State regulatory review commission approves modernized taxicab regulations

State regulatory review commission approves modernized taxicab regulations

Author: Jason Gottesman/Thursday, April 20, 2017/Categories: News and Views

The Independent Regulatory Review Commission Thursday unanimously approved a set of final regulations from the Public Utility Commission that are aimed at modernizing the commission’s regulation of taxicabs in order to help them better compete with the recently legalized transportation network companies such as Uber and Lyft.


Stemming from enabling legislation in Act 85 of 2016 and Act 164 of 2016 that allowed the temporary then permanent legalization of TNCs, the legislature tasked the PUC with promulgating new regulations as they pertain to taxicab and motor carrier companies that would allow them to better compete with TNCs, which operate on a different business model than traditional taxi companies.


Pertinent changes to the way motor carrier companies can operate include removing the requirement to show a public need before being authorized to enter into the market, allowing flexible tariffs to allow motor carrier companies to operate their businesses in real time, requiring motor carrier companies to update their fleets, and eliminating the restriction on owner-operated taxis.


Of concern to the commissioners Thursday was the elimination of the need to show a public need by the company prior to entering into the market.


In the past these companies needed to show that they are both serving an unmet public need in the area and that their company is fit—both physically, morally, and financially—to serve the need they allege.


According to PUC Deputy Chief Counsel John Herzog, the removal of the public need requirement brings traditional motor carrier companies more into line with limousines and TNCs.


“This was on the commission’s own initiative using its expertise, its experience, looking at these industries and asking ‘Does this make sense to continue this particular barrier to entry’,” he said.


According to Herzog, much like what happened with limousine companies, the removal of the public need requirement will lower the amount of objections to entry that can be filed and create greater competition.


Additionally, the PUC will retain its role determining the fitness of a company to enter into the market, observing their financial ability, the ability of them to cover the geographic area they wish to serve, and inspecting the quality of their vehicle fleet and suitability of the company’s drivers.


According to Herzog, the regulations are also in line with the new business models being adopted by the traditional carriers as they seek to remain competitive after TNC legalization.


“In the markets I’m familiar with, in talking with the traditional carriers in those markets, they’ve had to change,” he said. “They’ve had to modify their business models to maintain their relevancy to what the public demands to provide better service. There’s more TNC rides today because there is more pent up demand being provided by the model than there was before.”


Given IRRC’s approval, the regulation will become effective following a legal review by the Office of Attorney General and publication in the Pennsylvania Bulletin, the Commonwealth’s official gazette for information and rulemaking.


IRRC was formed under the Regulatory Review Act in 1982 as an independent legislative agency that reviews regulations to determine whether they are in the public interest and promulgated under appropriate legal authority.


According to the commission, it also serves as “a clearinghouse” for complaints and comments from the public and members of the General Assembly regarding proposed regulations.


The five members of the commission are appointed by each of the four legislative caucuses and the governor.


The current Chairman is George Bedwick who was first appointed by then-Speaker of the House Keith McCall (D-Carbon) in 2009 and then reappointed to the commission by current House Minority Leader Frank Dermody (D-Allegheny) in 2012.


While IRRC has no ultimate authority to stop a regulation, a regulation’s approval by the commission has commonly been recognized as a regulatory sine qua non in terms of whether a regulation should move forward.