Uber, the smartphone-dispatched private taxi service, isn't such a hit with local governments: the company narrowly avoided being priced into oblivion in Washington, DC, and this month it's being challenged in Boston. The reason might seem odd: according to the Commonwealth of Massachusetts Division of Standards, which held a hearing (PDF), the company's use of GPS-equipped smartphones is the culprit. Despite admitting that GPS positioning is reasonably accurate and has been in wide use for decades, the Division argues that since there are no established standards of measure for GPS-based transportation costs, the iPhones given to Uber drivers are considered "unapproved devices" and are illegal to use in commercial transactions until those standards are set.
While you might wonder where the local government gets off regulating how a private company can determine how much to charge for a fare, consider the city's frame of reference for a moment: while conventional taximeters are subject to a number of checks and standards to make sure taxi rates are transparent and drivers can't easily overcharge customers, there's no way for Boston to protect citizens and tourists if Uber's drivers could modify or trick the app into becoming more profitable. As The Boston Globe points out, though, the Commonwealth already relies on GPS-equipped smartphones to measure its independent contractors, and any other Massachusetts business that uses a smartphone to conduct its business (say a Square reader, or a mobile wallet app) could be using an "unapproved device" as well. Disruptive technology is disruptive, we suppose.
For its part, Uber says "it is our strong belief that the technology and service we offer does not violate existing law and regulations," and that it will "continue full speed ahead":
Uber is a first to market, cutting edge transportation technology and the simple fact is that the Commonwealth’s regulations were not written with these innovations in mind. As such, we are committed to dialogue with the Division on this new generation of technology and to working closely with the agency to keep our service available for our truly Uber users and their drivers.