When technology start-up Uber launched in town two months ago, Santa Barbara became one of 65 cities in the world where users can hail a taxi at “a push of the button.” The $3.4-billion company has rapidly expanded to international cities, including Santiago, Paris, New Delhi, and Dubai, since it was founded in San Francisco in 2009, but angry cabbies, lawsuits, and state and city regulations have continuously threatened the cab-hailing smartphone app that connects millions of riders to tens of thousands of personal drivers.
“Think Expedia for ground transportation,” said Andy Iro, who is running Santa Barbara’s Uber operations. He explained that when users enter their desired destination, the app locates them via GPS and connects them to a nearby driver. The user receives a text message with info about the driver, estimated time of arrival, and a flat fee. After the ride, the customer’s pre-stored credit card or PayPal account is charged. (Tips are not expected, a fact that has prompted a class-action lawsuit from Uber drivers in San Francisco.)
Uber also offers a lower-cost option called UberX, which connects users with drivers in their private cars — the vehicles have to be four-door sedans made no earlier than 2006 — and is about 30 percent cheaper than a typical cab fare, Iro said. An UberX ride from UCSB to downtown is $25, while the trip in a normal cab typically exceeds $35.
But competitors and critics wonder if Uber will be able to survive on the South Coast. “That kind of technology is inappropriate for Santa Barbara. It’s useful in a bigger market, but [Santa Barbara] is too small a town,” said Gordon McElwain of Santa Barbara Yellow Cab, calling the premise “idealistic.” He claimed there are too many factors when requesting a cab — number of passengers, cab size, exact meeting place, and cost — to sort out via text message.
Oscar Taula, manager at Warrior Taxi Cab, reasoned that people living in Santa Barbara are unlikely to sign up to drive for Uber to supplement their income, but people in bigger cities may be more inclined to do so. He further argued that the company’s drivers are not as credible as licensed cabbies. The number of Uber drivers currently in Santa Barbara is unclear, as Iro said he could not release specific data per company policy. But he claimed Uber is safer for passengers because users have access to a driver’s name, picture, license number, and customer ratings.
Not all transportation companies are as skeptical. James Houseman of RockStar Transportation partnered with Uber Black — Uber also works with commercially licensed transportation companies to offer a more luxurious ride — as soon as it launched in Santa Barbara. “It’s a way to utilize my fleet,” Houseman said. “[Customers] use their app to find our drivers. By not making any phone calls, everything is really seamless.” Houseman pays Uber 20 percent of his proceeds, and he said his invoices have been doubling every week.
In several places like Boston, Colorado, Seattle, and Washington, D.C., the taxi industry has attempted to drive Uber cars off the streets with lawsuits, claiming the company evades expensive regulatory measures and poses unfair competition. The Santa Barbara Police Department regulates 68 cab companies in town, but tech companies like Uber fall under the jurisdiction of the California Public Utilities Commission (PUC).
In attempt to bring order to an ambiguous new sector, the PUC released new requirements for transportation providers in September. The decision puts organizations like Uber, Sidecar, and Lyft in a new regulatory class called the Transportation Network Category and requires them to obtain a permit, conduct criminal background checks for drivers, establish a driver-training program, implement a zero-tolerance policy on drugs and alcohol, and get $1-million per-incident insurance coverage.
Despite the fact that the PUC’s decision legalized the new transportation businesses, Uber objected and claimed, “It is a legal error for the Commission to assert jurisdiction over technology companies like Uber that do not provide transportation services.” Uber filed for a rehearing of the decision in October, asserting it should be immune to state regulations because it does not own vehicles, employ drivers, or provide transportation. The commission has until December 23 to make a decision on Uber’s request for a rehearing.