When Uber and Lyft first moved into Pittsburgh this winter, they were welcomed by many who bemoaned a dearth of transportation options in the area. The reception from taxi companies was chillier, and state regulators repeatedly noted that the business model violates Pennsylvania law, but that didn’t seem to be a major deterrence.
Now — after a slew of citations from the state Public Utility Commission and renewed warnings from the state insurance commission — drivers in Pittsburgh have become a little more wary. Some who proudly displayed Lyft’s signature pink mustaches on their cars have now stowed them in the trunk for fear of being recognized by an insurance agent or PUC officer. Uber’s drivers in Pittsburgh are equally tentative, and none wanted to be photographed with their vehicles.
“It is a gray area,” said Lyft driver William, who asked that his last name not be used. “I am worried my insurance company might drop my coverage, because I know people this has happened to.” An Uber spokesman in Pittsburgh said he was not aware of any of its drivers having policies canceled by insurance companies; Lyft did not reply to requests for comment.
The two San Francisco companies have enlisted drivers in Pittsburgh and other cities to use their personal vehicles to offer taxilike services, connecting drivers and riders via smartphone apps. The companies have been compared to illegal jitneys by opponents.
The Pennsylvania Insurance Department issued a statement last week urging those considering using their cars for ride-sharing services to be aware of what their policies did — and did not — cover.
“Learning too late of gaps in insurance coverage can have serious financial consequences for participants in these programs,” Insurance Commissioner Mike Consedine said in the prepared statement.
William said he did not plan to stop driving for Lyft. He is bringing in some extra money and meeting new people, which were his main reasons for signing up in the first place. And he thinks the issue of ride shares’ legal status will be resolved sooner rather than later, since both Pittsburgh Mayor Bill Peduto and PUC Chairman Robert Powelson have publicly voiced their support.
“The PUC is really not my concern,” he said. “It’s outdated and old, and doesn’t want to accept change.”
But the PUC is not without power. An enforcement officer with the PUC cited 23 ride-share drivers in Pittsburgh in March and April for operating a passenger carrier without a certificate of public convenience. Taxi companies are required to have such a certificate, along with commercial vehicle insurance.
Ride-share drivers who willing to talk to a reporter last week said the income they had earned so far has been in line with their expectations. Casey Koza of Canonsburg drives for Lyft part time and earns about $550 per week for roughly 20 hours a week. He is a mentor to new drivers, helping them learn the ropes — such as the fist-bump greeting and having passengers ride in the front seat — when they first sign up.
“I haven’t really had any bad experiences with customers,” Mr. Koza said. He said he has not been able to understand the resistance from taxi companies because Lyft and Uber are serving different customers. “Taxi drivers don’t want these $4 trips from the South Side to Oakland on a weekend,” he said, “but there is a need there.”
Both Lyft and Uber declined to provide specific numbers on the average income for Pittsburgh drivers. Late last month, an item on Uber’s official blog indicated that the median income on UberX, the version of its service that is available in Pittsburgh, runs more than $90,000 per year per driver in New York and more than $74,000 per year per driver in San Francisco.
The future of ride-share companies in Pennsylvania isn’t clear.
The two companies have faced staunch opposition in some other states, most recently in Virginia, where the Department of Motor Vehicles issued cease-and-desist letters ordering them to shut down. But Colorado passed legislation late last week formally regulating the ride-share companies.
“Consumer protection is a worthy goal that we endorse, but rules designed to protect consumers should not burden businesses with unnecessary red tape or stifle competition by creating barriers to entry,” Gov. John Hickenlooper said in a statement released with the Colorado signing.
In any event, both companies are well-financed and don’t have plans to pull out of Pennsylvania anytime soon. Uber announced Friday it had raised $1.2 billion in an investment round; Lyft raised $250 million in April and launched in 24 new cities in a single day in May.
“Pittsburgh is one of Uber’s fastest-growing cities ever,” spokesman Matthew Gore said in an email. “And that is simply because we're creating real choice and valuable opportunities for both sides of the ride-sharing market.”
Kim Lyons: email@example.com or 412-263-1241. Twitter: @SocialKimly.