Uber, negotiating with city, 'shocked' by PUC fine
Pressure increased for Philadelphia to reach a deal that would allow ride-sharing to operate legally in the city, officials said Thursday, the same day a state regulatory agency fined Uber $11 million.
Pressure increased for Philadelphia to reach a deal that would allow ride-sharing to operate legally in the city, officials said Thursday, the same day a state regulatory agency fined Uber $11 million.
The Pennsylvania Public Utility Commission levied the whopping fine - the largest in its 79-year history - even as city officials and representatives from Uber and Lyft huddled to hash out details regulating ride-sharing in Philadelphia in advance of a Wednesday deadline set by the state legislature.
Uber executives were "shocked" by the fine and have vowed to appeal.
"There was no actual harm to Pennsylvanians, and the commission subsequently approved the same operations," a statement from Uber said. "We look forward to making our case to the Commonwealth Court."
Uber will continue working with the PUC despite the decision, the statement said.
The $11,364,736 fine, which passed 3-2, penalized Uber for operating a transportation business without the commission's blessing two years ago.
"It must be recognized that Uber has deliberately engaged in the most unprecedented series of willful violations of commission orders and regulations in the history of this agency," said John Coleman, a commissioner.
The fine was designed to deter others from ignoring the PUC's authority, the decision stated.
The commission granted Uber and other ride-sharing businesses, such as Lyft, a temporary certificate of experimental authority, which has allowed them to operate legally in the state since 2015.
The largest previous fine levied by the body was $1.8 million against an electric company that defrauded customers. The Uber fine is still much less than the $50 million recommended in a Nov. 17 finding by PUC administrative law judges that Uber violated the public utility code.
Uber's violations took place from February to August 2014, when it operated in the state without official sanction. The commission noted that there have been few accidents since then, no injuries, acceptable insurance coverage, and virtually no complaints from customers.
The commissioners who voted against the fine, both Republicans, cited those factors as reasons the $11.3 million was too high, and one, Robert Powelson, noted that customers willingly sought the service. He added that ride-sharing, in which customers use a smartphone app to connect with participating drivers, is a business model without precedent.
"They were operating in a legally gray area," he said.
He also chastised the PUC staff for refusing to negotiate a settlement with Uber, something the PUC did with Lyft last year for $250,000. Uber was willing to reach a settlement, spokesman Jason Post said. It was denied the opportunity, though, officials said, because it took longer to comply with the commission's requests than Lyft.
Meanwhile, Lyft and Uber participated in lengthy meetings with city officials every day this week to try to negotiate an agreement that would allow ride-sharing to permanently operate legally. On Thursday, a legislative aide from the House Committee for Consumer Affairs told those at the meetings that if they don't reach an agreement by Wednesday, the committee could write a bill without their input.
The deadline, and the threat of losing a say in the legislation, seemed to have focused the parties, said Rep. Bob Godshall, chair of the House Consumer Affairs Committee.
"If I wouldn't have done that, we wouldn't be where we are today," Godshall said.
He has heard from the Philadelphia Parking Authority that the meetings have been productive. A spokeswoman from city government said officials were "optimistic" an agreement will be reached.
215-854-4587@jasmlaughlin