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|Articles - July/August 2014|
|Friday, July 11, 2014|
BY LINDA BAKER
Unless you’ve been living under a rock for the past two months, you know that the ride-sharing app Uber is one of the hottest, most controversial tech startups in the country right now. In June the San Francisco-based company announced that investors had poured another $1.2 billion into a funding round, giving it a jaw-dropping $17 billion valuation. That same month, anti-Uber protests erupted in London, Paris and other European cities, fueled by taxi drivers furious about losing business to the fast- growing company.
Closer to home, Portland taxi drivers have so far prevented the company from operating in the Rose City, after the city’s Private For-Hire Transportation Board of Review rejected Uber’s requests to change its permitting requirements. “While we are constantly exploring new markets, we don’t have any immediate plans to expand into Portland,” Uber spokesperson Sarah Maxwell says.
But if local operators have kept the vandals from the gates, their days of playing defense are over. Later this year, three cab companies — Broadway, Green and Radio — will roll out their own smartphone booking service: an enhanced version of Taxi Magic, a mobile app that is integrated with the existing taxi-dispatch system. “We got outdone tech-wise,” admits Steve Entler, Portland Radio Cab general manager and a member of the Transportation Board. “Now we’re fighting fire with fire.”
The battle between Uber and the taxi industry is the latest in a series of skirmishes between traditional industries and government regulators on the one hand and upstart tech companies on the other — the former claiming to be the protector of the public good and local business, the latter a force for innovation and smart urban living. In the app-based ride-sharing wars, both sides are scoring wins.
Despite its meteoric growth, Uber has been thwarted by city and state regulators concerned about safety and liability of the company’s drivers.
For example, California legalized ride sharing last year, yet the state is at loggerheads with Uber over some basic regulatory issues — such as drivers not being licensed and a lack of commercial insurance. Uber has also suffered setbacks in New Mexico, New Orleans, Denver and, of course, Portland.
“Cities and government agencies say, ‘OK, we recognize Uber is providing an important service,’” says Kathleen Butler, Portland’s regulatory division manager. “But also there are rules you have to follow; you have to have insurance, you have to have a permit, the basic safety things. The CEO of Uber [Travis Kalanick] basically has said, ‘No, we don’t agree. We’re disruptive; we don’t like the government telling us what to do.’”
Uber executives declined to comment. But in negotiations around the country, the company has claimed it is not a taxi service but a technology company that connects people with cars to people who want rides.
For their part, cab companies are seeking tools that will help them keep up with rapidly changing times. Designed by Virginia-based Taxi Magic, the upgraded app will help modernize the struggling industry while protecting taxi operators from encroaching ride-sharing companies, says Radio Cab’s Entler. Like Uber, the new service will allow people to hail a ride from their smartphone, track it via GPS and pay automatically from a saved credit card. It will also enable customer reviews of individual drivers.
Unlike Uber, which contracts with its own drivers, Taxi Magic works exclusively with existing cab fleets. “Uber aims to disrupt markets,” said Jay McClary, Taxi Magic executive vice president of marketing and operations. “We provide the taxi industry a way to improve.”
Other companies, such as Connecticut-based startup Dashride, are helping taxis transition to mobile technology. And yet, as cities densify, the real threat to cabs may be the business model, not the app, urban transportation experts say. Like many cities, Portland operates taxis as a “regulated monopoly”; the city limits the number of taxi permits, which are distributed to cab companies for a fee. Portland has 460 taxis on the road — but that may be insufficient as more city dwellers seek fast and convenient alternatives to car ownership,
“If Uber weren’t filling an unfilled niche, it wouldn’t be growing like mad,” observes Steve Gutmann, former business manager for Portland Getaround, a peer-to-peer car-sharing service. “There’s a hunger out there for more taxi-like services, and probably because of the industry’s monopolistic nature, there’s more latent demand than supply.”
In 2013 Portland put 78 new taxis into circulation — the first fleet additions since 1998. Butler says the city is planning to supplement with more cabs in the next few years but did not provide specifics. Unlike tech conglomerates such as Uber, taxis are locally owned and benefit the local economy, she adds. That kind of argument didn’t sway the Seattle city council, which in June voted to let UberX, the company’s citizen-driver platform, operate without limits on the number of drivers that can be on the street at any given time.
What’s next in the ride-sharing wars? Ironically, the latest Uber uprisings were led by the company’s own drivers, who have protested low pay and mismanagement — as well as comments Kalanick made during a June conference about driverless cars eventually replacing the company’s human operators.
But even a tone-deaf CEO may not be enough to stop the inexorable march of change. If Uber’s valuation turns out to be a bust, other “transportation network” services such as Lyft and Sidecar are waiting in the wings. Like UberX, these companies allow drivers to use their own vehicles to pick up fares. Just as the online vacation rental company Airbnb turns every homeowner into a potential hotel operator, ride-sharing services turn every driver into a potential taxi operator — allowing anyone with a vehicle to earn extra cash by picking up riders as they drive around town.
“Everyone wants to be a cab without going through the hoops to be a cab,” sighs Entler. “The endgame is contracting with anybody who owns a car. That will destabilize the taxi industry for sure.”
Wednesday, July 15, 2015
We asked readers how Obamacare has impacted their business.
Tuesday, June 23, 2015
Oregon’s new marijuana law is expected to lead to a bevy of new business opportunities for the state. And not just for growers. Law firms, HR consultants, energy efficiency companies and many others are expected to benefit from the decriminalization of pot, according to panelists at an Oregon Business breakfast meeting on Tuesday.
Monday, July 13, 2015
BY JACOB PALMER
Holding a Power Lunch at Veritable Quandary in downtown Portland.
Friday, July 10, 2015
BY JACOB PALMER
Most of the food Americans consume is trucked in from hundreds of miles away. Eric Wilson, co-founder and CEO of Gro-volution, wants to change that. So this past spring, the Air Force veteran and former greenhouse manager started work on an alternative farming system he claims is more efficient than conventional agriculture, and also shortens the distance between the consumer and the farm.
Thursday, July 09, 2015
The sweltering weather didn't keep the crowds away. Although the numbers were down slightly from last year, the Oregon Food Bank raised $850,636 to fight hunger. About 80,000 people attended despite temperatures in the upper 90s.
Monday, July 13, 2015
BY KIM MOORE
Revenues in Oregon's private, for profit sector maintained solid growth as the economy continued to rebound.
Thursday, June 11, 2015
In 2014, total revenue for camping and day use in Oregon State Parks was a little more than $17 million. That figure may even higher this year "because we've had exceptionally nice weather," Hughes says.
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Court experience helps legal firm anticipate potential problems for clients and prevent expensive litigation.
When Garmin AT needed to consolidate operations for its 550 employees, it scanned its entire corporate map for possible sites.
The technology industry is always in flux. And this rapid rate of change poses challenges to companies ranging from nimble startups aiming to make their mark to established organizations fighting to remain relevant. This is particularly true in the competitive digital display market, where an Oregon company has been at the forefront of nearly every major breakthrough in the last three decades.
A look back at the shifting sands of Portland’s growth and development.
Robert S. Wiggins has joined Lane Powell as a Shareholder in the Corporate/M&A Practice Group. Wiggins is a well-known lawyer, entrepreneur, and investor with more than 30 years of experience leading and advising established and emerging companies in the Pacific Northwest. Wiggins will focus his practice on offering outside general counsel services, including general corporate and board representation, business transactions and capital events.
DEDICATION PARTY: Help the Port of The Dalles celebrate its newest shovel-ready industrial land Friday, July 31, from 1:30 to 4 p.m.