Philadelphia Parking Authority make Uber and Lyft illegal again

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Uber and Lyft signs in a car window. The ride-hailing apps will be treated as illegal once again by the Philadelphia Parking Authority, though Uber stated it would continue providing service in the city.

The Philadelphia Parking Authority will again begin treating UberX and Lyft as illegal car services, according to a statement from the agency released Tuesday evening.

"The PPA is providing 48 hour notice that it will resume enforcement against illegal TNC [transportation network company] service in Philadelphia," a statement from Corinne O'Connor, the PPA's deputy executive director, stated.

The move comes four days after the General Assembly's temporary authorization of ride-sharing companies expired. In addition, the PPA is relaxing regulations that taxicab company owners and drivers say have made it impossible for them to compete with ride-hailing app drivers. The changes bring PPA policy in line with state law, said Dennis Weldon, the authority’s general counsel, and allow the taxi industry to adjust to a changing market.

“Clearly we have to regulate taxicabs differently, because clearly the market has changed,” he said.

The taxicab industry, meanwhile, hailed relaxed regulations as a needed step to create parity between the traditional industry and the high-tech newcomers, said one cabdriver advocate.

“I would say that we’re halfway there now,” said Ron Blount, president of the Taxi Workers Alliance of Philadelphia. “For the taxicabs there’s some relief.”

Both Uber and Lyft, the major ride-hailing app companies operating in the city, said the announcement highlighted the need for guidance from the state legislature. Uber stated it would continue providing service in the city despite the PPA’s decision.

The changes, which were announced in the statement released at 6:32 p.m., were prompted in part by a lawsuit cab owners brought against the Parking Authority. The suit alleged the authority allowed UberX and Lyft, and their related pool services, to operate with minimal oversight while levying heavy fees on cabs that provide essentially the same service, making it impossible for them to compete. The suit stated cab owners’ revenue has dropped 50 percent from 2015 to present. Cab medallions, meanwhile, were worth $545,000 in July 2014. Bidding for medallions this month is expected to begin at $10,000, the suit stated.

The parties have been before U.S. District Judge Michael Baylson this week over a request for a preliminary injunction against the PPA. As part of those hearings Baylson on Tuesday asked for a clarification of the PPA’s position toward Uber and Lyft, lawyers for the plaintiffs and the PPA said. Discussions about the injunction also brought to the judge’s attention the regulations that govern cab operations in the city.

Brett Berman is representing a collection of plaintiffs who own 1,000 of the city’s taxicab medallions, and felt the information presented so far persuaded the PPA to make regulatory changes.

“It was a pretty good few days of hearings for the taxi industry,” he said.

He also described the PPA’s announcement as a step in the right direction, but not a total solution. The suit alleges a failure to provide equal protection, and that remains unresolved, he said.

“The goal here is not to shut Uber and Lyft out of the city of Philadelphia,” Berman said. “The goal here is to treat us equally.”

Among the relaxed conditions, the city’s 3,370 cab rivers can get rid of the shields between passengers and the front of the cab as long as they have a camera system installed. Vehicle mileage limits will be raised from 250,000, which a typical cab will exceed in two and a half years, to 350,000. Some inspection requirements will be dropped until a vehicle has traveled 200,000 miles.

The regulatory changes also will allow cab companies more freedom to embrace technology. Drivers will no longer be required to have two-way radios. Most dispatch is done by computer now, Blount said, making radios redundant. The PPA also opened the door to allow cab companies to select different credit-card transaction processors. The ones currently required take 5 percent off each credit-card payment, Blount said, more than is standard in retail. The changes are expected to be approved at the authority's Oct. 25 meeting.

The PPA also will be open to changing other regulations in the coming months, Weldon said. 

The PPA said the judge’s influence was only partially responsible for the policy changes.

“Clearly we have to regulate taxicabs differently, because clearly the market has changed,” said Weldon. “The economic realities are that eventually Uber and Lyft are going to be legal and taxicabs are going to be legal, and we need to regulate them in a way that will allow them to thrive.”

Announcing enforcement against UberX and Lyft, meanwhile, was inevitable since the legislative umbrella they were operating under expired, he said.

Along with the legal action from cab owners, the PPA has faced scrutiny over allegations of sexual harassment against Vincent Fenerty, the executive director who resigned last week. Those allegations have led to plans for an independent audit of the authority.

The assembly's temporary authorization, which allowed Uber and Lyft to operate in Philadelphia under the cover of law, came just in time for the Democratic National Convention in July, but covered only three months. The General Asembly is not meeting again until Oct. 17 and it was unclear when another authorization may pass.

The PPA statement did not say how the authority would enforce restrictions against ride-hailing app businesses, but in the past it conducted sting operations to ensnare drivers in the city. Ride-hailing apps operate legally throughout the rest of Pennsylvania under a separate authorization from the Pennsylvania Public Utility Commission that expires at the end of the year. The PUC controls private car service everywhere in the state except in Philadelphia.