Pa. Commission Affirms $11.4M Penalty for Uber While Rejecting Appeal

PITTSBURGH (Pittsburgh Post-Gazette/TNS) -

pholding an unprecedented fine, the Pennsylvania Public Utility Commission on Thursday affirmed its $11.4 million penalty levied against Uber Technologies Inc. for giving rides in Pennsylvania without state permission in 2014.

The commission voted 4-1 to deny Uber’s appeal to reconsider the fine, which was approved in April at the end of a contentious case stemmed from the San Francisco ride-hailing giant’s first weeks in the Pittsburgh area.

Saying Uber raised no “new or novel” evidence that wasn’t in the record already, PUC Chairman Gladys M. Brown said the fine was a fair punishment when considering the violations.

“We were faced with an unprecedented number of violations by Uber,” Brown said during the meeting. “When a regulated entity is given notice that it is violating the law and it ignores those notices, it does so to its own detriment.”

Commissioners John F. Coleman Jr., Andrew G. Place and David W. Sweet voted along with Brown to reject Uber’s appeal. Robert F. Powelson dissented.

In a statement, Uber said it will appeal the fine in the Commonwealth Court.

“We are shocked that the PUC would compound its past mistakes and send the troubling message that Pennsylvania is unwelcoming to technology and innovation,” the company wrote.

Before the vote, individual commissioners rehashed many of the arguments for and against the amount of the penalty — more than six times the PUC’s next-highest fine and significantly more than a $250,000 settlement with Lyft in 2015 for similar violations. Powelson pointed out Uber has caused little actual harm in the Commonwealth and that it provides a useful service that customers like.

“Uber was supplying a much needed benefit to customers,” Powelson said.

Sweet, who joined the commission in June after the fine was issued, suggested he would not have supported such a large fine had he been on the governing body in April.

And while he voted to deny the appeal given that “no compelling new evidence [has been] unearthed that was unavailable during the proceeding,” he said the case gets at a bigger issue that needs to be addressed.

“While the law must be obeyed, it must also be modernized,” Sweet said. “Otherwise we’ll be in this same room again trying to put the proverbial square peg and in a round hole.”

The penalty has generated sharp criticism from state and local officials.

Shortly after the April vote, Gov. Tom Wolf, Allegheny County Executive Rich Fitzgerald and Pittsburgh Mayor Bill Peduto signed a letter to the commission calling the fine “chilling” and saying it “constitutes a civil penalty on innovation, threatening the company’s ability to harness new technologies and create the jobs of tomorrow.”

Brown said, “We reiterate and emphasize that this commission supports TNC models,” using the acronym for transportation network companies — an umbrella term for ride-hailing services that includes Lyft and zTrip, launched by Yellow Cab of Pittsburgh.

That’s why the commission granted Uber, Lyft and zTrip temporary licenses at the end of 2014, she said, under which the carriers have been operating since. The commission is encouraging the General Assembly to approve legislation that would allow the commission to grant permanent authority, she said.