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PUC hits Uber with $11.3 million fine for operating without a license

HARRISBURG, Pa– The Pennsylvania Public Utility Commission (PUC) has finalized penalties against Uber Technologies Inc. and its Pennsylvania subsidiaries (colle...

HARRISBURG, Pa– The Pennsylvania Public Utility Commission (PUC) has finalized penalties against Uber Technologies Inc. and its Pennsylvania subsidiaries (collectively, Uber) for operating without Commission authority from February to August 2014 and for failure to respond to discovery requests, resolving a formal complaint filed by the PUC’s independent Bureau of Investigation of Enforcement (I&E).

The Commission voted 3-2 to adopt a Joint Motion by Chairman Gladys M. Brown and Commissioner John F. Coleman Jr. that directs Uber to pay a civil penalty of $11,364,736, reducing a recommended fine by presiding PUC Administrative Law Judges (ALJs).

“We find that the recommended fine should be reduced to $11,364,736 for two reasons. One, Uber has modified its internal practices to comply with the Commission imposed conditions on its current authority. Two, Uber and its affiliates have not demonstrated any significant compliance problems since the grant of emergency temporary and later experimental authority,” said Commissioner Coleman in the Joint Motion. “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.”

Commissioners Robert F. Powelson and Pamela A. Witmer dissented and issued statements regarding the amount and calculation of the civil penalty.

“I believe the recommended civil penalty is egregious, especially when compared to other cases in which the Commission has assessed substantial civil penalties for violations of the [Public Utility] Code,” said Commissioner Witmer. “Several Commission cases wherein we assessed substantial civil penalties involved incidents of serious bodily injury, fatalities, significant property damage and/or patterns of unsafe businesses practices that jeopardized public safety. I think these prior cases should instruct the civil penalty assessed in the instant case and guide us to a more measured and reasonable outcome.”

“Uber’s operations as a motor carrier without a license constitute a serious violation of the Public Utility Code that warrants a substantial civil penalty,” said Commissioner Powelson. However, when determining the penalty amount, the Commission cannot overlook the existence of several mitigating factors in this case, such as the minimal actual harm that resulted from Uber’s operations, as well as Uber’s current compliance with PUC orders and continuing willingness to meet Commission directives.”

Uber in PA: Timeline

Rasier LLC (Rasier) launched the Uber app in Allegheny County on Feb. 11, 2014, beginning its transportation network service without Commission authority.

On April 14, 2014, Rasier-PA LLC (Rasier-PA) filed an application for a Certificate of Public Convenience for two-year, experimental authority throughout the Commonwealth, excluding the City of Philadelphia, in which taxis and transportation network companies (TNCs) are regulated by the Philadelphia Parking Authority.

On June 5, 2014, I&E filed a formal complaint against Uber, Rasier, Gegen LLC and Rasier-PA (collectively referred to as Uber) alleging that the companies were operating as brokers of transportation – or transporting passengers by motor vehicle for compensation – in Pennsylvania without proper Commission authority. I&E amended its complaint on Jan. 9, 2015, proposing a civil penalty of $19 million and an additional $1,000 per day of unanswered discovery requests.

On July 1, 2014, PUC ALJs issued a cease-and-desist order against Uber. Uber continued to operate and applied for emergency temporary authority (ETA) in Allegheny County.

On July 24, 2014, the Commission granted Rasier-PA’s application for ETA, contingent upon its compliance with explicit conditions related to vehicle safety, driver integrity and insurance protections. Upon demonstrating compliance, the ETA effectively lifted the cease-and-desist order and allowed Rasier-PA to operate as a TNC in Allegheny County for 60 days, effective Aug. 20.

On Oct. 17, 2014, the Commission granted Rasier-PA an extension of its ETA until the Commission’s determination on Rasier-PA’s application for two-year, experimental authority.

On Jan. 29, 2015, the Commission approved an application granting Rasier-PA a two-year Certificate of Public Convenience for experimental service to operate throughout Pennsylvania.  Rasier-PA’s experimental authority is valid until Jan. 29, 2017.

On Nov. 17, 2015, PUC ALJs issued an Initial Decision imposing a civil penalty of $49.9 million.

Today, the Commission approved a civil penalty of $11,364,736.

The Commission continues to emphasize that a legislative solution is the best long-term answer for regulation of TNCs in Pennsylvania.

“We recognize that the service provided by transportation network companies is very popular with consumers and is meeting a need that incumbent passenger carriers were not providing,” said Commissioner Coleman. “Accordingly, we are pleased that new transportation options are available to customers throughout this Commonwealth. We look forward to working with our colleagues and the Pennsylvania General Assembly in crafting a regulatory scheme that serves the public interest in safe, modern and affordable passenger transportation services in this Commonwealth.”



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