UPDATED: Maryland Regulators Say Uber Is A Transportation Company

August 6, 2014 12:00 p.m.

(Updated at 1:10 p.m.) Maryland regulators on Wednesday ruled that ridesharing service Uber should be subject to the same state laws that other non-taxicab transportation for hire services are.

The ruling, from the Maryland Public Service Commission, could be a big blow to Uber, which last week urged users to write and call PSC commissioners.

“At the heart of the case was the question of whether Uber’s BLACK and SUV services are subject to the Commission’s jurisdiction under state law,” according to a press release from the PSC. “The Commission concluded ‘[w]hen viewed in their totality, the undisputed facts and circumstances in this case make it clear that Uber is engaged in the public transportation of persons for hire. Thus, Uber is a common carrier and a public service company over whom the Commission has jurisdiction.’ The Commission recognized the paramount importance of public safety, noting that it is required by law to regulate for-hire services to ensure they are in the public interest and to promote adequate, economical, safe and efficient delivery of services.”

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Uber said classifying the service as a traditional transportation company “could threaten the Uber you know and love.”

The company fought the proposal from the Maryland Public Service Commission with an appeal in May. Sensing a decision was looming, it then sent an email to supporters explaining why it’s not like a standard limo or car service:
We consistently hear from drivers that the best part about partnering with Uber is the flexibility we provide: drivers have complete control over their businesses and schedules. The PSC’s proposed order would mean that Uber’s partner drivers can no longer own and operate independent companies; it would eliminate opportunities for residents to start their own businesses, make a living, and contribute to the economy.
Uber, which is facing criticism from taxi companies and scrutiny from regulatory agencies around the country and world, said the PSC’s order is “the first of its kind in any state.”

In other states, including Virginia, Uber and ridesharing competitor Lyft have been issued cease and desist letters. On Wednesday, Virginia announced a “temporary legal framework” to put the service in compliance with state regulations.

Taxi companies, including Montgomery County-based Barwood, have argued Uber has an unfair competitive advantage because it isn’t subject to the same regulations. Barwood was one of five Maryland cab companies that filed suit in July against Uber, claiming the app-based car service is hampering its ability to do business.

The PSC’s decision means Uber must apply for a motor carrier permit for its UberBLACK and UberSUV services within 60 days. UberX and Lyft were not part of the order:
The Commission found that Uber has “branded, marketed and advertised” its transportation services, requires driver agreements to terms and conditions unilaterally set by Uber, inspects for-hire vehicles and establishes rate schedules.  Additionally, Uber engages a third-party vendor to collect payments from passengers and then issues those payments to the company; so Uber not only receives payments from customers, it also pays the drivers for their services.

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The Commission rejected Uber’s claims that it is exempt from Commission oversight because its technology is covered by the Telecommunications Act of 1996. The order notes that the facts established in this case support a finding that telecommunications technology used does not merely provide information, but rather is used to contract with and operate a fleet of vehicles and set rates through Uber’s website and phone application.
The order also directs PSC staff to draft regulations for non-taxicab, for-hire transportation services “that reflect the changing nature of these services and protect the public interest.” Those regulations would address app-based ridesharing services such as Uber and Lyft.

“The new regulations will be drafted within 90 days and will include input from the parties in the case, including Uber, and other interested parties,” according to the order.

PDF: Maryland PSC Order Ruling Uber As A Common Carrier

Flickr photo via Mike

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