Update: 12:07 a.m.:
More than 5,000 members of TWU Local 234 are on strike at SEPTA.

From earlier:

With just three hours to go before almost 5,000 transit workers in Philadelphia strike, negotiations have come down to a dispute over pensions, a source with knowledge of the negotiations said.

The union workers are unhappy that their pensions don't grow commensurate to their pay once a worker makes more than $50,000. Managers pensions are uncapped, and members of Transportation Workers Union 234 want their people to also have uncapped pensions, the source said.
While there are other issues at issue, including medical benefits and schedules, it appears a strike that could affect hundreds of thousands of people will be either avoided or begun over the pension question.
SEPTA officials said negotiations were still going in earnest shortly before 9 p.m.  
One of the city's heavy hitting Democrats, Congressman Bob Brady, has entered the fray with just hours to go before almost 5,000 SEPTA workers begin a strike that will paralyze the city's buses, trolleys and subways.
He said he decided to "pop in" after hearing from a representative from Local 234 and SEPTA board members. The strike threat comes a week before the presidential election, and Brady said Hillary Clinton's campaign has expressed concern through Corey Dukes, the director of the campaign's Pennsylvania operation. Politicians on both sides of the aisle have said the strike could depress voter turnout for the presidential race and down ballot contests.
"It's gonna hurt," he said of the strike's potential to affect the Nov. 8 election.

Brady didn't say whether he believed workers would strike, but said negotiators still could meet a midnight deadline, when the current union contract expires.

"These things happen at the last minute," he said. "I don't know any strikes that get settled two or three days before."
Still, riders who take late night trolleys or buses in Philadelphia may want to consider finding another way home tonight.
SEPTA believes that bus drivers who may go on strike at midnight will probably finish their routes if that deadline passes without the authority and its largest union agreeing to a new contract.  But there's a possibility they won't. 
There was the hope for a resolution at SEPTA's 5:30 p.m. media conference at the Sheraton Hotel at 17th and Race streets, but precious little sign that a strike expected to go into effect after midnight would be avoidable. Authority lawyers and members of the Transportation Workers Union Local 234 are at the hotel negotiating Monday night, racing against the clock to resolve a contract dispute before almost 5,000 transit workers go on strike.
"At this time discussions have been progressing, however there are still many unresolved issues," said Carla Showell-Lee, a SEPTA spokeswoman.
The existing contract expires at midnight tonight, and if that happens without an agreement on a new contract TWU workers will automatically go on strike. Among nearly 5,000 workers in Local 234 are the operators of the city's buses, trolleys and subways.
Seventeen bus lines and four trolley lines in the city operate all night, and at 12:01 a.m. Tuesday the operators of those vehicles could abruptly end their routes and drive their buses directly to the depots. Riders who are on one of those buses at midnight potentially would not be taken to their destination.
"People should really pay attention to what they're going to be riding at that time," She would not say how close the negotiating parties were to a resolution. 
SEPTA suggested operators could choose to continue working and finish their shifts into the pre-dawn hours Tuesday, but they cannot promise that will happen. 
SEPTA has said the strike would not affect bus or trolley service outside the city, suburban bus services won't travel into Philadelphia. Workers who depend on the 125 bus to get from Center City to King of Prussia, for example, will have to get to Villanova to pick up their bus.
The only alternative transit riders will have in the city is the Regional Rail, which does have 52 stops in Philadelphia. Riders traveling within the city on Regional Rail will be able to board with transit fare cards at transit prices, but SEPTA warned Regional Rail might not make an appealing alternative. 
"Regional Rail is already operating at or near capacity, so we need to stress this is a very limited option," Showell-Lee said.
While there was still time to reach an agreement and avert a strike the city and region is girding for a work stoppage. Mayor James Kenney was maintaining contact with both sides in the negotiations, said spokesman Mike Dunn, but will only intervene directly in the talks if both sides request it. Philadelphia courts are running a shuttle service that will transport jurors to the Municipal Services Building from 6 a.m. to 9 a.m., and then will carry jurors leaving court starting at 3 p.m. A map of shuttle service is available here
Uber is responding by expanding access to its UberPool service, which allows riders to share an UberX with strangers for a reduced rate, into the suburbs. UberPool has been available in Philadelphia, Wilmington and Newark, Del., and in the event of a strike will become available to riders in the surrounding counties.
Negotiators for both sides talked at the Sheraton Hotel at 17th and Race streets late into the night Sunday and representatives said substantive issues were being discussed, but it was unclear how much progress has been made. Earlier Sunday a union spokesman said no progress had been made on any of the major disputes over the contract. Talks began at 9:30 a.m. Monday and continued this afternoon.
Sunday night Pennsylvania House transportation committee chairman John Taylor (R., Phila.) implored union representatives and SEPTA negotiators to talk all night Sunday into Monday, if necessary, to avoid a strike that could bring subways, buses, and trolleys in Philadelphia to a halt Tuesday.
"This would be a terrible thing for the city of Philadelphia at any time but particularly as we move toward Election Day," he said.
Tuesday morning could see transit riders scrambling to get to work. City transit provides 800,000 to 850,000 trips each weekday. Combined, the Market Frankford and Broad Street Lines move more than 311,000 people daily and trolleys carry about 83,000. While the region's suburban bus lines will continue to operate, essentially any route with a number lower than 90 will not. SEPTA's website, septa.org, has a list of services affected if there is a strike.
On Saturday negotiators discussed union concerns about vehicle operators down time between shifts and the lengths of breaks. Sunday included conversations about pension changes and health-care coverage, a union representative said.
Taylor said it may be SEPTA's responsibility to make concessions.
"Usually the people holding the money have a better chance of solving it," he said. Meanwhile, the city prepared for a transit shutdown. The Philadelphia Parking Authority has provided alternative parking plans, a PPA spokesman said. Uber, which is expected to be formally legalized in Philadelphia when the governor signs a recently passed regulatory bill, said it may adjust service to accommodate stranded transit riders. Cabdrivers, meanwhile, expressed solidarity with SEPTA workers, although past strikes have been a boon to cabbies.
"It's a lot more fares and a lot of times they're longer fares," said Ron Blount, president of the Philadelphia Taxi Drivers Alliance. "More trips out to Lansdale or King of Prussia, those kinds of areas."