Uber ride-sharing company prepares for showdown with South Carolina regulators

FILE/Ap New York City taxis drive through New York's Times Square. The car-hailing service Uber is trying to take root in many cities across the country, including Charleston.

Uber shows no signs of bending to South Carolina's rule book about the state's transportation industry.

The multibillion-dollar technology company launched its controversial ride-sharing app UberX in early July in Charleston, Myrtle Beach, Greenville and Columbia, and it has since been met with a wave of resistance from state and local policymakers.

The state Office of Regulatory Staff has filed complaints in a petition sent to the S.C. Public Service Commission, the agency that regulates transportation businesses such as taxis. The commission has set a hearing with Uber offi-cials in Columbia next month on whether the ride-sharing app belongs under the state's jurisdiction. If so, Uber could be told it has to abide by the same rules as taxis, which Uber has refused to do.

In a response to the state petition, Uber acknowledged that it bypasses state rules that require vehicle inspections and driver background checks conducted by state officials, among other measures that taxi companies must follow to be certified in the state.

At the same time, the company "denies that it is providing a passenger carrier transportation service or that it is otherwise subject to the jurisdiction of the commission," according to the document.

Uber's answer to the petition sets the stage for how the state hearing will likely play out next month. But it also underscores the ongoing conflict the company has faced with policymakers in courtrooms across the country, a conflict that pits innovation against regulation.

The governmental oversight of the taxi business was put in place to act on behalf of the public interest to ensure the vehicles are safe, charge fair and predictable prices, and are adequately insured. But Uber argues that its tech-based service cannot be mistaken or treated as a taxi company, and that doing so would threaten consumers' ability to choose between the two different types of businesses.

Uber was co-founded by Travis Kalanick, who is now its chief operating officer. It launched in 2009 in San Francisco with a car-paging app that acted as a sort of mobile dispatcher for a chauffeur service. It later started UberX, a similar app that instead relies on freelance drivers who use their own vehicles and personal car insurance. Now known as a ride-sharing service, the app has spread across the globe and continues to rapidly expand to new cities - regardless of their rules.

Drivers registered with UberX are vetted by the company, and if they pass background and driver history checks, Uber says, it gives them company iPhones compatible with the app. When drivers want to offer rides for fares, they tap a button to go "online," which allows them to locate passengers requesting rides. Drivers earn 80 percent of the fares and are paid weekly by direct deposit.

The consumer's version of UberX is a GPS-enabled app available for Apple and Android devices that allows users to order rides from nearby drivers. Payment is calculated on time and distance, and is drafted from the passenger's credit card linked to his app account. The app prompts drivers and passengers to rate each other.

If the driver is using Uber when he gets in an accident not covered by the driver's insurance, Uber's $1 million commercial auto insurance policy kicks in, according to the company.

Its rating system, process for vetting drivers and popularity are reasons Uber argues that it doesn't, and shouldn't be asked to, answer to decades-old rules regarding transportation businesses.

Meanwhile, cab companies in cities where Uber has launched, including Charleston and Colum- bia, have said traditional regula-tions are in place for safety reasons, and that allowing Uber to operate above those laws puts passengers in danger and taxis at a disadvantage.

Policymakers across the U.S. have struggled to determine how Uber and similar ride-sharing services should be regulated, if at all, while also balancing the playing field for traditional taxis. Last week, two neighboring states came to very different decisions on how to handle ride-sharing companies.

The Maryland Public Service Commission ruled that Uber is a for-hire transportation service and subject to its regulations. The company has 60 days to apply for a state motor carrier permit there.

Uber said it intended to appeal that decision, and that it would "continue to defend the rights of riders and drivers to have access to the safest, most reliable transportation alternatives on the road," according to The Baltimore Sun.

On the same day, Virginia officials agreed to give ride-sharing services operating permits, if they continue to require insurance and conduct background checks on drivers, The Washington Post reported.