Taxi driver Steve Chervenka was waiting at 30th Street Station last week thinking about the last time he saw a PPA inspector. The inspectors are tasked with making sure Philly’s cabs, limos and — as of this year — ride-sharing vehicles are up to code. Chervenka used to see them constantly tracking down passenger complaints or pulling cabs over for something as small as not displaying their operating certificate clearly. Now, months will pass before he spots a familiar face.
“I saw an inspector on the street a couple days ago and said, ‘Man it’s been a long time since I’ve seen you,’” Chervenka said. “I feel kind of sympathetic. They’re in the same boat. They’re like a skeleton crew down there because they don’t have the income coming in from the industry that they did.”
The death of Philadelphia cabs has been widely reported since the day UberX entered the market without legal permission in October 2014. But what about the PPA’s Taxi & Limousine Division, the group charged by the state with regulating those vehicles? It’s struggling now, too.
After growing fat for years off ever-expanding shares from taxi medallions and overpriced, regular inspections, the PPA hasn’t even been collecting quarterly dues from taxis in 2017, thanks to unclear language in a Harrisburg transportation bill. The PPA’s Taxi & Limousine Division revenue for FY 2018 is expected to be about half what it was the previous year. Cab owners, whom the PPA was once accused of being in bed with, have sued the agency for $500 million, and the lawsuit is winding through the courts faster than a taxi on I-676. And according to insiders, the three years of ride-sharing companies dominating the market has resulted in an environment nearly free of oversight, not only for Uber and Lyft but cabs and limos, too.
“They’re not doing enforcements,” said Alex Friedman, general manager of 215-Get-A-Cab. “They’re not doing any protections for the public and drivers…. Everybody operates in the city like the wild, wild West.”
The new law and fewer inspectors
The ride-sharing universe was supposed to get more structured for the PPA this year. In January, Act 164 went into effect, formally legalizing the ride-sharing services that had been largely operating illegally for the two previous years. It placed the PPA in charge of regulating them.
Uber and Lyft have not provided exact numbers for Philly, but Uber has said it has 20,000 drivers in the Philadelphia area. Add 1,400 cabs and drivers to that. The PPA, according to the agency, has been doing it with seven inspectors. A position is open that would increase the number to eight.
Eight inspectors may have been enough when the PPA’s purview was limited to cabs and limousines (and even then taxi drivers were accused of cheating customers and not following laws). Now the responsibilities have been increased tenfold.
As Chervenka said, nobody sees inspectors anymore. Ubers and Lyfts are parking in taxi stands, where they’re not allowed.
“If Uber is surging they say, ‘What is Uber charging’ and say, ‘I’ll take you for $10 less,'” Taxi Workers Alliance of Pennsylvania President Ronald Blount said. “And who suffers? It’s the consumers.”
Blount said cab drivers are fleecing customers at major events like sports games, forcing them to pay higher than the taxi rate but lower than a ride-sharing surge.
Corinne O’Connor, deputy executive director of the PPA, said, “I don’t think seven [inspectors] are covering it. But with all the changes in the law we’re financially strapped. We can only do so much.”
O’Connor is referring to Act 164, the legislation from Harrisburg. Because of the taxi industry’s woes in the ride-sharing era, the PPA was going to take a hit no matter what. But Act 164 ensured the PPA’s Taxi & Limo division would be gutted further. Rather than make life difficult for ride-sharing, the law, heavily lobbied for by Uber, slightly deregulated taxis and brought them closer to ride-sharing’s level. The PPA can no longer make as much on assessment fees from cabs or from annual inspections.
‘All the medallion owners are not paying’
In FY 2018, the PPA estimates its revenues in the Taxi & Limo division to be $4.7 million. That’s down from $8.6 million in FY 2017 and $8.4 million in FY 2016 (These revenues make up only about 3 percent of the PPA’s overall budget, which is heavily centered on parking). Revenues from taxis and limos are expected to be about $3 million of that $4.7 million. Those from Uber and Lyft, despite a fleet 10 times the size of taxis and a vastly more popular service, are expected to be about $3 million, two-thirds of which goes to the Philadelphia School District. One-third, $1 million, goes to the PPA.
The biggest loss in projected revenue compared to previous years comes from assessment fees. Before Act 164, the way the PPA charged medallion owners brought in around $1,500-plus a year per cab. The new law states the PPA can charge only 1 percent of “the annual gross operating revenue of a medallion owner.” Expected annual revenues per cab, which can be paid in quarterly installments, will be closer to $200 to $500.
And it gets worse. In some cases, the PPA hasn’t been able to collect the 1 percent. The language of the bill has set off a war between the PPA and medallion owners over what’s actually owed.
“All of the medallion owners are not paying,” said Chris Wiston, owner of Aegis Dispatch. “Everything is just a big litigious mess is what it is.”
Other owners and drivers said at least some medallion owners have been withholding fees owed to the PPA. O’Connor confirmed, “Some have been paying and some haven’t.” She said the bill will be fixed up to clarify the assessment fee is 1 percent of a cab’s meter.
The PPA was charged with building a regulatory structure for ride-sharing companies to follow through Act 164 but has yet to do so. Last week, it posted public notice of an Aug. 31 meeting for discussing rules for Uber and Lyft, meaning the conversation around setting guidelines won’t begin until later this month.
“I’m not sure that we can trust this agency,” said Friedman, the 215-Get-A-Cab general manager. “The way they operate with their history of sexual harassment and abuse of power and their hiring of all kinds of relatives and friends and patronizing every senator and state rep, especially from this area. I’m not sure we are on the right track with these people. I think the state really should look to reassess their position on the PPA.”
‘The owners don’t care about the drivers’
Meanwhile, a judge ruled earlier this summer a lawsuit brought against the PPA by medallion owners can continue. They’re asking for $500 million to compensate for the loss in taxi medallion value since the entry of UberX and Lyft in October 2014. Depositions of PPA management are scheduled for the second week of August. Medallion owner attorney Brett Berman said he hopes a trial happens this year. The lawsuit argues the PPA failed to properly regulate ride-sharing and harmed the cab industry.
“They could’ve gone to court, they could’ve done a lot of things,” said Berman, partner at Fox Rothschild. “They were given very broad authority by the legislature to act.”
The lawsuit seeks only monetary damages. It doesn’t ask for changes in the way the PPA operates, and cabbies don’t expect anything from the lawsuit to benefit them.
“The owners,” said driver Santam Singh, “they don’t care about the drivers.”
Singh has been driving since 1999 and has seen his income dip significantly in the last three years. Taxi drivers and some owners are pushing for drastic changes to help the industry rebound. In August, 215-Get-A-Cab is set to partner with PHL Taxi and Freedom Taxi and put more than 1,000 Philly taxis on an app similar to what Uber and Lyft offer. Many drivers want every taxi, regardless of company, on a single app and for all taxis to be painted the same color — anything to help.
Few believe these changes will occur or that they would save the business. Chervenka said he’s considered switching professions and beginning a career as a truck driver.
In short, the taxi industry is still experiencing misery. It at least has company with the PPA.