Gov. Tom Wolf, Pittsburgh mayor blast state commission for $11.3M Uber fine

The chief executives of the state and its second-largest city said the record fine paints the state as “not a welcoming place for 21st century businesses.”

Gov. Tom Wolf and the mayor of Pittsburgh sent a sharply-worded letter to the state’s Public Utility Commission after it fined Uber a record $11.3 million, saying the move paints the state as “not a welcoming place for 21st century businesses.”

The PUC, the state regulatory agency that oversees Uber everywhere except for Philadelphia, levied the fine against the San Francisco-based ridesharing company for illegally operating in Pittsburgh for several months in 2014. The fine would be the largest in PUC history.

Gov. Tom Wolf, Pittsburgh Mayor Bill Peduto and Allegheny County Executive Rich Fitzgerald signed the letter to the PUC Tuesday urging reconsideration of the fine as Uber “is investing hundreds of millions of dollars” in Pennsylvania.

“Uber could have made such investment plans in any city in the world but chose Pittsburgh to be its hub for testing of self-driven vehicles and its worldwide headquarters for advanced technology research,” the three wrote in a joint statement. “The company has already hired several hundred employees to its Advanced Technology Center, invested millions just in the past year, and is a model for new and innovative cooperative efforts between government and business.”

PUC spokesman Nils Hagen-Frederiksen said the agency received the letter and is reviewing it.

Even as Uber says it plans a long stay in Pittsburgh, the state governing agency that oversees taxis, limos and by default, ridesharing companies, has battled with them from day one. Both Uber and Lyft rolled into Pennsylvania via Pittsburgh in 2014 like they do in most markets, without getting any permits or licenses.

The $11 million fine announced last month stems from a period of several months in 2014 when each company continued to operate in Pittsburgh despite cease-and-desist orders from the PUC.

The original amount of the fine requested against Uber was $49.9 million, but was reduced, because as PUC Commissioner John Coleman wrote in a majority opinion statement in April, “Uber and its affiliates have not demonstrated any significant compliance problems since the grant of emergency temporary and later experimental authority.”

Uber spokesman Jason Post said the company planned to appeal the decision to Pennsylvania’s Commonwealth Court.

“We are disappointed by [the] decision and shocked by the amount of the civil penalty, which is 45 times higher than the penalty paid by Uber’s competitor for the same activity,” Post said in an email. “As two Commissioners confirmed, there was no actual harm to Pennsylvanians, and the Commission subsequently approved the same operations. We look forward to making our case to the Commonwealth Court. In the meantime, we will continue to work in good faith with the Commission.”

The letter from Wolf and Peduto comes as the a state House committee is poised to vote Wednesday on a bill that would legalize ridesharing services statewide. Some versions of the bill have, however, carved out Philadelphia from that legalization and regulation process.

Uber’s “ask for forgiveness instead of permission” approach has meant an ongoing battle with regulators at the state level, and Uber still doesn’t have even temporary status in Philadelphia, where both it and Lyft have drawn the ire of the Philadelphia Parking Authority and local taxi unions.

But at the western end of the state, it’s a different story entirely. John Bares, director of Uber’s year-old Advanced Technology Center (which employs hundreds) has said Peduto is Uber CEO Travis Kalanick’s “favorite mayor.”

When Uber and Lyft began operating in Pittsburgh, Peduto spoke frequently in support of the companies, and in opposition to the PUC.

“I will not let the Governor and the Public Utility Commission shut down innovation, the mayor said in a July 2014 statement, the height of the cease-and-desist period. “While the commission may wish for Pennsylvania to cling to a Jurassic Age of transportation options, people in Pittsburgh and other communities know our state must adapt or die in the global marketplace.”

The ATC opened in Pittsburgh last year, and promptly hired away staff from Carnegie Mellon University, raising more than a few eyebrows.

Earlier this year, Uber announced plans to install a test track for its driverless cars at the former site of a steel mill in the city’s Hazelwood neighborhood.

Wolf, Peduto and Fitzgerald wrote Tuesday that Uber could be subject to fines, but called for fairness in their application.

“In making judgments about penalties to be imposed on emerging technologies that do not fit neatly into the existing regulatory regime,” they wrote, “the PUC should consider the broader impact these penalties will have on Pennsylvania and our economy.”

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