PORTLAND, Ore. (CN) - Portland, Ore., sued Uber on Monday, three days after the car-sharing company began operating in the city.
In its lawsuit in Multnomah County Court, Portland claims that Uber Technologies runs an "illegal, unregulated transportation service."
Uber had been operating in Portland suburbs for some time and announced Friday that it would expand into Portland. Portland warned it not to, but it did.
Uber's business model allows unregulated drivers to offer paid rides. Drivers can sign up with Uber without a city permit or commercial insurance. Riders use the company's smartphone app to call the nearest driver.
Portland City Code subjects Uber the same regulations as regular cabbies, according to the city's lawsuit.
Uber also violates a city law that requires that cab companies outfit 20 percent of their fleet for people with disabilities, the city claims.
City Transportation Commissioner Steve Novick explained the city's position in a statement.
"If Uber thinks there should be no maximum price on what they charge Portlanders, they should make their case to the Portland City Council," Novick said. "
If Uber thinks taxi companies shouldn't have to serve people with disabilities, they should make their case.
"If Uber thinks taxis should not have to have proper insurance in case of a crash, they should tell us why we should allow that."
Uber offers rides for a base rate of $1.50, plus $.30 per minute, plus $1.55 per mile with a $1.00 "safe ride fee," according to the complaint.
"Uber also applies an additional 'surge pricing' model during times of peak demand," the city claims.
That's significantly less than the rates charged by Radio Cab, the longest-running cab company in Portland. Founded in 1946, Radio Cab charges a base rate of $2.50, plus $2.60 per mile and 50 cents per minute. The company also charges an additional $1 per extra person.
The city began a sting operation on Friday night. Uber drivers gave three rides to city transportation officials on Saturday. The city said in its statement that it issued warnings to the drivers and fined the company.
"Drivers found to be repeatedly operating without a permit may be subject to civil and criminal penalties," the city said.
Uber operates 52 countries and 137 cities in the United States. The company has drawn plenty of criticism, and lawsuits, for setting up shop without permission from local governments.
In Portland, Uber announced the launch of its services in a statement to The Oregonian newspaper and a blog post on its website.
The company also set up an online petition asking Portland residents to support its operations there. The petition had gathered 9,746 signatures at press time.
Portland sued Uber and Raiser LLC, the subsidiary that runs Uber's app.
Portland is represented by City Attorney Tracy Reeve.
Uber is represented by Gregory Chaimov and Harry Korrell with Davis Wright Tremaine.
On Monday, Chaimov removed the lawsuit to Federal Court.