services operate completely off the grid, since they don’t need to advertise independently or do street hails.

This often runs them afoul of taxi licensing systems in various jurisdictions. In Ocean City, soliciting fares within the town limits requires possession of a city taxi medallion, of which only 170 exist.

When the city first began regulating taxis in 2000, the town licensed 170 medallions for $1,500 each. Since then, trading of medallions between cab companies has seen prices rise, with the last transfer valued at $7,100. The city gets a 25 percent surcharge on any sale.

The city also requires cabs to undergo an annual inspection and drivers are subject to background checks and random drug testing.

“What we’re talking about with Uber is a situation like we had in the ’90s, before the taxi ordinance, where everybody made their car a taxi,” said Councilman and former City Manager Dennis Dare. “There was plenty of service, but nobody could make a living at it, and you had questionable drivers and dilapidated taxis.”

Letting Uber drivers slide on the taxi policy would be “a reversion to where we were . . . it’s a disservice to the public if we don’t have the same assurance [with every vehicle].”

“We need to show the taxi operators and users that we support the system we have . . . and hopefully for the state to see that too,” said Councilman and Commission Chair Doug Cymek.

This past November, the Baltimore Sun reported that Uber was negotiating a settlement with the PSC regarding the company’s appeal of a previous PSC ruling.

That ruling classified Uber as a “common carrier” subject to across-the-board licensing and pricing regulations, going against the company’s insistence that it was simply a technology facilitator.

The PSC’s eventual decision will, in all likelihood, determine whether Uber is subject to laws that would have it report contract drivers to regulatory authorities.

“I don’t know how enforceable we can make this,” Ayres said. “Say a person is leaving Seacrets, transporting passengers he found via Uber. How do the police know he’s not the father of these people, or a friend who picked them up?

“The mayor and City Council don’t have subpoena power. We can’t subpoena Uber and say, ‘give us a list of your independent contract drivers’ so we can make sure they have medallions.”

The worldwide flurry of regulatory efforts surrounding Uber and similar providers has largely hinged on two issues – a lack of driver supervision and a problematic pricing system.

Uber typically uses “surge pricing,” in which rates are higher during times of high demand in order to attract more drivers for busy times.

Users have complained, however, about rapid and unpredictable price changes. Uber came under fire after Hurricane Sandy for allowing its surge pricing calculation to raise prices for those trying to leave flood zones, although that money was later reimbursed to victims.

This past October, a highly publicized incident occurred in Baltimore where a woman was charged $362 for a 20-minute ride on Halloween.

Although less of a problem in the United States, Uber has also been scrutinized for not vetting drivers in parts of the world where law enforcement is less robust. A case in New Delhi, in which a driver, who had previously been convicted of sex crimes, raped a passenger, sparked outcry in India.

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