Ruling that the popular ride-sharing company Uber Technologies is subject to the same regulations imposed on other for-hire vehicle services in the state, state regulators at the same time ordered a revision of those rules to reflect the changing business.
The Maryland Public Service Commission ruled Wednesday that Uber is a common carrier like other for-hire car services, a decision that the company opposed, saying it threatened its business model. Yet the commission also ordered its staff to begin crafting new rules for such for-hire companies, saying it recognizes "that many industry changes and technological advances have occurred since these regulations were adopted, including the everyday use of the Internet."
The ruling applies to Uber's black car and SUV services, and requires the company to apply for a motor carrier permit for both services within 60 days.
The commission gave its staff 90 days to draft new rules for for-hire companies, with input from Uber. The company's application allows users to request rides via their smartphones and to pay through the app.
The commission, responsible for protecting consumer rights, regulates taxi companies and other for-hire common carriers. The ruling affirms an April order by the state's chief public utility law judge.
It classified Uber as a for-hire carrier, not a taxi company, a distinction that will shape the rules Uber will face. For example, for-hire carriers can't stop for customers hailing rides on the street but can operate anywhere in the state, rather than in specific jurisdictions like taxis.
For-hire carriers have to clearly define their rates to the commission and provide substantial notice of changes, which could prohibit Uber from using its "surge pricing" model for charging more during times of peak demand.
Uber said Wednesday that it would appeal the decision, which it said shows that while "the people of Maryland and their elected leaders support innovation and choice, Maryland's PSC is stuck in the days of the horse and buggy."
It added: "The PSC's attempt to take choice and competition away from Maryland residents will not stand. Uber will continue to defend the rights of riders and drivers to have access to the safest, most reliable transportation alternatives on the road."
Gov. Martin O'Malley said in a statement that the commission was right to call for updated rules, adding that the state "shouldn't try to limit a 21st-century marketplace with 20th-century regulations."
"I urge the Commission — and the Maryland General Assembly — to ensure that our laws and regulations accommodate and foster new innovations to ensure that Marylanders have choices, while always ensuring that we protect the safety of all Marylanders," O'Malley said.
The ruling came the same day as one in Virginia that allowed Uber to continue operating in that state.
Uber has called Maryland's decision to regulate it as a common carrier the "first of its kind in any state," and one that would threaten its presence in Baltimore and Annapolis.
The company had argued as a technology service that connects independent drivers with passengers, it is exempt from commission oversight under the Telecommunications Act of 1996.
The commission concluded, however, that "the undisputed facts and circumstances in this case make it clear that Uber is engaged in the public transportation of persons for hire."
It found Uber does not only provide information between drivers and passengers, but uses its technology to operate a fleet of vehicles, set rates, collect fares and pay drivers.
The ruling does not apply to Uber's low-fare service, UberX, or to Lyft, another ride-sharing company operating in Maryland under a model similar to UberX, which connects customers looking for rides with other individuals driving their personal, unlicensed vehicles.
Uber's black car and SUV drivers are already licensed.
Regina Davis, a spokeswoman for the commission, said she could not comment on whether the ruling Wednesday would have an impact on UberX and Lyft, which the commission is also reviewing.
In recent weeks, Uber had been emailing its Maryland customers urging them to call the commission on the company's behalf.
"The PSC's attempt to regulate Uber as a 'common carrier' — a fancy way of saying transportation company — is like the FAA [Federal Aviation Administration] trying to regulate Orbitz, an online travel booking platform, as an airline, simply because the company books flights out of BWI," the company said in one email to customers.
The plea had an impact, but a limited one.
In a statement in which she concurred with the rest of the commission but offered her own thoughts, Commissioner Anne Hoskins said the PSC "received over one thousand e-mails from Uber consumers and drivers expressing opinions about this matter," but could not legally consider any of them because they were not part of the official case record.
The commission must ensure more public participation in determining how Uber should be treated in the state moving forward, Hoskins said, and she urged participation from citizens and businesses in the process of crafting new rules.
Uber, founded in San Francisco in 2009, is facing other challenges in the state.
On Tuesday, the Office of People's Counsel urged the Public Service Commission to investigate the operations of UberX and Lyft. Last month, the city of Annapolis ordered Uber to stop operating there until it registered as a taxi company.
More than 30 Maryland cab companies also filed a lawsuit against Uber demanding an unspecified amount of damages for upending the state's cab industry.