Ridesharing in Pennsylvania

Norma LevyJanuary 20, 2015

I. The Pennsylvania Market

A.Pennsylvania Public Utilities Commission (PUC) regulates taxis and limousines throughout Pennsylvania, except for Philadelphia

B. Philadelphia Parking Authority (PPA) regulates taxis and limousines in Philadelphia

II. Uber and Lyft’s Entry into Pittsburgh (Allegheny County)

A. Uber and Lyft entered the Pittsburgh area in or about mid 2014.

B. In July 2014, two Pennsylvania PUC ALJs ruled that Uber

and Lyft cannot operate in Pittsburgh, effective immediately, without proper authority from the Pennsylvania PUC. C. Later that month, five PUC Commissioners voted to grant

Uber and Lyft temporary authority to operate in areas other than Philadelphia County, but only if they provide primary insurance to their drivers.

D. In November 2014, the PUC granted Uber an

experimental two year license, despite the opposition of the Insurance Federation

E. This approval does not apply to Philadelphia.

III. Uber’s Entry into Philadelphia

A. On October 17, 2014, Uber began providing ridesharing services in Philadelphia.

B. The entry occurred after a major insurer of taxis became insolvent and about 478 of Philadelphia’s taxis were temporarily

grounded. C. The PPA, finding this entry unauthorized, reportedly began

impounding cars and issuing $1,000 fines, claiming Uber cars are unlicensed taxi medallions.

D. Uber is continuing to provide its service in Philadelphia.

IV. The Pennsylvania Insurance Anomaly

A. Ironically, Philadelphia and Pennsylvania taxis carry much less insurance coverage than those in other cities and less in some or all respects than Uber.

B. Uber claims it is providing $1 million in primary coverage when a passenger has been assigned, and primary coverage in some amount for the initial period when the app is turned on but no ride has been assigned.

C. But the minimum insurance requirement for taxis in Pennsylvania is very low: $15,000 per injured person and $30,000 per accident

-- unchanged since 1974.

$20,000 / $40,000 Boston

$30,000 / $60,000 Baltimore

$100,000 / $300,000 New York City & Los Angeles

$350,000 Chicago

$500,000 Dallas

IV. The Pennsylvania Insurance Anomaly, Cont.

D. This Compares unfavorably with taxi minimums in other cities

V. Philadelphia Taxicabs Sue Uber

A. In December 2014, 45 Philadelphia taxi companies sued Uber in federal court. B. They complain Uber is engaging in unfair competition and a racketeering enterprise in

violation of the RICO statute and state law, causing loss of sales, reputation damage, and a decrease

in the value of a Philadelphia medallion that costs about $520,000.