Uber and Lyft poised to return to legal limbo in Philly

Starting Saturday the ride-hailing businesses Uber and Lyft are likely to go back to being rogue operations in Philadelphia.

The state legislation that gave them temporary authorization to operate in Philadelphia in advance of the Democratic National Convention this summer expires Friday night. Wednesday was the legislature's last session this week and its last chance to act before the expiration.

Whether Philadelphians will notice a difference or care, though, is unclear.

Lyft and Uber will continue operating in Philadelphia with or without state legislative approval, representatives from the two companies said Wednesday. Friday's deadline will essentially return ride-hailing app activity in Philadelphia to the legal limbo it occupied since debuting in late 2014.

The Philadelphia Parking Authority, which has oversight of Uber and Lyft in the city, wouldn't say how it will handle the ride-hailing app business in the city if the authorization expires.

"The PPA will act in a manner consistent with the best interests of the public," said Martin O'Rourke, the authority's spokesman, Wednesday. "We remain committed to working with all parties involved to quickly resolve this issue and will place a priority on ensuring the safety of all passengers."

Uber began operating its most popular service, UberX, in October 2014 and ignored the PPA's claims to authority over them. Lyft entered the market a few months after. Despite sting operations to nab drivers, the service took off in Philadelphia and thrived for more than a year and a half as an unregulated, illegal industry.  In July, though, the PPA and the two companies reached a détente. O'Rourke wouldn't say whether the authority would return to that stance in the absence of state authorization. Uber, at least, seemed to think the status quo would hold.

"Due to the legislature's failure to act we are actively working with regulators to continue the regulated ridesharing model that is currently in place and are confident that we will be able to continue to operate in Philadelphia," said Uber spokeswoman Carlie Waibel.

While riders won't likely notice a change, the authorization's expiration will mean at least some money out of the pockets of the Philadelphia School District. The legislature's action gave the district 66.7 percent of the money collected through a 1 percent tax on Uber or Lyft rides, an estimated $1.7 million to $3.4 million after one year. The other third of the money will go to the PPA. The clock running out on the state's permission means collection on that 1 percent tax will end.

For the district, the disruption isn't going to cause any immediate problems. It wasn't clear how much money the tax was generating and no budgeting has been done that counts on that money, district spokesman Kevin Geary said. The potential revenue from ride hailing is a small percentage of the district's $2.6 billion budget, but Geary said the district would like to see permanent legislation to cement the funding source.

It's unclear when that is going to happen. Bills are written in the House and Senate, but they have hundreds of amendments now and, according to State Rep. Maria Donatucci, head of the Philadelphia delegation to the House, may be too unwieldy to pass.  She's also concerned about the taxi industry, which has been decimated by Uber's and Lyft's entries into the Philadelphia market.

"They're upset with a lot of this, and I said maybe we need to change your regulations," she said. "Maybe it's time to do an overhaul."

Taxi companies in the Philadelphia area are suing the PPA, saying it has allowed Uber and Lyft 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 seeks to have the legislature's temporary authorization declared unconstitutional and an injunction preventing the PPA from allowing Uber and Lyft to operate under the authorization's authority.

"We're seeking equal treatment," said Everett Abitbol, owner of Freedom Taxi and PHL Taxi. "The parking authority has kind of refused to enforce anything."

The PPA, a major player in the negotiations on authorizing legislation, is also facing turmoil since the abrupt departure this week of Vince Fenerty, its executive director, in the wake of sexual-harassment allegations.

Another obstruction to clarifying ride-hailing apps' legality is a short schedule between now and the November election. The state legislature has only six sessions between now and Nov. 8.

"At this point I know we're looking at it and I'm hopeful that there will be a solution, but we're approaching the end of September at this point," said State Rep. Bob Godshall, head of the House Consumer Affairs Committee.