Uber Sued for Operating Illegally by US City of Portland

The suit also asked the court to order the service to stop operating in Portland until it is in compliance with city rules.

"Uber is subject to and in violation of the city of Portland's Private for Hire Transportation Regulations and Administrative Rules," the suit said.

Uber is the most prominent of many new smartphone-dependent car services seen as bypassing strict regulations faced by licensed cab drivers.

"Our main concern is public health and safety, because the state invested in the cities the responsibility to do that," Mayor Charlie Hales said.

"Beyond that, though, is the issue of fairness. Taxi cab companies follow rules on public health and safety. So do hotels and restaurants and construction companies and scores of other service providers. Because everyone agrees: Good regulations make for a safer community. Uber disagrees, so we're seeking a court injunction."

The company sought to play up widespread public support.

"Uber has received a tremendously warm welcome from riders and drivers in and around Portland. We appreciate the way residents have welcomed Uber," said company spokeswoman Eva Behrend.

She said that almost 7,000 Portland residents had signed the petition in support of Uber in just a few hours.

Uber said last week that it had raised a fresh $1.2 billion (roughly Rs. 7,400 crores) in funding, giving the popular ride-sharing startup a reported value of some $40 billion (roughly Rs. 2,46,960 crores).

Founded in California in 2009, Uber is best known for its smartphone app that lets people who need a ride connect with local drivers. The app uses GPS to put the user in contact with the nearest driver. Uber charges a commission for each ride.

Its fast expansion has riled taxi drivers in countries where it operates, since they often face significant rules and regulations, and attendant costs.

Uber has also faced scrutiny following negative comments about the news media from a top executive and revelations that it offered a "God view" of customers that could allow spying. The company hired experts to conduct a privacy review.