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Uber agrees to suspend service in Portland after lawsuit

Ride-sharing service plans to pause operations for three months while the city takes time to craft new taxi regulations.

Uber has agreed to suspend operations in Portland while new taxi rules are created. Pablo Blazquez Dominguez/Getty Images

Uber has agreed to suspend its operations in Portland, Ore., for three months while city officials revise rules governing taxis and the use of ride-sharing apps, the company announced Thursday.

As part of the agreement, Uber will pause its operations on Sunday evening and resume service after April 9, even if new regulations are not in place. The deal comes a little more than a week after Portland officials filed a lawsuit to shut down Uber, which had just launched in the city despite official opposition.

"Uber is dedicated to curating and continuing a valuable and constructive relationship with Portland's lawmakers, working to create a regulatory framework that works for everyone, not just us. Not just the taxi cabs. Not just the city officials. Everyone," the company said in a statement.

It's the second suspension of operations in as many months for Uber, which uses a smartphone app to connect riders with part-time drivers of private cars, oftentimes for less than the cost of a traditional taxi or car service. Last month, Uber shut down its service in Nevada over what it called "confusion" about its business model, as it looks for a legal way to resume business in the state.

Uber operates in more than 250 cities in 50 countries, but that speedy growth has not been without speed bumps. Government regulators and taxi commissions, arguing that on-demand ride services don't adhere to the same regulations as traditional taxis, have hit ride-sharing apps with cease-and-desist orders in Pennsylvania and Virginia.

Portland's lawsuit, which was filed December 8, accused Uber of operating in violation of city regulations and asked the court to order Uber to stop operations. That lawsuit was filed just three days after the low-cost UberX service launched in Portland despite city officials having already deemed the service illegal.

In response to news of Uber's planned launch, Portland transportation officials earlier this month warned that the city was prepared to issue civil and criminal penalties against Uber and its drivers for "operating without required permits and inspections." Uber drivers caught illegally picking up passengers in Portland could be fined up to $2,250 and face arrest and possible jail time.