back to article Surge pricing? How about surge fines: Pennsylvania orders Uber to cough up $11.4m

The Pennsylvania Public Utility Commission has upheld an $11,364,736 fine, the largest in its history, against Uber for running an unlicensed taxi operation and obstructing attempts to investigate the firm. The PUC issued the fine in May after finding that Uber had provided 122,998 trips to paying customers without receiving …

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Come on Reg

If I wanted to read words like "butthurt" in a news article I'd be on Gawker or Buzzfeed, not here!

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Re: Come on Reg

If some people are unable to comprehend why we on the right-hand side of the pond complain about the rape and general bastardistion of the English language, there is your answer!

Let's see how many downvotes I can accumulate for my temerity.

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Re: Come on Reg

"bastardistion"

Huh, I guess this is some legacy English word I wasn't familiar with.

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Re: Come on Reg

....And if I wanted to hear words like Commonwealth in an article. I'd read the Globe.

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Anonymous Coward

Before Uber in Pittsburgh it was impossible to get a cab, either they didn't show up or refused to take you, yet those companies got no fines. Uber was the best thing to happen to that city, transformed it into a city that was nice to have a night out in rather than a drink-driving gamble. This fine is ridiculous and shows how backwards this state is, just look at their purchasing alcohol laws.

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"rather than a drink-driving gamble"

Don't roll those dice - they're loaded against you.

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Anonymous Coward

I think dialling up for a licensed taxi driver who doesn't turn up is preferable to dialling up for unlicensed potential rapist who is more than willing to oblige.

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@AC

As a disclaimer, I very rarely use taxis, except when on business trips or short vacations, taking them to/from interstate/international airports.

That out of the way, I find it a curious position to take that, just because laws and regulations are slow to change, this justifies breaking them. Not that I am suggesting that you are taking that stance - just that I see it a lot in people who support and applaud Uber.

Back when I was younger and going out with my (then childless) friends, sometimes the taxi situation would be painful enough that we'd just stay out until the trains started running again or potentially cut an otherwise good night short in order to catch the last train. I've also seen fights start over taxis and had taxis I've booked never turn up, only to be told, when calling them back, that the taxi arrived but I wasn't there - despite the location being unambiguous and me standing there, waiting.

But none of that makes it somehow more acceptable for Uber to operate in violation of the existing laws and regulations.

Yes, laws and regulations are supposed to exist to improve society for everyone and thus should - where possible - represent the values and needs of the people. But, again, the failure of laws to match the expectations of the people is not justification for a multi-billion dollar company to break them - no matter how innovative the service. Nor does calling it 'disruptive' mean it gets a free pass.

And, while I am not often a fan of the way law-makers and regulators work, the hard truth is that sometimes there are good reason for laws that appear - even to a majority of people - to be pointless, overly-restrictive or that throw up miles of red tape, slowing innovation and adoption of potentially beneficial technology and advances.

Take the FDA.

Now, it is probably true that some things have been allowed which shouldn't have been and that some thing which should be, haven't been. Or that some are expedited and others held up by bureaucratic pettiness and inefficiencies. But you only need look to Theranos to understand that the sometimes frustrating regulations exist for a good reason, which is the safety of patients.

Is Uber and transport regulations the same? No. But, it is clear that, for a taxi system to work, the public must have faith that the vehicles they are getting in to are safe adequately insured and the drivers they are trusting their lives to are up to the task and of good character.

At this point, an Uber support may counter that Uber runs comprehensive checks and has clear regulations that accomplish this task. It may also be asserted that checks and regulations are not guarantee of a safe taxi ride either, possible accompanied by anecdotes of personal bad experiences in taxis.

Well and good, but there is a crucial point that needs to be made, which is that any such checks and regulations - and the thresholds for acceptance and rejection - are at Uber's discretion. I hasten to add that this doesn't make Uber less safe and taxis more safe but it's an important point that needs to be acknowledged.

What Uber are doing (in most locations) is equivalent to running a service to let people book unlicensed builders. In that situation, no amount of complaining that there aren't enough licensed builders - or that they are late or expensive or of poor quality - would change the fact that the service would be operating a marketplace for the purpose of being paid to hire out unlicensed tradespeople.

I'm glad that people are happy about Uber but customer satisfaction does not make something legal.

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Re: "This fine is ridiculous"

So you think that a company that refuses to comply to the law, obstructs investigation and just goes ahead and does whatever it wants is justified if it makes you feel better ?

Do you, by any chance, work at Exxon ?

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Austin banned Uber & Lyft and now just can't understand why its DUI rates tripled.

Amazing, that.

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Sure, I'll take an unlicensed builder or car ride when I really need one, and can't get a licensed one.

The local taxis are incompetent, inept, bumbling fools. I just want to get home. They can't do it, so I use Uber.

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@Gene Cash

And that's your choice. But it doesn't make Uber legal.

Every time some one points out that Uber are breaking the rules and laws, the response is: "but it's good for me". Couldn't be happier but that is not a response to the point.

Likewise, you choosing to employ an unlicensed builder does not mean that operating as a builder without a license is legal and that doesn't change no matter how difficult it is to find a build or how desperate your need.

Utility does not equal legality.

In Australia, it is illegal to distill alcohol at home without a license from the tax office. If you get caught, arguing that alcohol is too expensive and the bottle-shops are too far anyway doesn't change the fact that you have broken the law and it won't change the fact that you will be penalised for it.

Nor would it help to argue that Australia's liquor laws are backwards (they are) and the alcohol excises exorbitant (it is).

If you operated a home still and then made a profit selling to others - something that is illegal nearly everywhere - you could of course complain that you are 'innovating' and 'disrupting' and 'democratising' the alcohol industry and that you are providing a service that people want. You could say that; I just don't think it would get any traction with the authorities.

But let's go a bit further - let's imagine you were caught illegally distributing alcohol and the authorities officially instructed you to stop but you kept doing it - not even slowing down. What do you think would happen when if you were caught again and tried to trot out the above spiel?

Let's be clear: I am not arguing that Uber shouldn't be legal; I am arguing that when the authorities have TOLD them they are operating illegally and FORMALLY instructed them to stop then it is not unreasonable and certainly not "absurd" that a sizable fine be leveled.

The law may be "absurd" but being fined for knowingly and deliberately breaking it after being specifically warned to stop is certainly not because Uber's behaviour here makes it clear that they believe they can break the law. What other conclusion can be drawn?

If you want to argue that Uber's behaviour was not breaking the rules then please do.

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Thank you @dan1980, your explanation and analysis of this is spot on.

One thing I would note though is where authorities try to adjust the law/regulations to cover operators like Uber (e.g. Uber wins right to challenge driver English tests), Uber fight them tooth and nail presumably in a bid to maintain the status quo where they operate as they please with disregard for the law/regulations.

If Uber really is simple ride sharing (catching a lift with someone already going that way) the concept of surge pricing would be non-existent. As I understand law/regulations/insurance requirements in England, it's fine for a driver to car share (there are officially backed initiatives to encourage it!) as long as they accept only a reasonable contribution towards fuel. Charging more than that means it becomes a Taxi and thus it should adhere to the regulations that apply to Taxis.

I'm half expecting someone to declare Apple's approach to taxation as "Disruptive".

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@paulf

And your comments on 'ride sharing' (AKA: car-pooling) are spot on. In Australia, The legality of Uber, so far as regulations go is still not settled, but the tax commissioner has ruled that, where tax is concerned, Uber (and the others) are no different than any other taxi service.

The advice contains this clear, and well-reasoned logic:

"If you provide ride-sourcing services, you are providing taxi travel services. This is because you make a car available for public hire and use it to transport passengers for a fare."

It is made clear, however, that "it is possible for a vehicle to be a taxi for GST purposes, but not for state and territory regulatory purposes."

The relevant part, which addresses your point, is where they list the situations that do not qualify for this definition, specifically:

"non-commercial car-pooling arrangements where passengers contribute petrol money or other arrangements where there is no view to profit."

And that's the simple differentiation: are you out to profit or not. If yes, then you are 'carrying on and enterprise', regardless of your PR. "Sharing economy" and "disruptive" might make the VCs go weak at the knees but the taxman is made of stronger stuff.

This ruling was actually a big deal, because taxis in Australia are treated quite specifically when it comes to the GST, in that they MUST register and collect the tax regardless of their turn-over. This is in contrast to almost every other 'enterprise', which is only required to register if it exceeds a certain revenue threshold. This means ALL taxis must charge passengers GST, which gave Uber an instant 10% price advantage simply because they defined themselves to be something other than a taxi service.

But, back to your comment, the point is that, when the tax man gets involved, what should be considered a 'taxi service' and what shouldn't is no longer that hard to figure out. That so simple and logical a classification seems to elude so many authorities (including here in Australia) woudl be perplexing if not for the fact that most of us long ago realised that our lizards aren't worthy of the power they are given.

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@ Dan 1980: TL;DR

I don't think anyone is saying or even implying that using Uber makes it legal.

But unquestionably, using Uber *does* send a message to the relevant Administration that it is a service that the citizens want.

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@ChrisBedford

"I don't think anyone is saying or even implying that using Uber makes it legal."

That's part of my point - people avoid the conversation about the legality and use "I like it" as though it matters.

And yes, using Uber does indeed send a message that this is what the people want, but that does NOT justify, in any way, shape or form, the actions of Uber.

Because I love analogies, let's consider something that has been discussed numerous times in this forum: illegally downloading torrents.

If you use public acceptance of a service as a measure of its legitimacy then downloading movies illegally can be considered one of the most well-supported services of modern times. Maybe if the Pirate Bay and Kick-ass Torrents branded themselves as 'disruptive' things might have gone differently.

YES, the legal offerings from existing players are inadequate. Yes, downloading torrent files provides benefits that are simply not available from legitimate sources. Yes, it is still illegal.

Uber exists because a market exists for such a service and that market, in turn, owes its existence to the complacency of the existing players. Anyone who considers this honestly for a moment will see the correlation with illegal downloading of content via bittorrent.

But, as with Bit Torrent, the public annoyance with the incumbent and acceptance of the alternate system does not confer legality upon it.

I don't think these two things are equivalent but the logic appears to be eerily similar: the people support a service that breaks the law so it should be made legal.

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The real clincher is that one of the biggest reasons that Uber is able to out-service the taxi companies is that it is not hampered by the same regulations, just as an illegally-download torrent may seem more convenient that a legally-distributed copy.

This is one of my big beefs with Uber: they ridicule taxi operators as inefficient while their own ability to out-maneouver them is predicated on their ignoring the regulations that taxis are subject to. In effect, they attempt to convey the idea that the taxi industry is corrupt and inefficient while resisting the push to have themselves subject to the same restrictions.

To create a synthetic analogy, imagine a race where all the competitors had to wear lead boots but one competitor was able to wear normal shoes. Now imagine that competitor heaping scorn upon the competition for being slow, while simultaneously rejecting any and all efforts to level the playing field, claiming that their victory is proof enough that they should be accepted.

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Anonymous Coward

Looking at this logically...

Let's see.

Summon an Uber car and driver, where everything is recorded, where drivers are rated by passengers, and where you can pick your driver on whatever criteria you consider important, or

Get in a taxi with an anonymous driver who will not even be connected to you if your body shows up in a ditch the next day...

I know which one a prudent and careful passenger will choose.

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Anonymous Coward

Re: "This fine is ridiculous"

Government enforced commercial monopoly, aligned with anti-societal Luddites fighting progress, or a technically illegal service providing an efficient service that people need and/or want? Not the same as Exxon at all.

Invoking Exxon as a smear tactic during a debate about commercial and legal issues is kind of like likening a politician to Hitler in order to score points in a political debate, and perhaps less relevant.

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Re: Looking at this logically...

"Get in a taxi with an anonymous driver who will not even be connected to you if your body shows up in a ditch the next day..."

Christ, some of you people seem to live in some really rough towns!

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Re: Looking at this logically...

@AC

"Summon an Uber car and driver, where everything is recorded, where drivers are rated by passengers, and where you can pick your driver on whatever criteria you consider important, or . . . . get in a taxi with an anonymous driver who will not even be connected to you if your body shows up in a ditch the next day...

That's an argument for one service model over another and that's great, but no one here is saying: "taxis are awesome and Uber is dreadful" so I'm not sure what position you are arguing against.

Personally, I've never felt any danger at all in any single taxi I've ever been in. I've been annoyed by ineptitude, inconvenienced by delays, shocked by fares and offended by racist remarks (not directed at me) but I've never been worried about my safety.

That's not a mark in the plus column for taxis, though, as I consider that a basic standard.

But I digress - the question here is whether the authorities were justified in handing down a per-incident fine to a business for breaking the law repeatedly, deliberately and without remorse after being expressly, officially told to stop.

So far, I haven't seen one single reason why this fine is not justified.

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Anonymous Coward

> rather than a drink-driving gamble

That's the sort of thing that only a complete retard would even contemplate doing.

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Anonymous Coward

> I find it a curious position to take that, just because laws and regulations are slow to change, this justifies breaking them

While agreeing with your argument, I would just like to point out that it is not purely about breaking the law.

It is about breaking the law so that they can get rich. Why don't they just go and rob a bank / invade a country or something?

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Commonwealth

Ta for the bootnote - I had no idea about this: Wikipedia wrt Commonwealth, being a Brit, I was only aware of the (British) Commonwealth of Nations.

Cheers

Jon

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Re: Commonwealth

"being a Brit, I was only aware of the (British) Commonwealth of Nations."

You should also have been aware that in the middle of the C17th Britain was a Commonwealth under the Cromwells.

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Alien

Re: Commonwealth

Actually it IS a state. The older states love to keep the older terms though. For example, in NJ, in colonial and early independence periods, only landowners who held their land free of any encumbrance could vote. Such people were called freeholders.

Most counties in NJ (a couple have modernized) are run by a government called the Board of Chosen Freeholders, an archaic term that dates to when only freeholders could vote. Even though that's long gone, the name remains - in fact, many in NJ don't know the origin of the name of the governing body and refer to the Board as the "Freeholders". (It gets even more confusing in Monmouth County NJ, where the seat of the Board of Chosen Freeholders is in a borough called "Freehold", better known for Bruce Springsteen.)

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No, we never did get over it.

And yeah, alcohol laws are pathetic in PA. Can't buy the stuff with your groceries. Beer is only available at licensed beverage distributors, and liquor at State Stores.

Which is ironic since it's a commonwealth, not a state. O_o

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@Jeffrey

Sounds like Australia, mate.

Alcohol - of any kind - can only be purchased at specially-licensed liquor stores which, even if owned by and occupying the same building as a supermarket, must have a separate entry and registers.

Oh, and in NSW, ridiculous over-reactions by blunt-instrument-wielding wowsers means all those stores must close by 10pm. (Like yours.)

So yeah, about the same - you guys have your grog shops owned by the state but the restrictions are pretty much on par. On the plus side - for you - your alcohol prices are substantially better than ours.

A quick check shows 750ml Jim Beam* at $19 USD at your stores while a 700ml (note the smaller size) is $38 AUD at one of our larger 'discount' liquor stores. That's ~$28.70 USD. Accounting for the size difference, that puts out bottle at 1.6x the cost of yours.

So it could be worse : )

* - Used for ease of comparison only.

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Not everywhere in Australia, in some states liquor/beer lane is right next to everything else in Coles and Woolies.

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Tell me about these utopias you speak of!

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re: So it could be worse : )

Oh don't worry - it *will* be!

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Re: re: So it could be worse : )

In a British commonwealth country (Malaysia) they've got the separate booze shop thing going on too except they take it a step further and have it right next to the pork products (as well as having very little good beer).

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In California you can buy hard liquor with groceries between 10pm and 12am depending on the city.

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"In California you can buy hard liquor with groceries between 10pm and 12am depending on the city."

Jeez, they really don't want you to drink at home, do they.

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Should these ex-colonies be invited to the British led/owned Commomwealth Games?

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Yes!

It's entirely possible that Australia retains its constitutional monarchy status purely so we can compete in the Commonwealth Games. If a bit of US competition came in, perhaps we might get bored when we don't win all the swimming events and decide the games aren't worth staying int he Commonwealth for.

That said, I actually think there's really no compelling reason to leave - if our democratic process is ever interfered with, we;d be a republic as soon as the referendum could be organised. That said, the way we've been going (4 changes of PM in 6 years), a bit of interference might not be a bad thing.

Oh wait, Brexit. Right.

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Bootnote

So when people say the United States of America - should it be the United States and Commenwealths of American instead? USCA? USACA?

Hehehe. I think I will keep this fact in mind, for next time I need to trip someone up at a quiz night. How many states in America. 50? Wrong! 46 plus 4 Commenwealths! :P

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Anonymous Coward

Re: Bootnote

Hehehe. I think I will keep this fact in mind, for next time I need to trip someone up at a quiz night. How many states in America. 50? Wrong! 46 plus 4 Commenwealths! :P

Just wait until Trump gets voted into office - then the whole country will just be in one almighty state

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Re: Bootnote

until Trump gets voted into office - then the whole country will just be in one almighty state

...of chaos. God help us all if he does get elected.

Slightly off topic here

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my two cents worth*

Two points :

1. Just how hard can it be for Uber to become "legal" and register as the taxi operator it so clearly is? Technically, easy. Philosophically difficult.

2. Advice to Tom Wolf, Governor of Pennsylvania : when drafting legislation for "ridesharing", make it relevant to that and not operating an unlicensed taxi service like Uber.

It worries me that the leading official in the State/Commenwealth intimates that Uber is merely ridesharing. Surely that is dishonest, disingenuous at best.

It also amuses me that often the US are the forerunners in cracking down on "rogue" banks who bend the rules or the corrupt businesses who use "bribery" to win business.

What's the difference between bribery and such as appointing key IOC Veeps as "ambassadors", for the victory ( well, Goddess of)? The US seems to rather like the latter approach.

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Let's hear it for buggy whip makers and elevator operators

Just do away with government imposed commercial monopolies, where technically (and I do mean technically, as in we need to do spectrum management, air traffic control, physician licencing, or the equivalent) possible.

Taxi companies/owners (generally not the drivers so much, really) are reaping the benefits of a government imposed scarcity and inefficiency that artificially increases fees and inflates the value of a taxi licence, sometimes into the million dollar range, while simultaneously constraining access to services through both price and induced scarcity.

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Re: Let's hear it for buggy whip makers and elevator operators

"Taxi companies/owners (generally not the drivers so much, really) are reaping the benefits of a government imposed scarcity and inefficiency that artificially increases fees and inflates the value of a taxi licence, sometimes into the million dollar range, while simultaneously constraining access to services through both price and induced scarcity."

Most of that problem is solved simply by making the licences non-transferable. Driver is licensed. No selling on, no renting allowed. Simples!

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Re: Let's hear it for buggy whip makers and elevator operators

@Daniel 18

You make a very important point: the monopolies - and the restrictions and regulations they entail - were created by the governments.

Too many people argue as though the monopolies are the creation of the taxi companies. They're not.

I am not saying taxis are great - they have problems galore - but much of the structure of the taxi systems in any given region are the product of the particular regulations imposed by the government.

In NSW, for example, there are rules that require all taxis to be backed by dispatch services which have their own restrictions and rules. The taxi industry simply couldn't operate like Uber - they're not allowed to. Indeed, there have been attempts at creating smart-phone applications of a similar nature but the government has told them they aren't allowed to do it.

The system is corrupt because it is run by a relatively small set of the big dispatch operators but that situation has come about because of the rules the government has set.

When/if those same governments allow Uber to operate alongside taxis but without any of the same rules, it is fundamentally unfair to the taxis drivers, who have had to jump through hoops and pay a lot of money to get the right to operate in that monopoly.

Taxi licenses had a value because the government set the number of them. If the government devalues them by, effectively, allowing anyone with a car to operate a taxi without a license then I think it is only far to compensate the owners.

Everyone who operates a taxi service should be under the same rules - either Uber are brought into line or existing drivers/owners have their regulations removed.

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Anonymous Coward

Uber Annoyances

I love Uber/Lyft, but I do get annoyed with the term "ridesharing". It suggest a utopia of multiple people sharing a private vehicle to get to the same or nearby destinations, saving the planet and easing congestion. Whilst that is one of the options on the app, it's most likely the least used one. They are private hire firms, although operating using technology rather than a CB radio.

I also get irritated with people trying to claim the drivers are employees. They log in and out of the app as they wish and can pick and choose the customers. They are independent drivers and that's all there is to it.

Rant over.

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Re: Uber Annoyances

As an Uber driver who has NEVER had a fare, I find it strange that many drivers WANT to be treated as employees? That would work out well for me, just a little dishonest.

Disclaimer: I live in rural Colorado, and have really lousy Verizon service. LOL

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Legal? Follow the money.

Ever hear of "Jury Nullification". Legal and laws have their place. Unless some entity pushes on outdated laws, supported by dying industries and their contributions to politicians' re-election coffers, the public continues to suffer.

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