Regulatory Gridlock Puts Pennsylvania Ridesharing in Jeopardy


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As anyone who has tried to buy a six pack of beer in Pennsylvania knows, the state has a penchant for puzzling laws. The contention over the legal and regulatory status of ridesharing has proven no different, with government regulators playing catch-up with transportation innovations—and stifling them in the process.

In July of this year, the Pennsylvania Public Utilities Commission (PUC) slapped an immediate cease-and-desist order on the Pittsburgh operations of Lyft and Uber's uberX—the service that connects riders with private drivers who don't hold a limousine license. The order effectively banned the services across the state. The months since have witnessed a flurry of back and forth between regulators and the ridesharing companies.

At the time of the order, the PUC judges acknowledged the benefits and popularity of ridesharing, but decided to issue the order anyway on the nebulous grounds of "public safety." The PUC cited concerns about driver background checks, insurance, and inspections.

Uber then pointed out that its insurance policies and driver vetting standards are stricter than those required by the commission. In characteristic fashion, the company declared it would continue offering its uberX services anyway while it applied for licenses to operate. Lyft promised to do the same.

Thanks to this flagrant disobedience, an administrative judge ordered Uber and Lyft to hand over trip data as part of the ongoing license application process. Uber refused. 

Wisely, as it turned out. Lyft did hand over trip data during the application process. After the PUC granted temporary approval to Lyft and later Uber for operations in Allegheny County (but not elsewhere in the state), the PUC proposed a $6.9 million fine on Lyft for offering ride services during the cease-and-desist period.

The temporary approvals were both set to expire this past week, but the companies were granted extensions until the commission decided on the permanent license applications. These applications appear to be in jeopardy, however, after two PUC judges in September recommended they be denied in Allegheny County and in the rest of the state. According Jennifer Kocher, the PUC's press secretary, the commission has yet to decide on the applications and it is unknown when it will do so.

Kocher acknowledged that much of the problem stems from outdated PUC regulations that haven't caught up with the digital age. She says that "the best fix is a legislative fix, creating a separate regulatory category for transportation networks."

The current legislation on the table would redefine digital ridesharing services like Uber's uberX and Lyft as "transportation network services"—effectively bringing the services out of the umbrella of current passenger transportation regulations and legalizing them across Pennsylvania. However, the legislation seems dead in the water for now. The legislature said it would not consider it this session. Several House Consumer Affairs Committee members have said that the process has been "going too fast" and they need more time to consider.

That's exactly the problem. The ridesharing industry is growing at a remarkable clip and it's unclear why innovation should slow at the whim of angst-ridden regulators. Instead of satisfying consumer demand, companies like Uber and Lyft have to spend valuable resources fighting fines and haggling with capricious commissions. And given the PUC's hostility to the companies, this could be the new normal for a while.

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  1. …the state has a penchant for puzzling laws.

    First of all, it’s a commonwealth. Secondly, this is what happens when you employ a capital-full of assholes full-time to do a part-time job.

    1. Could someone explain commonwealth vs state for moi please?

      1. This designation, which has no legal meaning, emphasizes that they have a “government based on the common consent of the people”[5] as opposed to one legitimized through their earlier royal colony status that was derived from the monarch of Great Britain

        1. I have lobbied for years to change the name of the country to the United Commonwealths and States of America, but will anyone listen?

  2. Not only was Lyft’s compliance foolish because of the penalty, but now I am less likely to want to use it instead of Uber.

    1. The mustaches didn’t already do that for you?

  3. In Pittsburgh I have rarely used any kind of cab service but two weeks ago I found myself in need of one. I called a regular taxi and waited around for it. I got tired of waiting so I downloaded the Uber app and pressed a few buttons and had a car come in 5 minutes. I canceled the taxi as I stepped through my front door.

  4. I have tried to get a taxi in Pittsburgh once. I told them where I was and they said they couldn’t send a cab to me, but they would send a cab to my area, but anybody could flag it down before it would even get to me. While I argued with them, my friend hailed an unlicensed jitney cab, and got us back to our hotel at 1/2 the cost the cab ride had been into the city, and the driver even showed us some sights at no cost. Pittsburgh already runs on completely unlicensed cabs, so the irony in this is very deep.

  5. Am I the only one that Reason is causing to care less about Uber and millennials? I get it. Uber is a neat idea and the cab monopolies suck. But Jesus Tap Dancing Christ it doesn’t warrant this much attention.

    1. Yes it does. You just don’t understand the importance of it.

      1. Its important. It is not like gay marriage or anything. But nothing is. Every time they do one of these posts, they could be posting on gay marriage. There are only so many posts to go around.

        1. Maybe they’ll cut down on AGW posts to keep the quotas for both Uber and gay marriage.

    2. The regulators disgree with you.

    3. Why not? The Uber and Lyft controversies touch on so many areas of libertarian interest. The state’s attempt to stifle any innovation that is deemed a disruptive technology. Corruption of public officials in the pay of powerful unions. Regulatory capture by existing transportation firms. Occupational licensing. How Uber and Lyft appear to be possibly creating their own form of regulatory capture.

      I’m sure I could think of several more if I spent some real time on it.

  6. She says that “the best fix is a legislative fix, creating a separate regulatory category for transportation networks.”


    Someone should propose a separate regulatory category to control the shoe and makeup market – maybe then the stupidity will get through.

    1. Oh em gee. I swear I didn’t see your post before I posted mine.

  7. . She says that “the best fix is a legislative fix, creating a separate regulatory category for transportation networks.”


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