PUC pursues cease-desist orders on ride-share companies

Ride-sharing companies Lyft and Uber should be ordered to shut down operations in the area immediately “because something disastrous could happen,” a prosecutor for the Pennsylvania Public Utility Commission’s Bureau of Investigation and Enforcement argued before a two-judge panel in Pittsburgh on Thursday.

Attorneys for the ride-share companies countered that penalizing their clients for something that might happen, with no evidence of any safety hazards so far, was unwarranted and there was no need for such “overzealous” enforcement.

Hearings on the cease-and-desist orders against the two companies were held at the State Office Building, Downtown, giving all sides the chance to present testimony on whether the order, requested by the PUC’s enforcement arm, should win approval. Administrative Law Judge Mary Long said the ruling will come by Tuesday.

The hearings moved swiftly, taking a little over three and a half hours, drawing only a dozen spectators and featuring a single witness.

By operating peer-to-peer ride-sharing services that connect drivers in personal vehicles with riders via a smartphone app, Lyft and Uber are skirting state rules governing transportation for compensation, attorneys for the PUC’s enforcement arm argued.

The sole witness for both hearings, conducted separately, was PUC enforcement officer Charles Bowser. Mr. Bowser issued 23 citations to Lyft and Uber drivers in March and April for operating in Pittsburgh without certificates of public convenience. Those cases are pending a hearing before a local district justice.

But the enforcement actions have not served as a deterrent to either company, both of which continue to operate locally, raising serious safety concerns, the PUC’s enforcement arm argued, which prompted the emergency petition for a cease-and-desist order filed June 16.

In fact, enforcement officers have taken trips in ride-share vehicles in Pittsburgh as recently as this week, Mr. Bowser testified. PUC spokeswoman Jennifer Kocher said that as of Thursday, no new citations had been issued to drivers.

Mr. Bowser testified that he learned Uber was operating in Pittsburgh earlier this year through media reports and a post on its blog. He downloaded the app, and requested rides on 11 occasions, he said.

Prosecutor Michael Swindler asked if any of the vehicles had the necessary credentials to offer rides for compensation. Mr. Bowser testified that there are a limited number of certificated motor carriers in Allegheny County, and “none of them were on my list,” he said of the Uber drivers. He said he did not observe any of the PUC-required credentials on any of the Uber vehicles.

The PUC should grant the cease-and-desist order because allowing Uber to continue to operate outside of PUC oversight is a “recipe for disaster,” Mr. Bowser testified. He later repeated that assertion during the Lyft hearing.

And Mr. Swindler echoed that sentiment in his closing argument. Uber should cease operations “because something disastrous could happen,” he said.

During cross-examination, Uber attorney Karen O. Moury of the Harrisburg office of Buchanan Ingersoll and Rooney questioned whether the PUC had demonstrated that irreparable harm would come about if the emergency cease-and-desist order were not granted. She asked Mr. Bowser if he had witnessed any safety violations in Uber vehicles; he said he had not.

During the Lyft hearing, attorney Adeolu Bakare of Harrisburg-based McNees Wallace & Nurick noted the company has an application pending before the PUC for a license to begin experimental service in Pennsylvania. Uber does, as well.

Prosecutor Stephanie Wimer asked in her direct examination about specifics of Lyft’s service and presented a receipt Mr. Bowser had received. It showed he was charged $11 for an 18-minute trip of 1.9 miles, with a “happy hour” discount of $2. “The charge appears to be based on time and mileage,” Mr. Bowser said.

But Mr. Bakare pointed out during his cross-examination that Lyft passengers make “donations” to drivers for rides, and that within the app the amount passengers could offer was adjustable. “So your testimony that Lyft charges a set amount for rides is somewhat unclear,” Mr. Bakare said.

If the cease-and-desist petition is granted, the PUC board of commissioners would have to vote on whether to accept it at its July 9 hearing.

Kim Lyons: klyons@post-gazette.com or ​412.263.1241. On Twitter: @SocialKimLy.

Kim Lyons: klyons@post-gazette.com or 412.263.1241. On Twitter: @SocialKimLy First Published June 26, 2014 2:03 PM

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