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Allegheny

Uber receives $3.5M punishment from PUC

| Thursday, April 6, 2017, 2:15 p.m.

Uber will pay Pennsylvania $3.5 million for operating in the state without permission in 2014, though members of the Public Utility Commission disagreed about whether the penalty was appropriate punishment for the smartphone-based ride sharing company.

In a 4-1 vote Thursday, commissioners approved a $3.5 million settlement with Uber. The deal ends the PUC's dispute with Uber that started in April 2016, when the company was ordered to pay a record $11.36 million fine for operating without proper authority.

The settlement amount, the highest total ever paid to resolve a PUC case, will go into the state's general fund.

Commissioner John F. Coleman, Jr., who cast the dissenting vote at Thursday's meeting, wrote in a statement filed with the commission that he supported a “reasonable settlement” but believed the $3.5 million fine was too low. As evidence for his argument he cited — among other things — Uber's “unwavering propensity to operate illegally” despite official warnings from the PUC, and Uber's insistence that the PUC did not have the authority to order Uber to cease its services.

“A larger settlement would have served as an even stronger deterrent against future violations,” he wrote.

Commissioner Robert F. Powelson filed a statement that said the $3.5 million penalty is too high, but he supported it in order to resolve the dispute and avoid litigation.

“I have consistently stated throughout the proceeding that I do not agree with imposing such a high penalty on a company that caused no harm to consumers, and, in fact, was providing a much needed service in the Commonwealth,” he wrote.

Uber did not respond to a request for comment.

A PUC spokesman in a written statement said the settlement “represents a substantial civil penalty, as a deterrent to other unauthorized motor carrier services.”

Uber last year asked the PUC to reconsider the original $11.36-million fine, The commission upheld the initial decision in September. Uber appealed to Commonwealth Court.

Gov. Tom Wolf in November 2016 signed a law allowing companies such as Uber and competitor Lyft to operate permanently in Pennsylvania. The law contained a provision that capped fines and penalties for transportation companies operating “without proper authority” at $250,000.

In 2015 Lyft settled a its own dispute with the PUC for $250,000.

State Sen. Jay Costa, D-Forest Hills, in a statement Thursday said he supports ride-sharing companies but was “pleased” that Uber will pay $3.5 million instead of the $250,000.

“No organization should have the benefit of special legislation being submitted for consideration specific to its individual needs,” he said.

Michael Walton is a Tribune-Review staff writer. Reach him at 724-850-1290 or mwalton@tribweb.com.

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