PUC raises liability concerns with Lyft, Uber

June 27--In its harshest criticism yet of app-based ride-sharing services Uber and Lyft, Pennsylvania Public Utility Commission officials told judges in Pittsburgh on Thursday that the companies are recipes for disaster.

"Each and every day Uber operates, with each and every trip, it subjects the public to injury or death," PUC Bureau of Enforcement prosecutor Michael Swindler argued before two administrative law judges. "When something terrible happens, everyone will ask, 'Where was the PUC?' "

The hearing Downtown was part of the PUC's effort to obtain cease-and-desist orders against the San Francisco-based companies. Administrative law Judges Mary Long and Jeffrey Watson said they would rule on Tuesday.

PUC commissioners can accept, reject or modify the judges' decision at their July 9 meeting. The companies could appeal an unfavorable commission decision to Commonwealth Court.

No Uber or Lyft representatives attended. Their attorneys hinted that such statements are overblown, and no problems with drivers have occurred.

Uber spokesperson Taylor Bennett took a somewhat softer tone in a statement after the hearing, saying the company continues to work with city and state officials to resolve concerns.

"With unprecedented safety and accountability built into the app, a stringent screening process and best-in-class insurance coverage, Uber connects riders with the safest, most reliable ride on the road," Bennett said. "A safe, affordable and convenient transportation alternative for riders, that provides added economic opportunity for drivers, is a win for the people of Pennsylvania."

Paige Thelan, a spokesperson for Lyft, said the company's safety criteria goes beyond what is required for taxis and limos in nearly every jurisdiction across the country.

"All Lyft drivers in Pittsburgh are equipped with our $1 million commercial liability policy, which is more than 30 times higher than what taxis are required to carry under the PUC," Thelan said. "Lyft also provides excess uninsured/underinsured motorist coverage for drivers and conducts background and DMV checks that are more stringent than taxis and limos."

The PUC filed paperwork last week seeking the cease-and-desist order because the companies continue to operate despite proposed fines of $130,000 for Lyft and $95,000 for Uber. The companies do not have a PUC permit to operate, although both have applications pending.

The agency proposed fining 23 previously cited drivers $1,000 each.

The commission contends that their operating without a license and using uncertified drivers means it cannot ensure driver integrity, vehicle safety and sufficient insurance coverage.

The state insurance commissioner jumped into the fray this month, warning consumers that insurers may not cover injuries if the cars are involved in an accident, noting personal auto insurance policies typically exclude coverage when a vehicle is used as a public livery service.

Some ride-sharing companies buy coverage for their network of drivers, but the policies may not cover all costs from an accident, the department said.

Uber and Lyft say their insurance for independent contractor-drivers provides coverage if their personal policies do not.

Bobby Kerlik is a Trib Total Media staff writer. He can be reached at 412-320-7886 or bkerlik@tribweb.com.

___

(c)2014 The Pittsburgh Tribune-Review (Greensburg, Pa.)

Visit The Pittsburgh Tribune-Review (Greensburg, Pa.) at www.triblive.com

Distributed by MCT Information Services