Uber's fight of California data-sharing rule highlights its bumpy road

SAN FRANCISCO (Reuters) - Uber argued Thursday that it should not have to turn over ride data in a California regulatory standoff that shows how the transportation service is falling afoul of officials who could threaten its expansion.

An Uber app is seen on an iPhone in Beverly Hills, California, December 19, 2013. REUTERS/Lucy Nicholson

The issue, which is being heard in a California administrative court and whose outcome will not be known until next year, pits Uber against the California Public Utilities Commission. The CPUC’s approval of new ride-sharing services last year carried the condition that the companies make detailed data about their rides available to the commission.

The regulator needs the data, which it plans to keep confidential, to monitor the effect of new ride services on traffic flow, it says. Competitors Lyft and Sidecar have made their statistics available to the CPUC.

A lawyer for Uber, Rob Maguire, of Davis Wright Tremaine LLP, said the company had substantially complied with the request by handing over information such as the Zip codes where Uber had picked up and dropped off passengers.

The hearing comes as Uber faces setbacks to its legal status all over the world, begging the question of what the company can do to regain momentum.

Just this month, officials in Delhi banned the service after a passenger accused an Uber driver of rape. Another rape allegation surfaced Wednesday in Boston. Also this month, Uber drew bans in France, Spain and the Netherlands.

On Thursday, Uber announced it would temporarily halt operations in Portland, Oregon, where city officials had argued it was operating illegally. It will pause service from Sunday night until April.

“Suddenly there’s an awakening to the fact that Uber has a winner-take-all attitude,” said James McQuivey, an analyst at Forrester Research, who said he thought the attitude was contributing to actions that curb Uber’s activities around the world. “It turns hearts and minds against them, which puts them on dangerous ground.”

An Uber spokeswoman did immediately respond to a request for comment.

In California, potential penalties outlined by the CPUC for Uber’s failure to turn over data range from fines to a revocation of Uber’s permit to operate in the state, though analysts say revocation is unlikely.

Maguire, the Uber lawyer, argued that the data at issue - including time and date of every ride requested in California, the miles traveled, and the fare paid - was “highly confidential and sensitive information.”

Uber’s refusal to turn over the numbers comes weeks after the company itself came under fire for a privacy misstep: using a feature it calls “God View” to track customers’ rides. It now says it will curtail use of the feature.

Taxi drivers say the withholding by Uber is just the latest in the company’s flaunting of local laws in areas ranging from commercial licenses to insurance.

“Their business plan is not to be in compliance with regulatory requirements,” said William Rouse, president of the Taxicab Paratransit Association of California. “I think we would all have a difficult time identifying one jurisdiction anywhere in the world where they obeyed the letter of the law.”

Uber has countered that the taxi industry is corrupt and does not server customers efficiently.

In the decision in Portland, Oregon, affecting Uber, the city said it would create a task force to craft regulations around ride services. The task force will report findings by early April and the city will drop a lawsuit to stop Uber from operating in Portland, a city spokeswoman said.

Despite bad press in recent weeks, Uber remains the market leader in the United States. Uber provides seven times the rides of competitor Lyft, data from investment advisory firm FutureAdvisor shows.

In a blog post this week, Uber’s head of global safety, Philip Cardenas, said that Uber had delivered 140 million rides this year globally.

To restore credibility with detractors, Uber should stick with a focus on safety, adding features such as the ability to record all conversation during a ride, McQuivey said. The company should then mount a campaign to publicize its benefits to a community, for example highlighting drivers who are making more money than previously thanks to driving for Uber, he added.

Reporting by Sarah McBride; Editing by Leslie Adler