Now there’s a third option.
Uber, the ridesharing application reportedly valued at $10 billion, brought its service to Annapolis on Wednesday. The company’s application, which allows passengers to order rides and pay drivers through their phones, is increasingly ubiquitous in large cities such as Baltimore, Washington D.C., and New York.
“We’re there to help people get wherever they need to go,” said Shwetha Rajashekara, Uber’s general manager for Maryland.
Uber’s debut in Annapolis comes at a tumultuous time in the relationship between the city’s cab drivers and the Department of Transportation, as well as between Uber and the state’s regulatory agency.
Maryland’s Public Service Commission proposed in late April classifying Uber as a “common carrier” rather than as a smartphone app, subjecting the company to similar regulations as the taxi industry. Uber, which plans to appeal, has threatened to leave Maryland if the ruling is enforced.
Regulation of Annapolis’ taxi industry remains a sore spot for some drivers, who protested last month a proposed move to county regulations. The transportation department regulates Annapolis’ 225 licensed cabs and will do so for another year through a deal between taxi drivers and the city.
Drivers agreed to higher fees for new ownership permits and renewals in fiscal 2015 in exchange for keeping regulations under city control. The budget has not been approved by the City Council.
Annapolis cab drivers interviewed Wednesday were not familiar with Uber’s pricing or business model. When explained to them, some drivers felt the application could threaten the city’s taxi industry.
“They’re taking another piece of the pie,” said Robert Eades, owner of Neet-N-Klean Taxi Co.
Uber’s business model differs from traditional taxi service, often to the delight of customers and dismay of taxi drivers. The company contracts directly with drivers rather than a dispatch service. Uber receives 20 percent of individual fares, while the driver takes 80 percent.
Customers order a car through Uber’s app, which syncs with a credit card, rather than from a dispatch service. The app shows the name of the driver, the type of service requested and the estimated time of arrival. It also allows customers to track their car with a mapping feature.
Uber will offer three services in Annapolis: UberX, the least expensive ride, UberBlack, a higher-quality sedan service, and UberSUV, a larger car service used for group travel.
The company’s pricing model also differs from taxi services. Annapolis residents will pay a base fare of $2.76 per ride, combined with an additional 19 cents per minute and $1.52 for every mile traveled, according to Uber’s website. But the company increases prices during high periods of demand, with its application informing customers about the price hikes before requesting a ride.
Annapolis cabs, by comparison, charge an initial $2 fee per trip, along with 50 cents per minute and $2 per mile traveled.
The cleanliness and condition of Uber’s vehicles, along with the app’s convenience, have made the company a hit among customers and investors. Uber is reportedly seeking another round of financing at a $10 billion valuation, according to tech industry publications, and recently received $258 million in funding from Google Ventures.
‘Not one bad experience’
Evalyse Limon, a Baltimore resident originally from Pasadena, said she feels safer using Uber than taxis. Limon, 23, plans to use Uber when traveling in Annapolis.
“I have not had one bad Uber experience, whereas with taxi drivers I feel a little uneasy,” Limon said.
Thousands of people already have used Uber’s application in Annapolis, Rajashekara said. Uber’s Annapolis coverage extends from Pasadena to Easton, as well as to Davidsonville, Crofton and Bowie.
Annapolis will likely work as a market for Uber, said Al Stapleton, president and founder of Annapolis-based car-service application RideCommand. Stapleton is critical of Uber’s practice of contracting with individual drivers, which he said leaves doubts about insurance and licensing. Uber has a commercial insurance policy of $1 million per incident.
Despite his criticisms, Stapleton acknowledged Uber’s success at developing markets.
“If I had to put my money on Uber in Annapolis, they are going to make it work,” he said.
Making it work?
Uber says it can only “make it work” if the Maryland PSC lets them. Judge Terry J. Romine issued an opinion on April 24 proposing categorizing Uber and other rideshare companies as common carriers rather than as technology companies. The distinction would allow the commission to regulate Uber in a way similar to taxi companies.
The company, which Rajashekara said will appeal the PSC decision if adopted, has threatened to leave Maryland if classified as a common carrier. Rajashekara, however, said Uber plans to remain in Annapolis for a while.
“We’re confident that consumer choice and competition will prevail,” she said.
It is unclear how the Annapolis officials will regulate Uber, if at all. Rajashekara said the company did not discuss their service with the city before launching on Wednesday.
Uber would be the first national rideshare application with a foothold in Annapolis. Lyft, a similar San-Francisco-based company, operates in Baltimore but does not extend service to Annapolis.
© 2014 The Capital (Annapolis, Md.)
