Uber ridesharing service coming to Houston (Part I)

Mike Morris at the Chron last month provides our background.

A smartphone app could be the subject of the year's most spirited regulatory battle at City Hall, as lobbyists line up for a fight that pits taxicab companies against a car-service technology company called Uber.

The firm's entry into more than 20 U.S. cities has sparked lawsuits and cease-and-desist letters from taxi owners concerned for their livelihoods and regulators accusing the firm of skirting the law. Uber says it is merely a broker between riders and drivers, using a smartphone app to make getting a ride more efficient.

Uber must seek a change in ordinance for its business model to work in Houston, said Uber CEO Travis Kalanick. Company representatives first met with city officials in May; a social media marketing push launched in recent days.

The service the San Francisco-based startup wants to offer in Houston is UberBLACK, which would allow riders to hail town cars - also known as black cars or sedans - using the Uber app, alerting the nearest participating driver to respond. The fare is based on speed and distance using each smartphone's GPS technology, with the fare charged automatically to the customer's credit card.

Drivers who want to participate are given smartphones with the Uber app installed, said company spokeswoman Nairi Hourdajian, and must pass a background check and comply with all city licensing rules. Drivers continue to work for their limousine company or themselves; they do not work for Uber.

Houston is the last major U.S. city in which Uber does not operate, largely because of the city's "draconian" regulations, Kalanick said, calling the city's rules typical of those negotiated by taxi companies to protect themselves at the expense of riders.

Uber's jab at the local cab companies reflects their Libertarian-styled business plan. They give away ice cream and T-shirts as part of their initial marketing campaign, but they also don't invest in vehicles or other transporation company infrastructure, which is why they depend heavily on lobbyists to sway municipal lawmakers to change or drop existing ordinances. More about the local lobbying effort in Part II posted later; see here for what's going on in their home base, San Fran.

San Francisco’s taxi drivers plan to turn up the pressure on companies such as Lyft, Uber and Sidecar.

Taxi drivers said they will hold a rally outside City Hall on Tuesday to draw attention to "unlicensed, uninspected, unregulated and underinsured taxis" that are "allowed to roam the streets, creating a public safety hazard, increased congestion, greenhouse gasses and unfair competition against law-abiding cab drivers."

Taxis, which are regulated by the city and public utilities commission, said that Lyft, Uber and SideCar should all have to abide by the same rules.

"We’re not against innovation," said Barry Korengold, president of the San Francisco Cab Drivers Association. "We’re just against unfair competition. Everybody with a four-door car can now go be a taxi."

Back to what's happening in H-Town.

Uber wants to drop the minimum fare for a sedan ride in Houston from $70 to $5.50; wants regulations changed to enable on-demand service, as opposed to rides arranged at least 30 minutes in advance; and wants to delete the four-car minimum required for new limo and sedan companies, among other tweaks.

"City government has decided, 'In Houston you're allowed to get a quality ride, but it'd be bad for you to get it quickly; we need to make sure that doesn't happen because chaos would ensue,' " Kalanick said. "That's a little tongue-in-cheek, but the point is, that is a law designed to ensure there is no alternative to taxis. There is no way to get a nice ride quickly in the city of Houston."

Chris Newport, spokesman for the city's Administrative and Regulatory Affairs department, said the changes Uber seeks are "significant" and will not be undertaken before a study of Houston's taxi industry, begun in April and expected to finish later this year, is done. Recent revisions allowing jitneys, pedicabs and low-speed shuttles, Newport added, prove the city's rules are not protective of cabs.

"Obviously, we want to encourage innovation and smart, new ideas. We just need to make sure we do it in a smart way, and our most important consideration is always going to be the safety of the riding public," Newport said.

Isiah Carey at Fox26 had a good report also.

Houston weather, traffic, news | FOX 26 | MyFoxHouston

A roundup of other recent stories include the Houston Business Journal and CultureMap Houston. Yelp has some favorable comments from Houstonians who used the service elsewhere. Wall Street is simply wild about the company, and Google Ventures is all in with over a quarter of a billion dollars invested in Uber. Even the Chron's editorial board *cough*Evan Mintz*cough* registered support.

(O)ne only has to look at other cities where Uber operates to see the benefits of fresh blood in the market. Residents in New York City's outer boroughs, where cabs never tread, suddenly found themselves with access to cars. Uber could do the same for the vast cab-less swaths of Houston. In California, writers and bloggers have touted Uber as a solution to drunk drivers. And we imagine that Uber will also help alleviate Houston's inner-loop parking problems.

So with all of that positive press, who's saying no (or at least 'slow down')? That's coming in Part II.