HMS Legal Blog

Uber Update – PUC Upholds $11M Penalty

Last week, the Public Utility Commission (PUC) sustained the $11 million fine it imposed against ride-sharing service Uber, voting 4-1 to deny reconsideration of its May 2016 order imposing this penalty against Uber for its unprecedented number of violations of PUC regulations, including operating without PUC authority via a certificate of public convenience.  

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Commission Sets Precedent to Extend Uber’s and Lyft’s Authority to Operate in Pennsylvania

            On June 30, 2016, at its most recent public meeting, the Pennsylvania Public Utility Commission (“Commission”) set a precedent important to Pennsylvania Uber (operating in Pennsylvania under its subsidiary Raiser-PA) and Lyft users alike by granting Yellow Cab Company of Pittsburgh, Inc. (“Yellow Cab”), a temporary extension of one year of operating authority to provide Transportation Network Service (“TNC”) in Pennsylvania.[1] Although Yellow Cab may no longer be a household name like Uber and Lyft, the service that it provides is identical. In fact, Yellow Cab was the first Transportation Network Service (“TNC”) or app-based transportation provider that was granted temporary authority to operate in Pennsylvania.[2] But under the Commission’s regulations, TNC authority is considered “experimental” and therefore is temporary and only valid for two years.[3] Yellow Cab was granted authority to operate beginning in July 2014 and without the Commission’s June 30th Order, it would have been required to cease operating on July 1, 2016.

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PUC Gives Uber a Chance

On Thursday, July 24, the Pennsylvania Public Utility Commission decided on a way forward that will allow App-based transportation networking services Uber and Lyft to continue operating in Pittsburgh while the Commission decides whether and how to grant them permanent authority to operate. The Commission granted Emergency Temporary Authority (“ETA”) for the entities to operate experimental transportation networks in Allegheny County and simultaneously granted Commission prosecutorial staff petitions ordering the entities to cease and desist operations.  The net effect is that the Commission has determined on a preliminary basis that Uber and Lyft have been operating illegally (i.e., before their applications to provide transportation service were granted), but has also allowed them to continue operating (in compliance with strict ETA requirements) while their pending applications are being considered by PUC ALJs. Moreover, during their operation under ETA, the Commission directed that the entities maintain insurance higher than the minimum required by the relevant regulations and imposed eligibility restrictions on vehicles that offer transportation service.

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