PUC approves Yellow Cab's Yellow X ride-share service

HARRISBURG — The Pennsylvania Public Utility Commission on Thursday approved Yellow Cab Co.'s application to establish an experimental service modeled after peer-to-peer ride-sharing companies, called Yellow X.

But two San Francisco ride-share companies' applications for similar experimental service licenses remain in limbo.

READ about the differences between taxis and rideshares.

An insurance agents’ group and several other taxi companies filed formal protests against the applications from Lyft and Uber, and several state senators wrote letters to the PUC expressing safety concerns about the companies.

The formal protests require the commission to hold public hearings for the applications. There were no protests filed against Yellow X's application.

Lyft and Uber X have enlisted drivers in Pittsburgh and other cities to use the drivers’ personal vehicles to offer services similar to taxis. Drivers and riders are connected only via smartphone apps. The companies have been compared to illegal jitneys by opponents, including Yellow Cab Co., the Pittsburgh area’s largest taxi company.

Yellow X drivers would take overflow calls from Yellow Cab’s dispatchers, or connect with passengers via a smartphone app, according to a company spokesman. Yellow X will have trained drivers using their own cars but Yellow Cab will inspect the vehicles, a step that it views as an extra safety measure.

The Yellow X application proposes that the company would be categorized as a new type of service in Pennsylvania, which it calls a transportation network company. Several other states have taken a similar approach to create a new class of vehicle service in order to accommodate ride-share companies.

In a statement accompanying Thursday’s PUC decision, Commissioner Pamela A. Witmer praised the Yellow X concept, writing that it "paves the way for a new and innovative type of transportation service that uses modern technology to serve the traveling customer in Pennsylvania."

Both Pittsburgh Mayor Bill Peduto and PUC chairman Robert Powelson have expressed support for amending current regulations to allow companies like Lyft and Uber to operate legally in Pittsburgh and statewide.

Lyft has argued that since its drivers are not paid, but rather receive “suggested donations” from passengers, it is not subject to the PUC regulations for passenger transportation companies requiring a certificate of public convenience. Last month, about two dozen citations were issued by the PUC to ride-share drivers for violating that very provision.

The use of personal, non-commercial vehicles seemed to be the point of contention for the formal protests filed.

The Pennsylvania Association for Justice, formerly known as the Pennsylvania Trial Lawyers’ Association, filed protests against both Lyft and Uber applications. It wrote that Uber’s request should be denied because the company "will act only as a broker and will not provide any transportation service itself." The group questioned whether Lyft’s insurance policy met state guidelines

That concern was echoed in the protest filed against Lyft’s application by the Insurance Federation of Pennsylvania, a nonprofit trade organization that represents 200 insurance companies statewide. It argues that the company’s insurance policy does not meet state requirements for passenger carriers. Lyft’s insurance policy provides backstop coverage to its drivers’ own existing noncommercial policies.

Several Western Pennsylvania state legislators also weighed in against Lyft and Uber, including Rep. Harry Readshaw, Rep. Robert Matzie, Rep. Matt Smith, Rep. Edward Gainey, Sen. Randy Vulakovich and Sen. Jay Costa.

Mr. Vulakovich’s letter outlined what he called safety concerns about ride-share companies. “These safety requirements should have been in place before these new ride-sharing companies began to operate in Allegheny County,” he wrote. “Their indifference to contacting the PUC regarding regulatory law to say the least is very upsetting to me and suggests a tone of arrogance.“

Since the Yellow X application was filed as a request for a certificate for experimental service — which the PUC statement explained is "designed to accommodate a proposed transportation methodology not already encompassed by our regulations" — it is valid for two years.

“We’re pleased with the commission’s decision and confident that Yellow X will match up well against any ride-sharing service,” Pittsburgh Transportation Group CEO Jamie Campolongo said in a statement.

Neither Lyft nor Uber representatives seemed daunted by the latest developments.

“Lyft’s peer-to-peer platform is a new, innovative model that is different from existing transportation providers,” spokeswoman Paige Thelen said in a statement. “We look forward to continuing productive discussions with state leaders to explain our commitment to safety and demonstrate the value that community-powered transportation options can bring to the people of Pittsburgh and beyond.”

Uber released a statement that it was “excited to be connecting riders and drivers in the Pittsburgh area. We look forward to continuing to improve Pittsburgh's transportation ecosystem by delivering safe, affordable and reliable transportation alternative.”

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Kim Lyons: klyons@post-gazette.com. or 412-263-1241. First Published May 22, 2014 9:33 AM

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