Pennsylvania Regulator Approves $3.5M Uber Settlement

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By Leslie A. Pappas

The Pennsylvania Public Utilities Commission voted 4-1 April 6 to approve a $3.5 million settlement with Uber Technologies Inc., reducing a record-breaking $11.4 million fine ( Uber Techs. Inc. v Pa. Public Utility Commission , Pa. Commw. Ct., No. 1617 C.D. 2016, stayed 3/28/17 and Pa. Pub. Util. Comm’n v. Uber Technologies Inc. , No. C-2014-2422723, settlement 4/6/17 ).

The settlement would resolve the commission’s dispute with Uber over the fine, which was levied on the ride-hailing company for operating in Pittsburgh from February to August 2014 without proper approval. The case, which had gone to Pennsylvania’s Commonwealth Court, was stayed March 28 for settlement discussions.

The PUC did not say whether Uber has signed the agreement, or if the settlement is subject to court approval. The full text of the agreement was not immediately available. A spokesman for Uber did not immediately reply to a request for comment.

The utilities regulator imposed the fine in April and upheld its decision in September, despite pleas from the state’s governor, business leaders and others to reduce it.

Calling the PUC a “five-headed monster that doesn’t speak with one voice, nor should it,” Commissioner David W. Sweet voted to approve the settlement, noting that “rarely are the settling parties happy on either side.”

“Some thought the porridge was too hot, some thought it was too cold. I think we’ve got it just about right at this point,” Sweet said.

Commissioners Have Different Views

Commissioner John F. Coleman, Jr., who voted against the agreement, said $3.5 million “is too low” for Uber’s “record number of violations” of more than 123,000 rides. The settlement amounts to about $28 per violation, whereas the commission usually imposes fines of $250 to $1,000 for a single violation, he said.

“A larger settlement would have served as a stronger deterrent,” Coleman said, adding that he remained “concerned about future compliance.”

Commissioner Robert F. Powelson, on the other hand, said the $3.5 million penalty was still too high, calling it “excessive” and “disproportionate to the violation.” Previously, the highest fine ever imposed by the PUC was $1.8 million on an electric supplier for engaging in deceptive practices that hurt consumers, he said.

“Uber’s activities did not harm one consumer here in Pennsylvania,” Powelson said. “If the cab industry was doing such a great job,” he added, “there’d be no need for Uber or Lyft.”

Commission Chairman Gladys M. Brown said the settlement resolves uncertainty created after the state legislature passed Act 164 of 2016, which limits penalties the commission can impose on ride-hailing transportation companies to $250,000.

While the legislation doesn’t specifically say that it should be applied retroactively to the Uber case, it is not certain how the Commonwealth Court would have interpreted the law, she said.

To contact the reporter on this story: Leslie A. Pappas in Philadelphia at LPappas@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

For More Information

The PUC docket in the case is at http://src.bna.com/nHB.

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