Uber has agreed to hit the brakes on its controversial app-based ride service in Portland for three months while City Hall attempts to revamp its regulations to allow the company's services.
It's the first time in Uber's short but frenzied history that the San Francisco-based startup has voluntarily pulled out of a U.S. market where it was operating.
The company promised Mayor Charlie Hales that it will suspend its clandestine private-taxi pickups starting Sunday night.
The agreement between Hales and Uber was reached about 2 p.m. Thursday, just days before a federal judge was scheduled to hear the city's request for an injunction to force the company to stop operating in Portland.
According to a statement from Hales' office, the mayor will convene a task force to speed up the process of reviewing and updating city rules, which currently prohibit ridesharing services where drivers use their personal vehicles as taxis.
"The City is committed to developing a new regulatory framework that includes innovative transportation network companies," the statement said.
Hales said the City Council should be able to act on the task force's recommendations by April 9.
If new rules aren't adopted by then, both the mayor and Commissioner Steve Novick, who oversees the Bureau of Transportation, promised to push through a temporary agreement to allow Uber, Lyft and other ridesharing companies to operate within the city limits.
The latest turn in the Portland vs. Uber soap opera doesn't mean $1.65-per-mile Uber drivers will completely disappear from the city's streets.
The company's UberX service -- which allows residents to hail and pay for private rides with the push of a smartphone button -- will continue to operate in Gresham, Vancouver, Beaverton, Tigard and Hillsboro.
Ridesharing task force
Members of Portland's new task force to review and revamp city code to allow ridesharing companies such as Uber are still being selected. Those who have accepted an appointment include:
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Mike Greenfield
, retired State of Oregon executive (Chair)
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Raihana Ansary
, Portland Business Alliance
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Leslie Carlson
, Brink Communication
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Chris Bebo
, Oregon Restaurant and Lodging Association
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Darren Buckner
, Workfrom.co
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JoAnn Herrigel
, Elders in Action
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Kayse Jama
, Center for Intercultural Organizing
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Jeff Lang
, Gales Creek Insurance Services
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Richard Lazar
, Technology Association of Oregon
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Dan Lenzen
, Venture Hospitality and Real Estate
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Sue Stahl
, Commission on Disability
"We are pausing pickups within Portland city limits for three months and the city has agreed to expedite regulations," Eva Behrend, an Uber spokeswoman, said in an email. "We will continue operating in the Portland metro area with drop-offs continuing in Portland."
Uber said more than 10,000 rides had been delivered in Portland since it rolled into the city, with nearly 300 drivers signing up for training. "More than 11,000 Portland residents and visitors have signed our petition, showing support for a safer way to get around their city," Uber said in an email to Portland customers.
During the evening commute on Dec. 5, Uber suddenly launched UberX without Portland's blessing, arguing that the city's taxi and for-hire ride regulations are "antiquated" and don't apply to the sharing economy.
The city's agreement with the company on Thursday all but conceded that point.
"At the end of the day, we really wanted to upgrade our policies to match the reality of the sharing economy," said Hales spokesman Dana Haynes.
"We couldn't pretend the sharing economy wasn't here," he said. "The goal wasn't to stop one rogue company. We need to set a policy, we needed to do it right, and this agreement gets us there. But we need to move quick."
Haynes said the task force's "soup to nuts" regulation review will focus on "mandated safety criteria" for customers and the public over the next three months.
Portland's taxi regulations are among the nation's most restrictive, say Uber and rideshare competitors such as Lyft. Among other things, city code requires a 60-minute advance reservation for non-taxi ride services and sets a strict quota on how many taxi licenses can be handed out during any given year.
So far, the heavily influential Private for-Hire Transportation Board of Review, which includes representatives from the Portland's taxi and town-car companies, have been dead set against relinquishing any of the city's 460 taxi permits to Uber drivers.
At the same time, a recent Portland Bureau of Transportation report showed the city is greatly underserved by taxis when they're needed most. Uber officials said it's getting harder for the city to defend strict ordinances designed to protect the taxi industry from competition.
"The number of taxis we have in the city is unquestionably low," Haynes said.
When Uber defiantly launched two weeks ago, the company said Novick was moving too slowly with his efforts to revamp city code.
On Thursday, however, Novick said he plans to work quickly to come up with a temporary plan to suspend the existing cap on taxi permits and price regulations to "see how the market operates without those rules."
The task force's final recommendations should be based, in part, on that experience, he said.
The city could wind up eliminating those regulations altogether, or eventually retaining one or both in some form, Novick said. "What I am not interested in is a situation where we continue to impose caps and price regulations on some operators but not others," he said.
Previously, Novick had promised to "throw the book" at the company for refusing to play by the city's rules. Code enforcement officers have fined the company $67,750 for running an illegal taxi business after booking a handful of rides. It was unclear if the agreement will let Uber off the hook for those tickets.
However, city officials did not follow through with threats to ticket drivers and have their cars towed.
The new task force will begin meeting on Jan. 14. Mike Greenfield, former director of the state Department of Administrative Services, will chair the committee.
So far, the mayor has appointed 11 transportation, business and social-services leaders to the task force, but no one representing the city's taxi companies.
Among other things, the group will discuss whether the city should continue to limit the total number of taxi permits granted and whether it should regulate pricing. "In addition, the task force will explore how regulatory changes could improve driver earnings and working conditions," the mayor's statement said.
Earlier this year, the City Council approved new regulations to allow short-term rental operations in private homes for another sharing-economy darling, global hospitality startup Airbnb.
As the city geared up for its lawsuit against Uber, staffers in the mayor's office and company representatives talked almost daily in an effort to come up with a compromise, Haynes said.
At the same time, he said, the agreement reached Thursday shouldn't be seen as a surrender.
The city, Haynes said, was ready to battle Uber in court and get it kicked out of the city. The first hearing in U.S. District Court was set for Tuesday.
"We're not hearing from the city's attorneys that they were dispirited about the fight ahead," he said. "But they're also not disappointed that we've been working aggressively with Uber to come up with a deal."
-- Joseph Rose
* Updated to correct spelling of Steve Novick's name.