The frosty relationship between Uber and the Philadelphia Parking Authority seemed to have thawed Thursday, when the two parties explained the terms of their temporary agreement on the ride-sharing app's legality in Philadelphia County, valid through Sept. 30.
That 12-weeks reprieve should give some relief to commuters struggling with SEPTA's severe service disruption, caused by the sidelining this week of 120 railcars for repairs to serious structural flaws. One taxicab drivers' representative said the agreement has "devastated" the local industry.
Taxi companies accuse Uber of taking their business. Not only is Uber often cheaper than taxis, but the service is not subject to the numerous regulations that taxi companies are. Because of that, taxi drivers say there is less motivation for people to drive taxis rather than Uber vehicles.
The agreement includes a stipulation that Uber and the PPA will resolve all current legal disputes regarding UberX, Uber's regular service, and UberPool, its car-pool operations, in Philadelphia from Oct. 24, 2014, to July 7, 2016, through a settlement of $350,000 to be paid by Uber for operating without regulation. Vince Fenerty, the PPA's executive director, said the money would be held in a trust account set up by both parties' attorneys, and would be turned over to the PPA only when state legislation is passed that would regulate ride-sharing services such as Uber.
The Pennsylvania legislature failed last week before recessing for the summer to pass legislation on a measure that would have regulated the ride-share industry, in which riders hail drivers using apps on their cellphones.
Fenerty said the PPA had hoped lawmakers would have voted on such legislation by now, but had to take matters into its own hands instead.
"Unfortunately, there's this thing called the budget, and that has to be worked through before the legislature can do any work on this," he said.
Uber and PPA representatives were surprisingly convivial at a news conference on the agreement Thursday, a sharp departure from the two parties' dispute-riddled past. Fenerty offered Jon Feldman, Uber's general manager for Pennsylvania, a PPA baseball cap, and Feldman jokingly offered Fenerty an Uber ride.
In January, the Daily News reported that PPA had conspired with taxi companies to ensure that ride-sharing services such as Uber remained unregulated, operating illegally, in Philadelphia. In response, Uber called the PPA untrustworthy and urged the passage of legislation that would regulate Uber and similar services in Philadelphia.
Fenerty acknowledged that taxi companies would not be pleased with the announcement, but he chalked it up to the consequences of a free market. Ronald Blount, president of the Taxi Workers Alliance of Pennsylvania, said the announcement "devastated" the taxi industry.
"This is the nail in the coffin, because they're allowing them to operate with no regulations," Blount said.
He said Uber's presence outside Philadelphia makes sense, because less public transportation is available. But he said Uber had "oversaturated the industry" in the city.
Despite the rough history between Uber and the PPA, Fenerty emphasized the two have been working harmoniously for months.
"Sometimes there is a need for people to come together and make an exception," Fenerty said. "I trust people from my gut, and I trust that [Feldman] is an honorable man."
Alex Friedman said he was not so sure. Friedman, a taxi medallion owner and president of the Pennsylvania Taxi Association, said it was a "huge puzzle" why the PPA would suddenly work with Uber.
"I don't know if it was because of Uber pressure, or because SEPTA has broken trains, but all of a sudden we become a scapegoat," he said.
Besides the settlement, Fenerty said that the agreement would provide a "stand-down" period for enforcement action against Uber drivers and that the two would not pursue further legal action against each other over driver operations in Philadelphia.
Dennis Weldon, PPA's general counsel, said that although Lyft, an Uber competitor, was not involved in the agreement, it was in talks with the PPA.
Meanwhile, Uber announced Thursday a plan to expand UberPool's reach in Philadelphia and pledged to use at least $2.5 million through Labor Day to subsidize UberPool rides. Uber spokesman Matt Wing said UberPool was not currently self-sustaining in Philadelphia.
"The only way to make it profitable is when there's enough user demand," Wing said. "We're nowhere near that level yet."