PUC approves UberX for state, not Philadelphia

HARRISBURG - UberX, the controversial ride-sharing service, won approval Thursday to operate in most of Pennsylvania, but not in Philadelphia.

The Pennsylvania Public Utility Commission, which regulates taxi and limousine service in every county except Philadelphia, overruled its staff in a split decision, deciding that UberX can operate statewide for two years, if it meets requirements for auto insurance, driver background checks, and financial reporting.

However, the order does not apply to Philadelphia, where the Philadelphia Parking Authority regulates taxi service. The PPA has been aggressively opposing UberX service, in which riders electronically summon private drivers in their personal cars.

"That line has been drawn. They have their own regulatory regime in Philadelphia," PUC Chairman Robert Powelson said. "And I think the Parking Authority has done a good job."

Vince Fenerty, executive director of the Philadelphia Parking Authority, a state agency, said in a statement:

"Today's decision by the PUC has no impact on the PPA's enforcement strategy against hack taxi operations in the city. Unlike all other municipalities in the Commonwealth, Philadelphia has an existing legislatively mandated medallion taxi cab system.

"Until such time as the legislature deems it necessary or appropriate to change the existing law, the PPA will continue its enforcement operation against hack taxis in the city."

The decision by the PUC is certain to increase pressure on city and state officials to find a way to legally provide Philadelphia consumers with the same ride-sharing service now authorized for other parts of the state.

The "innovative" ride-sharing service "should be encouraged in a way that is consistent with the [PUC's] mission to both protect the public interest and foster new technologies," Powelson said in a statement, joined by Commissioner Pamela A. Witmer. The decision will "allow this exciting new business model to thrive in the Commonwealth, while at the same time ensuring that the necessary public protections are in place."

In dissenting in the 4-1 commission vote, Vice Chairman John F. Coleman Jr. said he believed Uber would not follow insurance or safety rules: "I do not believe the applicant will take the necessary steps to ensure its service is safe and reasonable until it is forced to do so by a court of this commonwealth or as a result of legislative action."

Coleman said he believed a court battle "is inevitable . . . so let's go there."

In authorizing Uber service, the other commissioners also voiced their frustration with the company's repeated failure to obey PUC orders in operating without prior authority and failing to comply with insurance and financial reporting rules.

"This is your last chance with this commission," said Commissioner James H. Cawley, who criticized Uber's "anarchist" business model of first entering a market and then seeking permission. "The next step will be the Commonwealth Court . . . and you can see where you get with thumbing your nose at a court of law."

Powelson also told Uber the decision was a final opportunity to follow PUC rules: "To quote the great Taylor Swift, 'I'm exhausted.' "

The PUC said Uber has 30 days to comply with requirements on providing insurance information to drivers and requiring the drivers to notify their private insurance carriers, provide trip and financial data, and submit to driver background checks and vehicle safety inspections.

Uber spokesman Taylor Bennett said: "The PUC confirmed today that Uber provides the safe and reliable rides that Pennsylvanians need and deserve. We look forward to working with the PUC and the state legislature to get the details right so we can establish a permanent home for UberX ridesharing in all of Pennsylvania."

Another Uber service, Uber Black, legally provides on-demand limousine service in Philadelphia and elsewhere in the state, complying with regulations on insurance, inspections, and licensing. The battle in recent months has been over UberX, the cheaper service that connects riders with private car owners who want to earn extra money.

Powelson said Thursday the new ride-sharing operations such as UberX were a response to consumer dissatisfaction with existing taxi services.

"If the monopoly taxi industry were doing such a good job, we wouldn't be having this conversation," he said.

"[But] the service is ahead of the regulatory curve. . . . We have a legislative void, and we're trying to provide a pathway forward."

"It's time for Uber to belly up to the bar and demonstrate a willingness to work with the commission," Powelson said.