Uber the Unfinable

An Uber badge displayed on a driver’s windshield. Photo Credit: Kristi Petrillo.

City Councilman and Philadelphia Parking Authority (PPA) board member Al Taubenberger said Uber clients last year mistook him for an Uber driver. They hopped into his car, parked outside City Hall. Taubenberger concluded a January PPA hearing with this story.

This wasn’t the best read of a room, as hearing attendees were primarily cab drivers facing the possible destruction of their industry by Uber.

A group representing 80% of Philly’s cab industry sued PPA last year, alleging the Authority has consistently and massively failed to deal with Uber’s Philly debut. And this failure by the PPA has cost industry workers about $558 million in revenue.

Plaintiffs argue PPA has held Philly cab firms to different, stricter rules than firms like Uber in terms of inspection standards, safety and other issues. “Transportation network companies” (TNCs) like Uber also pay less tax than their traditionally run counterparts.

Pennsylvania’s Public Utility Commission initially ruled that Uber owed $50 million for operating illegally in the state. But Uber ruled in turn that pissant state bureaucrats don’t tell Uber how this stuff goes.

The Commission later reduced the fine to $11.3 million, defining Uber’s sins as administrative in nature as they’ve caused no physical harm.*

The PPA initially puffed a little about Uber’s expansion to Philly by impounding drivers’ cars and attempting to levy fines as well. According to the complaint filed by Philly cab drivers, however, Uber ultimately paid

$350,000 in exchange for the PPA’s agreement to resolve all disputes with Uber, drop an additional $700,000 in fines owed by Uber and allow Uber to operate legally in Philadelphia while the PPA works with the Pennsylvania legislature to permanently legalize TNC’s. Under the agreement, the PPA also agreed to ‘suspend all enforcement’ against Uber and its affiliates.

Uber CEO Travis Kalanick met privately with PPA’s board at least once to facilitate these negotiations.

It’s in this context that the joke about a Councilman mistaken for an Uber driver becomes an allegory. This is basically how Uber has treated local authorities: like a convenient, cost-efficient way to get where they need to go.

PPA had as of this past October collected “no fines or assessment monies from Uber,” according to deposition former PPA Chairman Vince Fenerty provided for the Philly cab industry’s lawsuit.

Taxis gather in a parking lot near the Philadelphia International Airport. Photo credit: Kristi Petrillo.

Fenerty in his deposition also said he didn’t know how many Uber or Lyft cars operated in Philly, or how many rides they provide within city limits. He denied specific knowledge of the financial losses the cab industry has sustained since Uber’s arrival.

Depositions by Fenerty and others were blocked from public access after the Declaration obtained them. The court should release redacted versions soon.

The feds have enjoyed a bit more recent success in the Uber-wrangle. They caught the firm placing deceptive advertisements. Uber placed Craigslist ads in 14 cities nationwide in which they promised higher rates than what drivers actually made, according to a complaint for a permanent injunction by the Federal Trade Commission.

The ads promised Philly Uber drivers $25 hourly: among the highest listed in any city named. Fewer than 10% of Philly drivers made the $25 hourly promised in the ads: one of the lowest promise-keeping rates to any city discussed in terms of hourly pay.

Source: Federal Trade Commission.

Source: Federal Trade Commission.

The Federal Trade Commission didn’t respond to the Declaration’s request to see the data used to evidence these claims. Uber settled the Commission’s allegations for $20 million last week.

Returning now to Philly, the PPA has adopted yet another set of temporary rules regarding TNCs in accordance with an order by Pennsylvania Governor Tom Wolf. This order legalized such firms at the state level in November of last year.

It was Wolf’s genius idea to have the PPA tax operations like Uber at 1.4% of their revenue and then put 66.6% of that into Philly’s School District, according to a House of Appropriations fiscal note. Seeing as how the PPA already owed the District $10.3 million as of March 2016, there’s no doubt this additional school funding will get where it needs to go.

After Philadelphia Business Journal claimed the PPA “came off tone deaf” at their last hearing, Councilman Taubenberger at the most recent one said he’d ride with an attending taxi driver to get their perspective on these issues.

The driver called Uber a “dictatorship in the country” at the meeting. “They’re doing whatever they can and no one can touch them. Nobody,” they added.

A taxi driver addresses the PPA’s board at their January 27 meeting.

*Update: Uber has since challenged the $11.3 million fine in Pennsylvania’s Commonwealth Court, where the issue currently remains in litigation.

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