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Proposal for Uber sedan, SUV services in Maryland raises questions

Members of the Public Service Commission, along with the state's consumer advocate and a lawyer for Yellow Cab, raised questions about a proposed settlement that would allow Uber car and SUV services to continue operating in Maryland.
Members of the Public Service Commission, along with the state's consumer advocate and a lawyer for Yellow Cab, raised questions about a proposed settlement that would allow Uber car and SUV services to continue operating in Maryland. (Barbara Haddock Taylor / Baltimore Sun)

State regulators, a state consumer advocate and a major competitor of the popular ride-sharing company Uber Technologies joined together Friday to question a proposed settlement that would allow Uber to legally operate sedan and SUV services in Maryland.

During a three-hour Maryland Public Service Commission hearing, Commissioner Lawrence Brenner asked why the state should enter into an agreement with Uber to bring its UberBlack and UberSUV services into regulatory compliance when the company continues to defy regulations with other services, including UberX, the company's low-cost service.

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Brenner said he disagreed with PSC staff counsel Lloyd Spivak's contention that a company and its subsidiary could be treated as separate entities. Spivak negotiated the proposed settlement with Uber.

Under the proposal, Uber subsidiary Drinnen LLC would register the services with the PSC and operate in the state, while retaining Uber's controversial "surge pricing" model, which allows the company to jack up prices when demand increases.

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Uber has been fighting efforts by the state to bring it into compliance with regulations imposed on taxi companies and other so-called "common carriers," saying it is not a traditional transportation provider but a technology company that simply connects drivers with customers through its mobile application.

Maryland regulators haven't bought that argument and ordered Uber to comply with permit, licensing and insurance regulations. They have also directed PSC staff to develop new regulations for the industry as it changes with the introduction of new technologies.

Along with appealing the PSC orders in court, Uber has been negotiating with the commission staff on several fronts, including to bring UberBlack and UberSUV into compliance.

The settlement would do just that, allowing Drinnen to obtain a common-carrier permit and provide ride-share services through the Uber app under existing regulations while also continuing to use surge pricing. The arrangement would remain in place until the state passes new regulations for the industry, which officials said could come in draft form as early as next month.

Representatives for Uber and the commission staff, which jointly proposed the settlement, said it would increase public safety and serve the best interests of Maryland residents.

Others questioned that assumption, including several PSC commissioners, People's Counsel Paula Carmody and Todd Chason, an attorney for Uber competitor Yellow Cab.

Carmody said many questions she had posed in a filing in the case were not answered at the hearing, which was attended by an attorney for Uber but no company executives who could answer technical questions about how the Uber-Drinnen relationship would work.

Chason said there was no evidence submitted to show that the new arrangement would benefit Marylanders. He also complained that he couldn't even keep track of the number of times PSC transportation director Christopher Koermer — the only person to testify on the proposed settlement — said he didn't know the answer to a question.

"It was quite a number, and there were some very important questions raised," Chason said.

W. Kevin Hughes, the commission chairman, did not set a date for deciding the case.

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