A recent Pennsylvania court ruling means that an Uber subsidiary can operate its services in the state. The unanimous ruling upheld a Public Utility Commission decision made last year. It gave Raiser-PA LLC temporary authorization to operate statewide as an experimental common carrier.
About Experimental Common Carriers
Unlike taxi companies and limousine services, in the Commonwealth, rideshares in Pennsylvania are experimental common carriers because:
- The company does not employ the drivers
- The drivers use their personal vehicles and do not carry commercial licenses
- The business model does not conform to existing categories of carriers
Because of this classification, Uber and other rideshare companies must follow additional reporting requirements. They must provide and maintain a certain level of insurance coverage for drivers while they are “on the app,” perform extensive criminal background checks on all drivers. These companies also may only work with drivers who pass a strict driving records review.
Cab Companies Fear the Expansion
Taxi service operators first raised opposition to rideshare companies when the rideshares applied for Pennsylvania Public Utility Commission (PUC) approval in 2014. Their arguments included that, since the drivers do not carry commercial licenses, they fail to meet safety standards. They also claimed rideshare companies create “unrestrained and destructive competition.”
Two administrative law judges initially denied Rasier-PA LLC’s 2014 application to operate in Pennsylvania, but that denial did not stop the rideshare company. Rasier is currently facing $11 million in fines for operating without state authorization in 2014.
Even though PUC disapproved of Rasier’s unauthorized operation (the Commission levied the $11 million fine), it later approved the application after a de novo review, asking only that it met the strict compliance requirements set forth for other experimental common carriers.
In its first year of operation in Pennsylvania, Uber exceeded all requirements set forth by the PUC. It proved its technical and financial viability to provide high quality services in the state.
The Future of Rideshares in Pennsylvania
PUC has, to this point, only offered temporary permission for Uber and other rideshares in Pennsylvania. This does not include the Philadelphia service area. There are Uber drivers in Philadelphia, but the Philadelphia Parking Authority has, thus far, refused to offer them official permission to provide rides in the city.
Uber and Rasier-PA LLC hope to receive permanent permission to offer services statewide soon. The Pennsylvania Senate overwhelmingly passed a bill allowing Uber a statewide permit in 2015. But the bill has not yet passed the House of Representatives.
Cab companies that are worried that rideshares in Pennsylvania will allow Uber to become a monopoly and have the option to appeal the decision.