Uber files motion to reconsider $11 million fine from Pennsylvania Public Utility Commission

By Nicholas Malfitano | Jun 8, 2016

HARRISBURG – A new filing from the ride-sharing service Uber illustrates its intention to fight the recent $11 million levied upon it by Pennsylvania’s Public Utility Commission (PUC) for allegedly operating in the state for a period of six months in 2014 without proper approval.

“Our hope is that the new information presented in this filing will give the Commissioners ample reason to reconsider the unprecedented and wholly disproportionate fine of $11.3 million fine against Uber,” company spokesperson Craig Ewer said.

“As elected officials and several business organizations have pointed out, the disparate treatment of two competitors is patently unfair and paints Pennsylvania as an unwelcome and uncertain place for new investment and innovation."

On May 25, Uber filed a motion for reconsideration to the PUC to see the issued $11 million fine reduced or eliminated entirely.

“Uber is making new data from the time period in question (Feb. 11, 2014 to Aug. 20, 2014) public as part of the filing, in the hopes that it will give the Commissioners clear evidence of just how disproportionate the fine against Uber is compared to Lyft’s,” Ewer said.

“We’re arguing that the PUC should not consider the total number of trips that took place, but rather the number of days in question in determining the amount of the fine.”

Ewer said during the time period cited by the PUC, 122,998 Uber trips were facilitated – just more than 7,000 of which were promotional and free of charge, and “should not be part of any calculation.”

Ewer disclosed Uber earned nearly $90,000 “from the period of time following the issuance of the cease and desist order on July 1, 2014 and the grant of ETA authority on Aug. 20, 2014.”

“That period of time that represents over $10 million of the amount levied against Uber, which is more than 100 times the amount of revenues we earned during that period,” Ewer stated.

“As many trips were taken by repeat riders, the PUC should consider evidence showing that 31,218 paying riders used Uber during the relevant period. In other cases the PUC has considered the number of affected customers by a respondent’s conduct.

"Also, if a rider chose to take additional trips, no basis exists for imposing a civil penalty for each subsequent trip.”

On Nov. 17, PUC administrative law judges initially recommended a fine of $50 million directed to Uber, for conducting business operations from February to August 2014 without PUC approval.

Due to consideration of Uber's cooperation with the PUC, the fine amount was later reduced to $11.3 million.

Reached after a 3-2 vote, the fine was the largest one ever issued in the PUC’s history and five times more than the largest sanction it had previously handed down.

Lyft, a ride-sharing company and prominent competitor of Uber’s, once settled a case with the PUC for similar compliance issues for approximately $250,000 – a sum 45 times less than the one Uber was charged.

In a letter addressed to the PUC, Governor Tom Wolf, Allegheny County Executive Rich Fitzgerald and Pittsburgh Mayor William Peduto roundly criticized the group for their issuance of the fine against Uber, and its perceived imbalance compared to the fine charged to Lyft for similar violations.

The letter from Wolf, Fitzgerald and Peduto read, in part, “While the state cannot condone companies that do not comply with the Public Utility Code, which exists for the protection of consumers, the recent fine goes too far, and constitutes a penalty on innovation, threatening the company’s ability to harness new technologies and create the jobs of tomorrow.”

Uber also pointed to statements from GOP leadership in the Pennsylvania House of Representatives, the Greater Pittsburgh Chamber of Commerce and the Pennsylvania Chamber of Business & Industry, espousing similar sentiments regarding the fine.

Despite praising Uber for its cooperation with the PUC, Commissioner John F. Coleman reiterated the need for the significant financial sanction.

“We find that a civil penalty of this size is necessary to deter Uber and other members of this industry from future violations of the Public Utility Code and the laws of this Commonwealth,” Coleman said.

Two members of the PUC, commissioners Robert F. Powelson and Pamela A. Witmer, dissented from the majority regarding the decision and fine.

In a separate action, the Philadelphia Taxi Association filed an antitrust lawsuit against Uber on March 15, claiming the company violated both the Sherman Antitrust Act and the Clayton Antitrust Act through operating a monopoly for public service transportation in Philadelphia, and intentional interference with contractual relationships and unfair competition.

That case remains pending.

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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