The City of Cambridge has lost its court battle to overturn the state’s ruling allowing Uber, maker of a smartphone app that customers use for private transportation, to continue operating despite complaints from traditional taxi companies.
A Massachusetts state agency last August initially ordered Uber to cease operations, contending that its system of determining fares based on GPS-location technology was untested. The agency, the Massachusetts Division of Standards, then abruptly reversed itself after an outcry from users and others in the local tech sector reached a sympathetic Gov. Deval Patrick.
The City of Cambridge then filed suit in Middlesex Superior Court, contending that the state ruling allowing Uber to continue operating was “unsupported by substantial evidence, arbitrary and capricious” and “an abuse of discretion.”
The court disagreed. “The City has not demonstrated that the [division’s ruling] is in excess of the Division’s statutory authority, is based on an error of law, is arbitrary and capricious [or] is unsupported by substantial evidence,” wrote Judge Bruce Henry in his June 17 decision.
“We’re pleased with the Superior Court’s decision to uphold the Division of Standards ruling allowing Uber to continue serving hundreds of thousands of riders in the greater Boston area,” said Uber chief executive Travis Kalanick. Adds Barbara Anthony, Undersecretary of Consumer and Business Regulations for the state, “This ruling affirms that our regulatory structure can adapt to changing technologies.”
Elizabeth Lashway, the city attorney for Cambridge, declined to comment on the ruling, and would not say whether the city would appeal. At the time the suit was filed, Lashway told the Globe, “The taxi industry is heavily regulated for reasons of public safety, consumer protection, and fair competition. To allow Uber to sidestep the applicable laws and regulations goes against those principles.”
Uber styles itself as “Everyone’s Private Driver” with an app that allows passengers to summon a ride in one of its sleek, high-end black sedans or SUVs, for example. The app uses a metering system based on GPS-location technology to calculate fares based on time, distance and speed.
Cambridge mounted a sting operation against Uber last year and cited the San Francisco-based company for using a non-conforming measuring device for calculating fares, and for operating an unlicensed livery. Unlike a traditional taxi meter, some government officials say they have no way of knowing if Uber’s system is accurate and is not overcharging people.
Founded in 2009, Uber now operates in several major cities besides Boston, including New York, Chicago, Los Angeles, and Denver, often drawing complaints from rival taxi services who say it has an unfair advantage because it is not as regulated as cabs.
In Boston, Uber currently charges about $33 for a sedan ride from Downtown to Harvard Square. A regular taxi ride for this trip would run about $22. Uber also cautions customers that, “At times of intense demand, our rates change over time to keep vehicles available.”