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With the clock ticking down on a temporary license to operate in Pennsylvania, juggernaut ride service Uber is trying to tip the tables toward proposed legislation that would grant permanent legal operating status and, importantly, allow it to provide service in Philadelphia.
In January, the state Public Utility Commission granted two-year “experimental licenses” to Uber and its main competitor Lyft for operations in 66 of Pennsylvania’s 67 counties, excluding Philadelphia, where transportation services are under the purview of the Philadelphia Parking Authority, which has barred the services and arrested Uber drivers caught operating illegally.
State Sen. Camera Bartolotta’s Senate Bill 984 would apply statewide, and contains a 0.5 percent tax on the cost of each fare only in Philadelphia. An earlier Senate bill submitted by Sen. Wayne Fontana would exempt Philadelphia. Both bills contain provisions for record keeping, insurance coverage and driver background checks.
Uber has been soliciting petition signatures on its Pennsylvania website with a vaguely-worded letter, asking state legislators to pass legislation that would allow UberX, the company’s low-cost ride service, to operate in all of Pennsylvania.
“We believe (the Bartolotta bill) takes a smart approach to ride sharing,” said Taylor Bennett, an Uber spokesperson. “She recognizes that ride sharing is new and innovative,” and the bill “insures that Philadelphia has the same access as people in the rest of the state.”
Taxi owners and their regulators are trying to restrict alternative ride opportunities, Bennett said. “It’s an attack on consumers that arbitrarily deprives them of the benefits that ride sharing offers.”
Under the bills, nothing would change for Uber in Northeastern Pennsylvania where it began to offer service in February. Since then, Bennett said the company has signed “hundreds of drivers” and given thousands of rides. Worldwide, Uber has “hundreds of thousands of driver partners” in 61 countries, providing two million rides a week, Bennett said.
Bennett said Uber already contracts with third-party firms to conduct “stringent background checks” and holds an umbrella policy that will step in if a driver’s policy is inadequate or lapsed. Neither bill requires licensing of drivers, something Uber opposes.
“Because these are individuals, independent contractors” and many are part-time, “having to go through a licensing process doesn’t make sense for this business model,” Bennett said.
There also are no provisions to set or limit rates in the bills, allowing Uber to continue its “surge pricing” that can boost rates substantially at peak times, such as when bars close. “It’s a reaction to real-time supply and demand,” Bennett said.
Richard Fox, a spokesperson for State Sen. John Yudichak, D-Plymouth Township, said the Senate Consumer Protection and Professional Licensure Committee may take up Bartolotta’s bill within a few weeks. Yudichak is a member of the committee.
“I think generally everyone is supportive of having ride-sharing services,” Fox said, adding there have been discussions at the staff level, but it’s too soon to tell what, if any, amendments might be made to the proposal. “There’s a couple different bills but this one seems like the one the committee will focus on,” he said.
He thinks the Philadelphia delegation is trying to work through its members’ concerns. “It’s not going to affect our district,” Fox said.
Uber under fire
Uber’s model, in which subcontractors drive their own vehicles and keep about 80 percent of the ride cost, has come under fire from traditional taxi firms and many cities that contend it operates outside laws that require licensing of drivers and payment of fees or taxes. Even though it is banned from operating in Philadelphia, Uber continues to solicit riders and drivers in the city, claiming in April to have provided 1 million rides in the five-county metro area during its first six months there.
Bartolotta’s bill, which applies to “transportation network services” like Uber and Lyft, would require only that companies have PUC approval to operate; individual drivers would not need licenses, but the companies would have to perform background checks on drivers and exclude any who were convicted within the prior seven years for a range of charges, including operating under the influence, sexual offenses or crimes of violence.
The bill also would require drivers or the companies to provide first-party insurance coverage for at least $1 million for death, bodily injury or property damage occurring while on duty. The PUC would oversee compliance with the regulations.
That oversight is needed to keep a level playing field with traditional taxi services, said Robbie Burgit, owner of Burgit’s City Taxi in Wilkes-Barre. He’s troubled that the legislation as proposed does not impose any costs on companies like Uber, like the ones he pays to support the PUC.
“I have to pay PUC assessment fees, and they’re large,” Burgit said of the $22,000 he will pay to the PUC this year. The fee is based on gross revenue: “The more you make, the more they take.”
The fees, which also are paid by bus and train lines and other licensed carriers, support the PUC’s oversight activities.
“They inspect at random and they also do an annual” check on cars and driver background reports. “It’s a lot to handle but it’s worth doing” to assure that vehicles are safe, Burgit said.
“Uber should be classified as a public utility and they should be made to pay an assessment fee,” he said.
Mercedes Adames, manager of Yellow Cab of Lackawana, in Scranton, agrees.
“It is totally unfair,” she said, explaining that for taxi operators inspections are required and prices are fixed. “We even have to have a sign” and other vehicle identification, Adames said. She also said taxi services must pay workers’ compensation insurance premiums and other mandated employee costs, something Uber has avoided by calling its drivers independent subcontractors.
The proposed legislation would require Uber to maintain insurance and perform background checks, but does not spell out any schedule for the PUC to inspect them.
That could change in final form, said Fox, the Yudichak spokesperson, as the bill could be amended. Uber has agreed to pay fees in some other locations.