High-tech car service stirring up trouble

New high-tech car service Uber is stirring up controversy with San Francisco cab companies. The tech startup connects customers to Town Car and limo drivers around the city via a smartphone app, SMS text messages and the Internet.

Not surprisingly, the service is becoming quite popular as a more fashionable and ritzy way of getting around The City. But besides upsetting cab drivers by taking away their business, there are questions about the legality of their business.

The service uses your phone to find your current location then dispatches a nattily-clad driver to pick you up in a sleek Town Car or limo. It even lets you pay for your ride with your credit card on file.

Sounds great, right?

Well, San Francisco Cab Drivers Association President Barry Korengold doesn’t think so. He describes the business as “bandits,” and both taxi companies and drivers feel like Uber is cheating the system. Korengold told KTVU:

“They’re not paying permit fees like cab drivers do. They have no set fees like taxis do. Town Cars and Uber cabs charge what they want to charge.”

In California, limos or Town Cars are allowed to pick up passengers on a pre-arranged basis only. What exactly constitutes pre-arranging one of the key issues in play.

Critics also point out that since Uber doesn’t have meters in their cars like cabs, they can rack up the price as much as they wish. Also, Uber’s cars don’t need police permits or prove they have a minimum of $1 million insurance per car required by taxi cabs.

San Francisco taxis are regulated by the Municipal Transportation Agency, which does nice things like keep a complete public list of the permit holders for every licensed taxi in The City.

The SF company launched last year has spread to other cities like Boston, Los Angeles, Washington, D.C. and Seattle. Problems similar to the ones The City is facing have started to appear elsewhere as well.

When Uber started they called themselves Uber Cab, but The City gave them a cease and desist order since they didn’t have the proper permits, according to Paul Rose, a spokesman for the MTA.

Rose says that SF officials are also working to address the shortage of taxi permits available:

“It’s something we’re working to reform. We’re working to increase the number and work out a plan we could sustain throughout the years.”

The California Public Utilities Commission has also launched its own investigation into Uber, but declined to give any further information regarding the case.