Gov. Tom Wolf joined Pittsburgh Mayor Bill Peduto and Allegheny County Executive Rich Fitzgerald in criticizing an unprecedented $11.3 million fine against Uber issued by the state, warning of a “chilling effect” the penalty could have on technology companies and future innovation.
In a letter sent to the Pennsylvania Public Utility Commission — which voted 3-2 last month to fine the ride-share company for operating without its authority for several months in 2014 — the three officials appealed on Uber’s behalf for fairness. While Uber deserves a fine for violations of the state code, they warned the fine could stifle economic growth in the 21st century.
“Decisions like this unprecedented fine against Uber will make it difficult for Pittsburgh and other cities to attract technology companies to our state and have a chilling effect on the new economy we are trying to build in Pennsylvania,” the letter reads.
It noted the fine, the highest in the utility commission’s 79-year history, substantially surpasses the$250,000 fine issued to rival ride-sharing company Lyft for similar violations stemming from 2014.
The officials said when the two San Francisco-based ride-sharing companies moved into Pennsylvania — and during the time they violated a cease-and-desist order from the commission — they were “welcomed here with open arms.” Because those emerging companies “do not fit neatly into the existing regulatory regime,” the letter said, the PUC should consider leniency as it addresses how to craft rules to adapt to the changing nature of transportation.
“While the people of Pittsburgh and Allegheny County welcomed Uber and Lyft to the region, the PUC’s action sends just the opposite message,” the letter reads.
At the commission’s April 21 meeting, two commissioners, Pamela Witmer and Robert Powelson, voted against the fine, calling it “egregious” for a company that had shown little evidence of harm to the public. They pointed out the commission has fined natural gas distribution companies $500,000 for explosions that caused loss of life and property.
In her dissenting statement, Ms. Witmer wrote that Uber has “provided an immediate and substantial benefit to customers as a competitive alternative.” Mr. Powelson questioned whether there was “fair and equitable treatment” given the much lower penalty assessed to Lyft.
Uber and Lyft, as well as Yellow Cab of Pittsburgh’s zTrip, have been legally operating in Pittsburgh under temporary licenses from the PUC set to expire this year. The House Consumer Affairs Committee is scheduled to vote Wednesday morning on a long-delayed bill that would give ride-sharing companies permanent authority to operate in Pennsylvania.
Daniel Moore: dmoore@post-gazette.com, 412-263-2743 and Twitter @PGdanielmoore.
First Published: May 3, 2016, 2:01 p.m.
