Ride-sharing company Uber should not be given a permanent license to operate in parts of Pennsylvania because it hasn’t proved that it cares about protecting either its drivers or its passengers, and it has been unwilling to comply with PUC orders and unwilling to disclose its operations while it was ignoring a cease-and-desist order from the commission.
Those were the conclusions from two Public Utility Commission administrative law judges, who recommended the full PUC deny the San Francisco company the right to operate in much of the state.
Thursday’s decision is not the final word, as the full board of PUC commissioners will take the recommendation under advisement, but it reflects the upheaval triggered by the arrival of Uber and its ride-sharing rival Lyft in the region, even among the PUC’s own internal agencies.
State officials, including Gov. Tom Corbett and PUC chairman Robert Powelson, have conceded that the services offered by the smartphone-based startups will address gaps in transportation services. The PUC has maintained all along that it is primarily concerned with public safety, while acknowledging its own rules could use updating.
Uber spokesman Taylor Bennett agreed with that sentiment. “Current regulations have failed to catch up to a 21st century economy, which is why we call on the state Legislature to take matters into their own hands and bring ride sharing to the Commonwealth,” Mr. Bennett said Thursday.
The judges’ decision hewed to the letter of the law, not the companies’ future potential or growing popularity.
“Although transportation network company service generally is of great potential use to the public, this applicant did not sustain its burden of demonstrating that it is also committed to protecting the public — both drivers and passengers,” the judges’ decision states.
The judges considered two applications during the August hearings, one seeking permanent status in Allegheny County and the other seeking to expand into other counties. Two rulings were issued, but the recommendations were basically the same.
Uber’s application to provide similar permanent service in Allegheny County should also be denied because the San Francisco company demonstrated “willful failure to comply with an order of the presiding officers,” the judges said, noting the company refused to provide details about the number of rides provided in Pennsylvania while under a July 1 cease-and-desist order.
The decisions by Judges Mary Long and Jeffrey Watson came after several weeks of hearings for Uber and its rival ride-share company Lyft, both of which are operating under emergency temporary authority in Allegheny County. The companies moved into the Pittsburgh area earlier this year before seeking PUC approval, and have tangled with the regulatory agency since.
The administrative law judges will hold hearings on Lyft’s application for a permanent license, but Thursday’s decision has no bearing on that case.
Uber is seeking to establish permanent status in Allegheny County, as well as in Beaver, Clinton, Columbia, Crawford, Lawrence, Lycoming, Mercer, Northumberland and Union counties. It filed its application for “experimental service,” which covers modes of transportation not covered under current PUC code.
Uber’s temporary authority in Allegheny County expires Oct. 21, but the company has filed a petition to extend it.
Mr. Bennett, with Uber, said Thursday that the judges’ decision “completely reinforces the critical need for state legislation that embraces innovation and gives all Pennsylvanians more choice to safe rides.”
There are several bills pending before the state Legislature that deal with ride-sharing issues, but so far none has been brought to a committee in either chamber. The PUC commissioners publicly have expressed support for a proposed bill by state Sen. Wayne Fontana, D-Brookline, which would create Transportation Network Companies, a new category in Pennsylvania, to provide oversight for the companies.
Pittsburgh Mayor Bill Peduto, who has been a staunch supporter of allowing ride-share companies to operate in the area, said Thursday he had not yet read the judges’ opinion but remained optimistic that a legislative solution may yet be achieved.
The judges’ decision on Uber’s application for the other counties outside Allegheny was the longer of the two decisions. The judges took the company to task for what they viewed as a failure to demonstrate that it had the technical fitness and financial resources to provide service.
In June, Uber reported it had raised $1.2 billion from private investors based on a $17 billion valuation. But, according to the judges’ ruling Thursday, the company provided a financial statement to the state PUC that showed a $1.3 million loss for the 12-month period ending July 2015.
Further, the company left unanswered “several crucial insurance-related issues,” the judges’ ruling states. And, Uber’s record in Allegheny County shows the company “is not likely to comply with commission regulations in the future,” based on its decision to continue operating while the cease-and-desist was in effect.
Uber has 15 calendar days to appeal the judges' decision.
The full board of PUC commissioners will then consider the matter. The commissioners can either approve, reject or modify the judges' order. The earliest the commissioners would consider the judges’ ruling would be at their Nov. 13 meeting.
Kim Lyons: klyons@post-gazette.com or 412-263-1241.
First Published: September 25, 2014, 3:04 p.m.
Updated: September 26, 2014, 2:50 a.m.
