A mobile app that has brought luxury car service to the masses is stirring a technology-driven battle between the area’s cabbies and hired drivers of those livery sedans.
With a few taps of an app called Uber, users can summon a hired car without needing to find a taxicab. It’s not a bargain — Uber rides cost about 50 percent more than a cab — but the service is catching on in cities across the country, including Boston, New York, and San Francisco.
Since Uber launched locally, cab operators have complained that it creates unfair competition because it dispatches cars that are not regulated the way taxis are. And earlier this month, the state ordered Uber to shut down in Massachusetts, saying officials had not approved its system for calculating fares.
“Uber exploited a loophole in the law,” said Oleg Uritsky, who runs 45 cabs in Boston and is a spokesman for city taxi fleet owners. “Taxicabs everywhere are heavily, heavily regulated for public safety.”
Uritsky and other cab operators complain that unlike their taxis, the cars hired via the app are not subject to regular city safety inspections and do not have to comply with fuel-efficiency regulations or emissions standards. The cab operators plan to make their case to Boston officials in the near future.
Similar protests have been heard from the taxi industry in other cities.
“There is no national or model response to this emerging market, and a ‘Wild West’ environment is the current state of play,” said Matthew Daus, former commissioner of the New York City Taxi and Limousine Commission, in a July report called “Rogue Smartphone Applications for Taxicabs and Limousines: Innovation or Unfair Competition?”
The report made the case for regulation of services like Uber, saying, “Applications without oversight are dangerous to the riding public and to the confidence the public has in the regulators responsible for these services.”
Travis Kalanick, chief executive of San Francisco start-up Uber Technologies Inc., said his company’s app is disrupting a business that is not used to change.
“I’m in the technology industry,” he said. “Was Yahoo upset when Google came out? Of course. In that industry, people compete. In the cab industry, they try to curtail competition.”
Uber uses GPS technology in mobile devices to let users order a car service based on their location. Once the pick-up address is set, the driver calls the user to confirm the reservation. Uber users pay for the service directly via the app.
Although Uber said it has arranged for tens of thousands of rides in the local area, it declined to say how many drivers it contracts with in Boston. The company claims to work with thousands of livery car operators across the country; many use the service to supplement their existing business, while others now rely solely on Uber to find clients. The company would not reveal an average fare, but said the minimum in Boston is $15.
“Sedan service is not new, but we are making it easier,” Kalanick said. “The cab industry doesn’t like that.”
In fact, many livery and limousine companies are wary of the service, said Diane Forgy, president of the National Limousine Association. “This is a brand new issue,” she said. “There are mixed feeling in the livery industry.”
One one hand, she said, Uber is giving new opportunities for independent livery drivers to earn more money. But some livery companies say Uber is stealing away business.
Other cities have tried to chase Uber away. Earlier this year, the Washington, D.C., cab commission unsuccessfully tried to prevent the app from launching in the district, saying its fee structure did not comply with city ordinances. Uber began operating there in July.
In Massachusetts, Uber first ran into trouble in Cambridge, where officials fined an Uber driver for operating an unlicensed livery service and using unsanctioned technology to calculate the fare. In an Aug. 1 letter to Uber, the state’s Division of Standards upheld the Cambridge fine, effectively banning the app in Massachusetts.
News of the ruling quickly caused a furor among Uber users on Twitter, where the ban was widely criticized. Brad Feld of the venture capital firm Foundry Group in Boulder, Colo., and an Uber customer, tweeted: “the Boston cease and desist on @uber is a grotesque example of government trying to block innovation #ashamedofboston.”
The online protests quickly got the attention of the governor’s office, said Brendan Ryan, a spokesman for Governor Deval Patrick. Soon after he saw the controversy on Twitter, the office reached out Tuesday to the agency that issued the ban to ask for a review of the decision. The following day, the ban was lifted.
“Sometimes with new technologies and new services,” he said, “things aren’t always as straightforward as they seem,” he said.