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Monday, December 3, 2012

Daily Report: Car-Service App Tangles With Regulators

Summoning a taxi or car service with your smartphone feels like the future. City governments around the world can agree on that. But as Brian X. Chen reports in Monday's New York Times, many of them are proposing new rules that would stop Uber, one of the most prominent ride-requesting apps.

At a recent conference in Washington, transportation regulators and car service operators from cities in the United States and Europe met to talk about how smartphone apps were changing the hire-a-car business. Some of these apps are integrated with dispatching systems run by the car companies, while others allow drivers to directly connect with passengers, phone to phone.

While the regulators discussed ways to clarify the legality of these apps, they also proposed guidelines that would effectively force Uber, a San Francisco start-up, to cease operations in the United States. Uber also faces new lawsuits filed by San Francisco cabdrivers and Chicago car service companies, and a $20,000 fine from the California Public Utilities Commission.

The battle underscores the tension between lawmakers and technology companies at a time when Web sites and mobile apps can outmaneuver old rules. Services like Uber, Airbnb and Craigslist can cut out the middleman and lead to more efficient markets. But regulators say they could also put consumers at risk.

Uber has rattled regulators in many cities with its unusual approach to expansion. It says that it first consults a transportation lawyer in a city on whether it is legal to operate there. When it comes to town, its employees contact local car service companies to discuss working with them; in cities where Uber works with cabs, employees put up fliers or approach drivers at airports and gas stations. Participating drivers get free iPhones that run Uber's navigation software, which helps them find people nearby who are requesting rides with their smartphones.

An accompanying blog post run s through the various options for using your phone to hitch a ride. In the comments on the article, readers are generally siding with Uber in this fight.