UberX and Lyft brought in $53 million while legal in Philly

For 11 weeks this year, UberX and Lyft operated legally in Philadelphia, and during that time business was very good for the newcomers to the transportation game.

Together, the two businesses reported more than $53 million in gross revenue from July 14 to Sept. 30, according to tax numbers released by the Philadelphia Parking Authority. Uber is by far the dominant of the companies, with its revenue of $42.1 million accounting for almost 80 percent of the reported income. Lyft reported $11.5 million during the almost-three-month period.

A source with knowledge of their operations said the businesses were averaging 59,000 rides a day in Philadelphia during that time. Uber and Lyft would not confirm.

The revenue numbers were available because the companies began paying a 1 percent tax on each ride in July after the General Assembly approved a temporary authorization for ride-hailing apps in the city. Two-thirds of that money went to the Philadelphia School District, about $356,583, and a third, $178,769, to the PPA.

The temporary authorization expired at the beginning of the month, and on Tuesday the House is expected to consider a long-gestating bill to permanently legalize the industry in Philadelphia. The larger-than-expected revenue is leading to calls for Uber and Lyft to share more with the PPA and School District.

"Given the revenue numbers, a higher percentage than 1 percent is certainly appropriate," said Brian Abernathy, a deputy managing director with the city.

Negotiators working to complete the state legislation are looking at the possibility of increasing the tax rate on ride-hailing apps, he said. A copy of an amendment to the bill obtained by the Inquirer showed the legislature was considering an increased tax rate, up to 1.4 percent. Uber would not agree to a rate higher than that, though, spokesman Matt Wing said, suggesting a higher tax rate was being pushed by the PPA and would ultimately take money from riders' pockets.

"Any tax increase ultimately hurts riders who face higher fares and drivers who face a loss of business," Wing said. "It is time for Harrisburg to pass the ridesharing legislation that has previously passed the Senate and reject any attempt by the PPA to extort as more money from riders without any real justification of what they need it for."

The PPA has said it would need $4 million as year to regulate ride-hailing apps effectively. The PPA's spokesman, Martin O'Rourke, would not comment on whether the authority was pushing for a higher tax rate.

Any tax increase could be a boon for the School District, said Helen Gym, a City Council member, who has been vocal about ensuring the district benefits from ride-hailing apps' legalization.

"At a time when we are working hard to guarantee basic staffing in all schools, an increase in a few million dollars could be life-changing for students whose schools lack sufficient guidance counselors and nurses, and a full complement of teachers and programs," she said.

Uber Technologies Inc. noted that its UberX drivers, about 12,000 in the Philadelphia region, typically keep 80 percent of the revenue from receipts. Uber and Lyft would not discuss their profits, but Uber in particular has tended to subsidize its services in order to attract customers and incentivize drivers. It devoted $2.5 million to beefing up its UberPool service this summer, and covered the difference for drivers when it offered a 40 percent discount to passengers who took UberX to or from certain SEPTA stations in the suburbs. The San Francisco-based company is valued at up to $68 billion, but in August Bloomberg reported Uber had lost $1.27 billion in the first half of this year, and up to $4 billion since it was founded seven years ago.

The PPA's tax revenue numbers also reveal the damage ride-hailing apps have done to the taxi industry since debuting in October 2014. From July through September 2014 taxis reported about $30 million in revenue. During the same period this year, while UberX and Lyft were recording $53 million in revenue, cabs' gross receipts came to $21.5 million, the PPA reported.

Both the Democratic National Convention and a major disruption in rail service due to flaws in a third of SEPTA's rail cars occurred during the period covered by the temporary authorization, but even with the increased business that may have been created by those events, the revenue numbers suggest the two companies are outperforming expectations in Philadelphia.

Earlier this year, a battle over taxes generated by the industry led to the conclusion that UberX and Lyft would not get anywhere near an annual revenue of $235 million in the city. Based on the PPA numbers, if the companies' incomes were to hold steady for a 12-month period, they would earn more than $250 million.

Uber would not discuss the revenue numbers, but Lyft spokeswoman Chelsea Harrison did address the revenue in a statement. "Lyft continues to grow quickly in Philadelphia," she said.