Philadelphia tries to put the brakes on Uber

PHILADELPHIA — The city's parking agency has filed a complaint to stop Uber, the app-based ride-hailing service, from continuing its illegal operations. Friday’s lawsuit also seeks $300,000 in damages and is the latest municipal attempt to contain the corporation, whose strategy has been to show up first and ask questions later. But can Philadelphia really stand in Uber’s way?

Since late October 2014, Uber has done business throughout Pennsylvania, with and without permission. The state utilities commission ultimately approved the company in January 2015, but Philadelphia, which regulates its own vehicles-for-hire, was carved out of that general license.

Uber has never had a legal right to operate in Philadelphia. Nevertheless, the corporation says it has served 700,000 riders on over 1 million trips, while creating 12,000 driver jobs. Yet according to company representative Taylor Bennett, Uber is neither a transportation company nor an employer.

“It’s not a matter of legal or not legal,” he said. “There’s no law in place, because there was no ‘ride-sharing’ until a few years ago.” Bennett added that the current attack on Uber by the Philadelphia Parking Authority (PPA) is solely about “protecting an entrenched taxi industry.”

Traditional cab drivers — and the medallion owners who profit from their leases — have opposed Uber in cities across the world. Yet according to Steven Hill, author of the new book, “Raw Deal: How the ‘Uber Economy’ and Runaway Capitalism Are Screwing American Workers,“ it’s simply a question of fair play: “The reality is that taxicab drivers in most places are limited by a medallion-type system where the supply of drivers and cars is limited, and suddenly they have a new player with the exact same service that has no restrictions whatsoever.”

Cabbies in Philadelphia, a city of 1.5 million people, say they’ve lost significant income since Uber unlawfully entered the market. “It’s the worst summer yet,” said Ron Blount, who drove a city cab for 25 years before becoming a full-time organizer with the Taxi Workers Alliance of Pennsylvania, an informal union. “Even on a Friday, which is when drivers recoup [business], it’s horrible, and night shifts are horrible,” he said, based on conversations with his colleagues. “A lot of drivers are sitting at the airport for three hours hoping to get a big [fare].”

In January, taxi traffic was already slower than usual at Philadelphia International Airport. Drivers waited impatiently in a large staging area, an unsheltered enclosure with nothing but a food truck, 10 filthy portable toilets, a prayer tent erected by Muslim drivers, and a few picnic tables and benches. “At the airport, no one’s making money,” said longtime driver Sayeeda Rahman. “In October, I started noticing [Uber]. First, I thought they were bringing relatives, but then [a driver] said Uber.”

The enforcement wing of the PPA has been too short-staffed to police these unlicensed vehicles, and thus encouraged taxi drivers to be their eyes and ears. Blount had drivers jot down license-plate numbers to pass on to the PPA. A cabdriver named Frank collected over 150 such plates associated with “people who appear to be using their private vehicle as a taxi,” in December 2014 alone.

Meanwhile, the PPA conducted a long-term sting operation using the app, documenting 51 unlawful Uber rides between October 2014 and July 2015, each of them cited in the complaint filed this week. The drivers who carried out these trips “did not have rights to transport persons for compensation within Philadelphia,” the agency alleges. (The PPA declined to comment.)

Cities and regulators have generally been unprepared for the challenges posed by Uber and related companies such as Lyft and Sidecar, said Nick Klein, a professor in the community and regional planning department at Philadelphia's Temple University. “How do you react to a company that is flouting existing regulations? And what kind of city do we want? That’s a democratic question, a public conversation that should be happening — do we want unlicensed drivers to pick up and drop off throughout the city?”

Uber has tried to cut short this conversation by dint of its novelty, public relations muscle — it delivered puppies to offices throughout Philadelphia the day before the lawsuit was filed — and user-friendly interface, which gives passengers access to a comprehensive dispatch pool. But, Klein pointed out, “There’s no reason why Uber has to be the answer. Uber happens to be a $50 billion capitalized company, but any other app that gives you access to taxi drivers could provide the same service.”

Blount and partners at the National Taxi Workers Alliance are in the process of building their own app, he said. In Philadelphia, this new app would connect riders to members of the Taxi Workers Alliance and other traditional cabdrivers, giving riders non-Uber options.

“A lot of the public likes Uber for its flashy marketing and because of the way the taxi market has bottlenecked, but there’s another part of the public that sees the social impact of Uber and refuses to use it,” Blount said.

Still, Blount admits, city fines and litigation notwithstanding, “Uber is here to stay. We’re not going to get rid of it. The only way Uber will leave the industry is if it implodes on its own. … They have a big vision.”