Uber and Friends Pressure Pennsylvania PUC to Reconsider $11.4 Million Fine

After political and business leaders have urged the PUC to lighten up on a fine issued to Uber earlier this year, the commission voted to conduct a rehearing of its decision.

by Andrew Maykuth, The Philadelphia Inquirer / June 10, 2016
Uber CEO Travis Kalanick Flickr/OFFICIAL LEWEB PHOTOS
Uber CEO Travis KalanickFlickr/OFFICIAL LEWEB PHOTOS

(TNS) -- Under pressure from Uber's allies to ease up on an "innovative" business, the Pennsylvania Public Utility Commission, voted Thursday to reconsider its record $11.4 million fine against the ride-sharing service.

The PUC voted, 4-0, to conduct a rehearing of its April 21 decision to fine Uber for operating without a license in 2014.

It also extended the deadline for Uber to pay its fine until the reconsideration process is completed. No schedule was set for the rehearing.

The PUC's Bureau of Investigation and Enforcement, which had recommended a bigger fine against Uber for ignoring cease-and-desist orders until it was licensed, defended the penalty as "an appropriate reaction to Uber's defiant corporate culture."

But political and business leaders have urged the PUC to lighten up.

Gov. Wolf, Pittsburgh Mayor Bill Peduto, and Allegheny County Executive Rich Fitzgerald noted that Uber had chosen Pittsburgh as the home for its Advanced Technology Center to explore self-driving vehicles.

"We hope that the PUC would use its considerable powers to encourage the sharing economy in Pennsylvania," they said. "Unfortunately, this substantial fine sends the wrong message about the business climate for innovation in the commonwealth."

The PUC also received letters from Gene Barr, president of the Pennsylvania Chamber of Business and Industry, and Pittsburgh business leaders.

In April, the PUC voted, 3-2, to assess the penalty, five times greater than its largest previous fine. The dissenting commissioners, Robert F. Powelson and Pamela Witmer, said the fine did not reflect Uber's more recent efforts to comply with regulators.

Uber, which may appeal the PUC's order to Commonwealth Court, called the decision excessive, unconstitutional and inconsistent with other PUC fines for more serious violations, including fatal utility accidents.

Uber's lawyer, Karen O. Moury of Buchanan Ingersoll & Rooney, said in her arguments that the fine exceeded the PUC's $250,000 penalty against its rival Lyft, for similar violations.

She said Uber offered to settle the case last year for $399,000

The PUC assessed the $11.4 million fine on the basis of 122,998 rides Uber provided during six months in 2014. Uber said the fine exceeded its total revenue, which amounted to an average $1.40 share for each fare.

It said a fairer calculation would be to assess a $1,000-per-day fine totaling $187,000.

©2016 The Philadelphia Inquirer Distributed by Tribune Content Agency, LLC.