Uber and Lyft’s gutting of the city cab industry and the legislation that made ride-sharing legal have cost the Philadelphia Parking Authority money and personnel, leading to regulatory chaos, officials said Friday.
With only eight inspectors — down from 12 — and an additional 22,000 vehicles from Uber and Lyft to manage, the PPA has been receiving an increase of complaints of cab drivers refusing to take credit cards and not turning on their meters so they can overcharge people, the authority reported.
In the PPA’s Taxicab and Limousine Division, responsible for regulating cabs, limos, and ride-share vehicles, a dozen positions left open through attrition have not been filled and a total of seven people were laid off. The losses in the last year include administrative staff, mechanics who do vehicle inspections, and the four inspectors, whose responsibilities include street patrols, investigating complaints, training cab drivers, and overseeing inspections, the PPA reported.
“I’m embarrassed for it because that really does chase people away,” said Ron Blount, president of the Taxi Workers Alliance of Philadelphia. “When they get hosed like that, they’ll never take a taxi again.”
A PPA inspector was once a fixture at events at the city’s arenas and stadiums, he said.
“We haven’t even seen them on the street anymore,” Blount said. “It’s become really deregulated. People are doing whatever they want to do.”
The authority received about 500 consumer complaints about taxis during the fiscal year that ended in June. That’s comparable to the previous year’s complaints, even though the approximately 1,500 cabs operating in the city total 100 fewer than a year ago, and fewer rides were taken, said Christine A. Kirlin, director of the Taxicab and Limousine Division. The PPA received 142 complaints about Uber and Lyft.
The lack of oversight in the city has concerned State Rep. John Taylor (R., Phila.) enough that he’s floated the idea of returning responsibility for cabs, limos, and ride-sharing to the Pennsylvania Public Utility Commission, which handles the task everywhere in the state except Philadelphia.
“Obviously right now the Parking Authority cannot perform this function with the funds they have,” he said.
The PUC was responsible for overseeing livery services in Philadelphia until 2005, and isn’t eager to resume the job.
“The commission has concerns about regaining authority over transportation services in Philadelphia, due to infrastructure restraints,” the PUC said in a statement. “The commission supports the jurisdiction to remain under the Philadelphia Parking Authority.”
Legislation would be required to return enforcement to the PUC, Taylor said.
Last year the PPA anticipated the budget shortfall that led to staff cuts. Before legislation gave the PPA oversight of ride-sharing, the authority said it would need about $4 million to do the job properly. It got far less, in part due to a tug of war over funding between the PPA and the Philadelphia schools. The tax on Uber and Lyft doesn’t generate enough money to make up for the revenue lost from cabs. That loss was deepened by a reduced assessment on taxis that was mandated by the legislation.
The Taxicab and Limousine Division fell far short of its fiscal year 2017 budget, bringing in about $780,000 of the $3 million it anticipated from assessments on taxi cabs. The total budget for the division in fiscal 2017 was $8.6 million, and that has been reduced by nearly half, to $4.7 million, for the new fiscal year. Along with remaining inspectors being overburdened, the loss of five mechanics has caused vehicle inspections to take much longer. The PPA is required to inspect 60 ride-share vehicles a month and 25 percent of all taxis and limos each year.
Meanwhile, the PPA has yet to establish rules and regulations to govern the conduct of ride-hailing app vehicles in the city, something it is allowed to do under the legislation that authorized ride-sharing. Public hearings are planned to determine what rules are needed, said Dennis Weldon, the PPA’s general counsel, but the lack of personnel has slowed the process.
“It’s safe to say it has an impact across the board,” he said.
Since the authorizing legislation passed, there has also been some confusion among cab owners about a 1 percent revenue assessment. About 400 of the city’s 730 taxi companies argued the assessment was on the revenue generated by leasing fees and not the revenue generated from passengers, which was the legislation’s intention. Some of the companies have simply not paid anything for the quarterly assessment, the PPA said. Taylor introduced an amendment into the state’s budget proposal that would make clear the assessment was on fare revenue, but even if that is collected the PPA still anticipates raising only about 75 percent of the $1 million anticipated for the current fiscal year.
Tax revenue from Uber and Lyft for the first half of 2017 came to about $1.8 million, a third of which went to the PPA. The rest benefits the School District.
Not everyone is convinced by the PPA pleading poor. Everett Abitbol, an owner of Freedom Taxi, said the PPA has leaned on cab companies with fees and onerous inspections for years. His industry, he said, has been devastated by the arrival of Uber and Lyft, and he has little interest in the PPA’s claims of financial woes.
“I think there was a misuse of funds at the authority,” he said. “There was a little bit of an open chest of money. Any time they needed money to further regulate the industry, they got it.”
The PPA says it is severely limited in its ability to move funds from one division to another, as its various revenue streams are allocated to specific sources, whether it’s PennDot, the city, or the School District. Even if one division, like parking enforcement, brings in a lot of revenue, that money can’t then be used to bolster the taxi and limo division.
Uber, in a statement, said it believed the legislation that authorized its operation and also established the revenue the PPA could collect was adequate to ensuring safe operation on the ride-sharing industry.
Legislators like Taylor and Rep. Maria Donatucci (D., Phila.) aren’t convinced, though. Donatucci suggested it might be necessary to reconsider the legislation governing ride sharing to address the PPA’s revenue problems. Options include changing the assessment or giving the PPA more freedom to move money among its divisions, she said.
“If it’s necessary, yes,” Donatucci said of introducing new legislation. “If we have to make this better, yeah.”