Capital City Cab Service v. PA PUC

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Capital City Cab Service, :
:
Petitioner :
:
v. : No. 238 C.D. 2015
:
Pennsylvania Public Utility :
Commission, :
:
Respondent :
Keystone Cab Service, Inc., Good :
Cab, LLC, United Cab, LLC, EZ :
Taxi, LLC, :
:
Petitioners :
:
v. : No. 240 C.D. 2015
:
Pennsylvania Public Utility :
Commission, :
:
Respondent :
Executive Transportation Co. Inc., :
Aceone Trans Co., AF Taxi, Inc., :
AG Taxi, Inc., AGB Trans, Inc., :
Almar Taxi, Inc., TS Cab, Inc, BAG :
Trans, Inc., BNG Cab Co., BNA Cab :
Co., BNJ Cab, Inc., Bond Taxi, Inc., :
BSP Trans, Inc., Double A Cab Co., :
FAD Trans, Inc., GA Cab, Inc., :
GD Cab, Inc., GN Trans, Inc., God :
Bless America Trans, Inc., Grace :
Trans, Inc., IA Trans, Inc., Jarnail :
Taxi, Inc., Jaydan, Inc. LAN Trans, :
Inc., LMB Taxi, Inc. MAF Trans, :
Inc., MDS Cab, Inc., MG Trans Co., :
Noble Cab, Inc., Odessa Taxi, Inc., :
RAV Trans, Inc., Rosemont Taxicab :
Co, Inc., S&S Taxi Cab, Inc., :
SAJ Trans, Inc., Saba Trans, Inc., :
SF Taxi, Inc., Society Taxi, Inc., :
Steele Taxi, Inc., TGIF Trans, Inc., :
V&S Taxi, Inc., VAL Trans, Inc., :
VB Trans, Inc., and VSM Trans, Inc. :
BM Enterprises, Inc., t/a A.G. Taxi, :
Bucks County Services, Inc., Dee :
Dee Cab Company, Germantown :
Cab Company, Ronald Cab, Inc., :
t/a Community Cab, Shawn Cab, :
Inc., t/a Delaware County Cab, :
and Sawink, Inc., t/a County Cab, :
:
Petitioners :
:
v. : No. 253 C.D. 2015
:
Pennsylvania Public Utility : Argued: December 9, 2015
Commission, :
:
Respondent :
BEFORE: HONORABLE DAN PELLEGRINI, President Judge1
HONORABLE BONNIE BRIGANCE LEADBETTER, Judge2
HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE MARY HANNAH LEAVITT, Judge3
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
1
This case was assigned to the opinion writer on or before December 31, 2015, when
President Judge Pellegrini assumed the status of senior judge.
2
This case was assigned to the opinion writer on or before January 31, 2016, when Judge
Leadbetter assumed the status of senior judge.
3
This case was assigned to the opinion writer before January 4, 2016, when Judge
Leavitt became President Judge.
OPINION BY
JUDGE COHN JUBELIRER FILED: April 19, 2016
These consolidated Petitions for Review involve a multi-party, multi-
application proceeding before the Pennsylvania Public Utility Commission (PUC).
Two PUC Orders are at issue: (1) the December 5, 2014 Opinion and Order
granting Rasier-PA, LLC (Rasier) statewide authorization at PUC Docket No. A-
2014-2424608; and (2) the January 29, 2015 Opinion and Order denying the
Petition for Reconsideration of the December 5, 2014 Opinion and Order filed by
Executive Transportation Company, Inc., et al. (Executive). The December 5,
2014 Opinion and Order provided that the PUC would issue a Certificate of Public
Convenience (CPC) evidencing Rasier’s right to operate as an experimental
common carrier if Rasier filed its Statewide Compliance Plan (Compliance Plan).4
Petitioners are existing taxi cab companies that provide services in the areas
proposed to be served by Rasier. Petitioner Capital City Cab Service (Capital)
argues that the PUC failed to follow its regulations and abused its discretion when
it issued the December 5, 2014 Opinion and Order, and that the PUC’s decision is
not supported by substantial evidence. Petitioner Keystone Cab Service, Inc., et
al., (Keystone) argues that the PUC erred by misapplying its regulations, by
finding that Rasier was an experimental service, and by reversing the decisions of
the PUC’s Administrative Law Judges (ALJs) without substantial evidence.
Executive argues that the PUC abused its discretion when it denied reconsideration
because Rasier proposed to provide transportation service as a carrier without
4
Related to these matters is Executive’s appeal of the PUC’s denial of reconsideration of
Rasier’s Allegheny County authorization at PUC Docket No. A-2014-2416127 (on appeal at No.
252 C.D. 2015).
2
having custody of any vehicles and therefore the PUC lacked jurisdiction to
adjudicate Rasier’s Application.5 For the following reasons, we affirm.
Rasier is a wholly-owned subsidiary of Uber Technologies, Inc. (Uber).
(Hr’g Tr., August 18, 2014 at 53, 60, R.R. at 211, 218.)6 On June 2, 2014, Rasier
filed with the PUC an Application (Application) for experimental service offering
passenger trips between points in Pennsylvania7. Uber owns the smartphone
5
Executive states in its brief that it seeks review of the January 29, 2015 Opinion and
Order denying its Petition for Reconsideration of the December 5, 2014 Opinion and Order.
(Executive’s Br. at 1.) As such, the merits of the December 5, 2014 Opinion and Order are not
directly before us at No. 253 C.D. 2015. As we note subsequently here and in more detail in our
Opinion at No. 252 C.D. 2015, Executive challenged the PUC’s jurisdiction to consider Rasier’s
Application before the ALJs, again before the PUC on de novo review, and again in its Petition
for Reconsideration. However, the PUC’s jurisdiction is not implicated directly by our review of
the denial of reconsideration as we look simply to whether the issues raised on reconsideration
were considered previously during the review of Rasier’s Application. We nonetheless address
Executive’s argument that the PUC lacks authority even to consider Rasier’s Application as it
provides important guidance with regard to the experimental service provisions at 52 Pa. Code §
29.352, and the PUC fully addresses the issue in its brief. Thus, we can conduct effective
appellate review of this question notwithstanding Executive’s limiting its appeal to the denial of
reconsideration. Moreover, it is black letter law that issues concerning an agency's
jurisdiction are never waived and can be raised sua sponte by the court. Blackwell v. State Ethics
Commission, 567 A.2d 630, 636 (Pa. 1989).
6
The hearing transcript is from the hearing on the Application held before the ALJs.
7
The PUC’s regulation at 52 Pa. Code § 29.352 governs certification for the provision of
experimental service, and provides as follows:
In order to advance and promote the public necessity, safety and
convenience, the Commission may, upon application, grant a new certificate or an
amendment to an existing certificate in order to allow to be provided a new,
innovative or experimental type or class of common carrier service. An
application for a certificate or amendment shall state that it is an application for an
experimental service. Holders of experimental certificates shall abide by this
chapter except those which the Commission shall explicitly state do not apply.
(Continued…)
3
application, digital platform, and technology (App) Rasier has licensed. Rasier
uses the App to offer transportation to the public for compensation using non-
certificated drivers operating their personal vehicles. (Hr’g Tr. at 57, 75, 77, 90,
101-02, 262-63, R.R. at 215, 233, 235, 248, 259-60, 420-21.) Potential customers
create a user account with Uber and proffer an acceptable form of electronic
payment. (Hr’g Tr. at 55-57, R.R. at 213-15.) A customer who requests a ride is
paired by the App with the nearest driver available to accept passengers. The App
notifies the rider who then views a map showing the driver’s location, the driver’s
photograph, the vehicle type used by the driver, its license plate number, and an
estimated time of arrival. (Hr’g Tr. at 58, R.R. at 216.) Upon arrival, the driver
provides a ride as directed. The App charges the customer electronically when the
customer exits the driver’s vehicle. (Hr’g Tr. at 56, R.R. at 214.) Rasier in its
Application described its services as follows:
Applicant proposes to use a digital platform to connect passengers to
independent ride-sharing operators (“Operators”) with whom
Applicant intends to contract. Operators will use their personal,
noncommercially licensed vehicles for the purpose of providing
transportation services. The Applicant plans to license the Uber
technology to generate leads from riders who need transportation
services. Applicant does not own vehicles, employ drivers or
transport passengers.
(Application ¶ 14, R.R. at 4.)
Holders of experimental certificates shall abide by an[y] additional regulations or
requirements, including informational and reporting requirements, which the
Commission shall stipulate upon granting the certificate. A certificate for
experimental service shall be valid only until the service is abandoned, until 2
years have elapsed from the time the certificate was approved or until the
Commission enacts amendments to this chapter pertaining to the new class of
service represented by the experimental service, whichever event occurs first.
4
Following protests to its Application, Rasier amended it to add the following
restrictions to its operating authority:
To transport, by motor vehicle, persons in the experimental service of
shared-ride network for passenger trips between points in
Pennsylvania, excluding trips which originate or terminate at points in
the Counties of Beaver, Clinton, Columbia, Crawford, Lawrence,
Lycoming, Mercer, Montour, Northumberland and Union and in that
portion of the County of Luzerne which is located within an airline
distance of 15 statute miles of the limits of the Borough of Berwick,
Columbia County.
(Restrictive Amendment and Stipulation ¶ 1, R.R. at 71.)
The various Petitioners filed protests, and Rasier filed Preliminary
Objections (POs) thereto. The Application, protests, and POs were assigned to two
Administrative Law Judges (ALJs), who denied the POs. Thereafter, the ALJs
held combined evidentiary hearings on Rasier’s Application and on Rasier’s
separate application for authorization to operate in Allegheny County (Allegheny
Application).
On September 25, 2014, the ALJs issued a Recommended Decision in which
they determined that the PUC had jurisdiction over the Application because Rasier
intended to provide “experimental service” per 52 Pa. Code § 29.352.
(Recommended Decision, R.R. at 777-820.) On that basis, the ALJs concluded
that Rasier must obtain a CPC in order to facilitate transportation service within the
Commonwealth. However, the ALJs found that Rasier failed to meet its burden of
proof under 52 Pa. Code § 41.14, which is the PUC’s statement of policy regarding
5
the evidentiary criteria used to decide motor carrier applications.8 As a result, the
ALJs denied the Application. Rasier and various Petitioners filed Exceptions to
the Recommended Decision and Replies thereto.
8
This statement of policy provides:
(a) An applicant seeking motor common carrier authority has a burden of
demonstrating that approval of the application will serve a useful public purpose,
responsive to a public demand or need.
(b) An applicant seeking motor common carrier authority has the burden of
demonstrating that it possesses the technical and financial ability to provide the
proposed service. In addition, authority may be withheld if the record
demonstrates that the applicant lacks a propensity to operate safely and legally. In
evaluating whether a motor carrier applicant can satisfy these fitness standards,
the Commission will ordinarily examine the following factors, when applicable:
(1) Whether an applicant has sufficient capital, equipment, facilities and other
resources necessary to serve the territory requested.
(2) Whether an applicant and its employees have sufficient technical expertise and
experience to serve the territory requested.
(3) Whether an applicant has or is able to secure sufficient and continuous
insurance coverage for all vehicles to be used or useful in the provision of service
to the public.
(4) Whether the applicant has an appropriate plan to comply with the
Commission’s driver and vehicle safety regulations and service standards
contained in Chapter 29 (relating to motor carriers of passengers).
(5) An applicant’s record, if any, of compliance with 66 Pa.C.S. (relating to the
Public Utility Code), this title and the Commission’s orders.
(6) Whether an applicant or its drivers have been convicted of a felony or crime of
moral turpitude and remains subject to supervision by a court or correctional
institution.
(c) The Commission will grant motor common carrier authority commensurate
with the demonstrated public need unless it is established that the entry of a new
(Continued…)
6
Based upon de novo review of the record and the Recommended Decision to
deny Rasier’s Application, the PUC conditionally authorized Rasier to provide
experimental service at its November 13, 2014 Public Meeting and entered an
Opinion and Order on December 5, 2014. (December 5, 2014 Opinion and Order,
R.R. at 895-982.) In its December 5, 2014 Opinion and Order, the PUC
determined that its jurisdiction over common carriers is not limited to carriers that
own vehicles. The PUC also determined that Rasier’s service is experimental
because its business model did not easily conform to any existing category of
regulated common carriage. The PUC found that it could authorize Rasier as a
common carrier because the full record met the evidentiary standards at 52 Pa
Code § 41.14, and Appendix A of the December 5, 2014 Opinion and Order,9
imposes significant ongoing operating and compliance conditions designed to
achieve an appropriate balance of market flexibility and public safety in accord
with the Public Utility Code.10 Thus, the PUC indicated that it would issue a CPC
allowing Rasier to operate as an experimental common carrier once Rasier filed a
Compliance Plan. Rasier filed its Compliance Plan on December 24, 2015,
addressing the conditions set forth in Appendix A of the December 5, 2014
carrier into the field would endanger or impair the operations of existing common
carriers to an extent that, on balance, the granting of authority would be contrary
to the public interest.
(d) Subsections (a) and (c) do not apply to an applicant seeking authority to
provide motor carrier of passenger service under §§ 29.331 -- 29.335 (relating to
limousine service).
52 Pa. Code § 41.14.
9
Appendix A, R.R. at 979-82.
10
66 Pa. C.S. §§ 101-3316.
7
Opinion and Order regarding driver integrity, vehicle safety, adequate insurance,
and other provisions. By Order entered January 29, 2015, the PUC approved the
Compliance Plan (Compliance Order) and authorized Rasier to operate in
accordance with the December 5, 2014 Opinion and Order. No party appealed the
Compliance Order.
Executive filed the Petition for Reconsideration on December 22, 2014,
which Rasier answered on January 2, 2015. In addition to entering the Compliance
Order on January 29, 2015, the PUC denied Executive’s Petition for
Reconsideration. Capital, Keystone, and Executive, among others, petitioned this
Court for review, and we consolidated those matters for consideration.11
Executive argues that the PUC lacks jurisdiction because Rasier is neither
“fish nor fowl” under the Public Utility Code categories of “common carrier”12 or
11
Our review is limited to determining if a constitutional violation or error has occurred;
if the decision is in accordance with law; and if substantial evidence supports necessary findings
of fact. PECO Energy Co. v. Pennsylvania Public Utility Commission, 791 A.2d 1155, 1160
(Pa. 2002); 2 Pa. C.S. § 704. Evidence is substantial when relevant and of a nature that a
reasonable mind might accept as adequate to support a conclusion. Lancaster County v.
Pennsylvania Labor Relations Board, 82 A.3d 1098, 1109-10 (Pa. Cmwlth. 2013). We review a
denial of reconsideration for abuse of discretion. J.A.M. Cab Company, Inc. v. Pennsylvania
Public Utility Commission, 572 A.2d 1317, 1318 (Pa. Cmwlth. 1990). PUC abuses its discretion
if the denial of reconsideration demonstrates bad faith, fraud, capricious action, or abuse of
power. Columbia Gas of Pennsylvania, Inc. v. Pennsylvania Public Utility Commission, 535
A.2d 1246, 1248 (Pa. Cmwlth 1988).
12
Section 102 of the Public Utility Code sets forth the following relevant definitions for
this term:
“Common carrier.” Any and all persons or corporations holding out,
offering, or undertaking, directly or indirectly, service for compensation to the
(Continued…)
8
public for the transportation of passengers or property, or both, or any class of
passengers or property, between points within this Commonwealth by, through,
over, above, or under land, water, or air, and shall include forwarders, but shall
not include contract carriers by motor vehicles, or brokers, or any bona fide
cooperative association transporting property exclusively for the members of such
association on a nonprofit basis.
“Common carrier by motor vehicle.” Any common carrier who or which
holds out or undertakes the transportation of passengers or property, or both, or
any class of passengers or property, between points within this Commonwealth by
motor vehicle for compensation, whether or not the owner or operator of such
motor vehicle, or who or which provides or furnishes any motor vehicle, with or
without driver, for transportation or for use in transportation of persons or
property as aforesaid, and shall include common carriers by rail, water, or air, and
express or forwarding public utilities insofar as such common carriers or such
public utilities are engaged in such motor vehicle operations, but does not include:
(1) A lessor under a lease given on a bona fide sale of a motor vehicle where
the lessor retains or assumes no responsibility for maintenance, supervision, or
control of the motor vehicles so sold.
(2) Transportation of school children for school purposes or to and from
school-related activities whether as participants or spectators, with their
chaperones, or between their homes and Sunday school in any motor vehicle
owned by the school district, private school or parochial school, or transportation
of school children between their homes and school or to and from school-related
activities whether as participants or spectators, with their chaperones, if the
person performing the school-related transportation has a contract for the
transportation of school children between their homes and school, with the private
or parochial school, with the school district or jointure in which the school is
located, or with a school district that is a member of a jointure in which the school
is located if the jointure has no contracts with other persons for the transportation
of students between their homes and school, and if the person maintains a copy of
all contracts in the vehicle at all times, or children between their homes and
Sunday school in any motor vehicle operated under contract with the school
district, private school or parochial school. Each school district shall adopt
regulations regarding the number of chaperones to accompany students in
connection with school-related activities.
(3) Any owner or operator of a farm transporting agricultural products from, or
farm supplies to, such farm, or any independent contractor or cooperative
(Continued…)
9
“broker.”13 Executive argued this issue at the hearing, in briefs and in Exceptions,
filed a Petition for Reconsideration, and now challenges the PUC’s January 29,
agricultural association hauling agricultural products or farm supplies exclusively
for one or more owners or operators of farms.
(4) Any person or corporation who or which uses, or furnishes for use, dump
trucks for the transportation of ashes, rubbish, excavated and road construction
materials. This paragraph does not include the use or furnishing of five-axle
tractor trailers.
(5) Transportation of property by the owner to himself, or to purchasers
directly from him, in vehicles owned and operated by the owner of such property
and not otherwise used in transportation of property for compensation for others.
(6) Transportation of voting machines to and from polling places by any
person or corporation for or on behalf of any political subdivision of this
Commonwealth for use in any primary, general, municipal or special election.
(7) Transportation of pulpwood, chemical wood, saw logs or veneer logs from
woodlots.
(8) Transportation by towing of wrecked or disabled motor vehicles.
(9) Any person or corporation who or which furnishes transportation for any
injured, ill or dead person.
66 Pa. C.S. § 102.
13
Section 2501(b) of the Public Utility Code defines “Broker” as:
“Broker.” Any person or corporation not included in the term “motor
carrier” and not a bona fide employee or agent of any such carrier, or group of
such carriers, who or which, as principal or agent, sells or offers for sale any
transportation by a motor carrier, or the furnishing, providing, or procuring of
facilities therefor, or negotiates for, or holds out by solicitation, advertisement, or
otherwise, as one who sells, provides, furnishes, contracts, or arranges for such
transportation, or the furnishing, providing, or procuring of facilities therefor,
other than as a motor carrier directly or jointly, or by arrangement with another
motor carrier, and who does not assume custody as a carrier.
66 Pa. C.S. § 2501(b).
(Continued…)
10
2015 Opinion and Order denying reconsideration. Capital and Keystone argue that
the record lacked substantial evidence to support the PUC’s findings under 52 Pa.
Code § 41.14, which is used to determine motor carrier market entry. Keystone
also argues that Rasier’s Transportation Network Company (TNC) service14 is an
ordinary taxi service not eligible for consideration as an experimental service under
52 Pa. Code § 29.352.
The PUC contends Petitioners’ arguments focus on the Application as filed
and the ALJs’ Recommended Decision, neither of which was approved by the
PUC, and further, that Petitioners fail to acknowledge how the December 5, 2014
Opinion and Order substantially modified Rasier’s Application to ensure operation
in the public interest and in compliance with applicable law. The PUC points out
that Appendix A of the December 5, 2014 Opinion and Order provides detailed
requirements for insurance, driver integrity, vehicle safety, record keeping reports,
and audits. Rasier is required to submit quarterly filings to the PUC that
demonstrate continued compliance with each requirement, and Rasier’s failure to
comply with any of the requirements may result in the revocation of Rasier’s
operating authority.
14
The PUC, in its brief in the related matter at No. 252 C.D. 2015 at page 4, describes a
TNC generally as:
a fee-based motor carrier employing various modes of mobile digital computing
to connect passengers with prequalified drivers of passenger vehicles. TNCs
utilize electronic and social media forms of communication, including mobile
applications and web-based reservation services, to facilitate these connections.
The TNC business model generally does not seek to own vehicles or employ
drivers.
(The PUC’s 252 C.D. 2015 Br. at 4.)
11
The PUC further posits that the Public Utility Code authorizes conditional
approval and modifications of CPC applications, and that conditional approval is
appropriate in the case of experimental common carrier market entry. It points out
that Pennsylvania courts have determined that the Public Utility Code encourages
flexibility in motor common carrier market entry. Hence, the PUC is not to limit
otherwise lawful market entry unless such entry would result in unrestrained and
destructive competition. In addition to Rasier’s presentation of substantial
evidence of demand or need, there is record evidence to show that: there is an
emerging nascent market for TNC services; there is significant public demand for
such services; and Rasier is one of multiple participants in that market. The PUC
argues that the December 5, 2014 Opinion and Order reflects a cautious policy of
safely accommodating public demand for the convenience offered by TNC
services, and that we should affirm the Order.
As a preliminary matter, we address the PUC’s role in the provision of
public utility services. Among its other responsibilities under the Public Utility
Code, the PUC necessarily regulates how various utilities are impacted by
technological advances. See, e.g., Popowsky v. Pennsylvania Public Utility
Commission, 937 A.2d 1040 (Pa. 2007) (addressing impacts of Verizon-MCI
merger on telecommunication services); Pottsville Union Traction Company v.
Pennsylvania Public Service Commission, 67 Pa. Super. 301 (1917) (bus routes
versus electric railways). Here, as characterized by the PUC, “the major
innovation of the TNC model is its ability to utilize so-called non-professional
drivers in private vehicles to provide transportation service during periods of peak
12
demand -- without excess carrying costs traditionally associated with managing
volatile demand peaks.” (The PUC’s Br. at 14.) Given that rubric, we agree with
the PUC that the experimental service regulation at 52 Pa. Code § 29.352
accommodates forms of motor carrier service not specifically enumerated in the
Public Utility Code or in the PUC’s regulations on a provisional basis “to advance
and promote the public necessity, safety and convenience.”
As to the PUC’s jurisdiction, Executive contends that the PUC lacks
authority even to consider Rasier’s Application because it does not have custody of
any vehicles. While we agree that Rasier’s TNC service does not fit neatly into
any existing category of passenger service, we note that the PUC is entitled to
deference when it applies the experimental service regulation to find jurisdiction
over TNC services. See Popowsky, 937 A.2d at 1058-59 (holding that with regard
to “recent and revolutionary changes affecting the telecommunications industry,”
PUC’s “judgments concerning weight and balancing of associated policy
considerations connected with utility certification is . . . entitled to . . . considerable
deference”). The Public Utility Code’s definition of “[c]ommon carrier by motor
vehicle” in Section 102 states that PUC has jurisdiction over common carriers
“whether or not [the carrier is] the owner or operator of such motor vehicle.” 66
Pa. C.S. § 102. Thus, the Public Utility Code does not require that a carrier have
custody of any vehicles and so does not exclude the type of services offered by
Rasier. Here, Rasier proposes to provide transportation services to the public for
compensation “whether or not [Rasier is] the owner or operator of such motor
vehicle.” Id. We, thus, conclude that the PUC appropriately exercised jurisdiction
over Rasier’s TNC services under the category of “[c]ommon carrier by motor
13
vehicle,” 66 Pa. C.S. § 102, and the experimental service provision of the
regulations, 52 Pa. Code § 29.352.
Turning now to Petitioners’ assertions regarding substantial evidence, we
first address their assertion that the record lacked substantial evidence to support
the PUC’s findings under 52 Pa. Code § 41.14. As evidenced by the title of that
provision, 52 Pa. Code § 41.14 is a statement of policy rather than a binding norm.
Section 41.14(a) and (b) establish the burden for both applicants and challengers
by stating what quantum of evidence is required from an applicant. Subsection
41.14(c) provides the evidence needed from an existing carrier seeking to
challenge the market entry of a new competing carrier, and imposes a heavy
burden on the challenger. A demonstration of mere business attrition of a
competitor is insufficient to deny a CPC, Railway Express Agency, Inc. v.
Pennsylvania Public Utility Commission, 171 A.2d 860, 863-64 (Pa. Super. 1961),
and proof of adequate market service does not bar entry of new applicants, Morgan
Drive Away, Inc. v. Pennsylvania Public Utility Commission, 512 A.2d 1359,
1360-61 (Pa. Cmwlth. 1986). However, an existing carrier may prevent a new
applicant’s market entry by showing that public harm would result because of
unrestrained and destructive competition in the proposed market. Seaboard Tank
Lines, Inc. v. Pennsylvania Public Utility Commission, 502 A.2d 762, 765 (Pa.
Cmwlth. 1985). Our review of the record indicates that the PUC’s findings are
supported by substantial evidence and that Petitioners did not meet their burden to
show that Rasier’s TNC service would result in unrestrained or destructive
competition.
14
The PUC found in the December 5, 2014 Opinion and Order that: there is a
demand or need for Rasier’s TNC service; Rasier has the technical and financial
ability to provide the proposed experimental service; Rasier established that it had
the capital, equipment, and other resources necessary to provide experimental
service; Rasier possesses the technical expertise to operate its experimental
service; Rasier will secure sufficient and continuous insurance coverage for all
vehicles to be used or useful in the provision of service to the public; and, Rasier
has an appropriate plan to comply with the Commission’s driver and vehicle safety
regulations and service standards.
As to the demand or need for Rasier’s services, we have held that “‘[a]n
applicant is not required to show demand for its service at every point in the
proposed territory; it is sufficient to show that need exists within the area generally
served.’” Ace Moving & Storage, Inc. v. Pennsylvania Public Utility Commission,
935 A.2d 75, 78 (Pa. Cmwlth. 2007) (quoting Yellow Cab Company v. Public
Utility Commission, 673 A.2d 1015, 1018 (Pa. Cmwlth. 1996)); Morgan Drive
Away, Inc., 512 A.2d at 1360 (it is sufficient to demonstrate a cross-section of
demand or need in service territory). Here, the record shows the existence of
customer demand and/or need for the TNC category of service proposed by Rasier.
Testimony by a Rasier competitor regarding a successful online and mobile
app and web platform called Cabbygo that began in Pittsburgh in 2013 and in
Harrisburg in 2014 shows a demand for these types of services. (Hr’g Tr. at 187-
88, R.R. at 345-46.) In addition, the PUC points to the fact that it has recently
authorized TNC services other than Rasier’s. (The PUC’s Br. at 15, 25-27, 34.)
15
The record also contains testimony that establishes need as multiple witnesses
testified that their needs are better served by TNC-type services as opposed to
traditional taxi services. (Hr’g Tr. at 35-37, 42-43, 158-70, 179-80, R.R. at 193-
95, 200-01, 316-28, 337-38.) Based upon our review, we conclude that this
testimony demonstrates the necessary customer demand or need for Rasier to meet
its burden.
With regard to whether Rasier possesses the technical and financial ability to
provide the experimental TNC service required by 52 Pa. Code § 41.14(b), we
likewise conclude that there is substantial evidence to support the PUC’s findings.
Subsumed in this examination are the factors outlined in the December 5, 2014
Opinion and Order as outlined above. Petitioners Capital and Keystone focus first
on the period of time that Rasier operated without PUC authorization, suggesting
Rasier thus has a propensity to operate illegally. The PUC addressed Rasier’s prior
unauthorized provision of TNC services in the December 5, 2014 Opinion and
Order and suggests that the requirements in Appendix A to the December 5, 2014
Opinion and Order will address Rasier’s operations going forward, noting that it is
prosecuting a complaint for the prior unauthorized operation against Rasier’s
parent, Uber, at Pa. Public Utility Commission, Bureau of Investigation and
Enforcement v. Uber Technologies, Inc. et al., Docket No. C-2014-2422723.
Given that Rasier now is operating under the PUC’s authorization, we conclude
that the PUC did not err in finding that Rasier does not have a “propensity” to
operate illegally. See Brinks, Inc. v. Pennsylvania Public Utility Commission, 456
A.2d 1342, 1344 (Pa. 1983) (holding that “the mere fact of prior operation in
violation of a court order or the Commission’s authority does not preclude a carrier
16
from obtaining lawful authority in a subsequent proceeding before the
Commission.”).
As to whether Rasier established that it had the capital, equipment, and other
resources necessary to provide experimental service, the PUC noted that Rasier
was licensing the Uber App and that it is wholly owned by Uber, thus providing
Rasier access to Uber’s financial resources. The PUC also found persuasive that
Rasier has successfully operated similar ventures in Washington D.C. and cities
throughout the United States. (December 5, 2014 Opinion and Order at 72.) The
PUC also noted that Rasier will not own vehicles or employ drivers, and concluded
that under these specific facts, Rasier established that it has the necessary capital,
equipment, and other resources. (December 5, 2014 Opinion and Order at 72.)
Given that the PUC is entitled to considerable deference in the construction and
application of its regulations, Popowsky, 937 A.2d at 1058-59, we cannot say that
this is error.
We, likewise, conclude that Rasier will have sufficient technical expertise
and experience to provide its proposed TNC service. The December 5, 2014
Opinion and Order details that Rasier would use employees within its management
structure to facilitate operational functions, such as regulatory compliance,
assisting operators, handling complaints, auditing documents, and suspending
drivers. (December 5, 2014 Opinion and Order at 40-45.) The PUC reasoned that
Uber and its employees have successfully started and operated similar ventures in
160 cities and 40 countries around the world, including Washington D.C., which,
although larger, would serve as an analogous market to Pennsylvania cities.
17
(December 5, 2014 Opinion and Order at 40-45.) As noted previously, the
December 5, 2014 Opinion and Order also required Rasier to file a Compliance
Plan, in accordance with Appendix A, detailing how it would operate in
conformance with its CPC during the two-year experimental authorization.
As to insurance coverage, we note that the PUC provided a detailed
discussion on this issue in its December 5, 2014 Opinion and Order. (December 5,
2014 Opinion and Order at 41-58.) The PUC examined how Rasier proposed to
comply with the insurance requirements of 52 Pa. Code § 41.14(b)(3), and also
examined the testimony of Uber’s Director of insurance and risk management.
Moreover, the PUC also established additional insurance compliance conditions
prior to Rasier’s exercise of experimental operating authority. (December 5, 2014
Opinion and Order at 54-55.) Given this thorough discussion and the record
evidence, we conclude that the PUC’s finding that Rasier will have sufficient
insurance coverage is well supported.
The last factor is whether Rasier has an appropriate plan to comply with the
PUC’s driver and vehicle safety regulations and service standards. The PUC
concluded that the criminal background checks and driving history record review
proposed by Rasier exceeded the requirements of its regulations. (December 5,
2014 Opinion and Order at 34-35.) The PUC required Rasier to conduct criminal
and driver history record checks both at the time of driver sign-up and annually
thereafter, and to retain the records for two years and three years, respectively.
(December 5, 2014 Opinion and Order at 35-36.) As to vehicles, the PUC
established additional conditions for the operation of vehicles by Rasier drivers
18
over and above those proposed by Rasier. (December 5, 2014 Opinion and Order
at 36.) Specifically, the PUC required Rasier to “ensure that the vehicles used in
its operation[s] successfully pass PennDOT inspections” annually, and to maintain
verifiable records of such for three years. (December 5, 2014 Opinion and Order
at 39-40.) The PUC also required Rasier to ensure that the vehicles used “remain
in continuous compliance with the [PUC’s] vehicle standards at 52 Pa. Code §§
29.402(1) and (2) and 29.403,” that those vehicles “be subject to periodic
inspection as set forth at 52 Pa. Code §§ 29.406 and 29.407,” and that Rasier
“maintain verifiable records thereof for three years.” (December 5, 2014 Opinion
and Order at 40.) Finally, the PUC required that Rasier “not permit the use of
vehicles older than eight model years,” and that it “maintain verifiable records
thereof for three years.” (December 5, 2014 Opinion and Order at 40.) Given the
record and the PUC’s placement of additional requirements on Rasier’s operations,
we conclude that there is substantial evidence to support the PUC’s finding.
With regard to the arguments that the PUC erred or abused its discretion in
rejecting the ALJs’ Recommended Decision, the PUC is the ultimate finder of fact
where it reviews an ALJ decision. Lloyd v. Pennsylvania Public Utility
Commission, 17 A.3d 425, 429 (Pa. Cmwlth. 2011). This Court has held that an
ALJ decision may be superseded by a contrary decision of the PUC that is based
on substantial evidence. Pennsylvania Retailers’ Associations v. Pennsylvania
Public Utility Commission, 440 A.2d 1267, 1272 (Pa. Cmwlth. 1982). As noted
above, evidence is substantial when relevant and of a nature that a reasonable mind
might accept as adequate to support a conclusion. Lancaster County v.
Pennsylvania Labor Relations Board, 82 A.3d 1098, 1109-10 (Pa. Cmwlth. 2013).
19
Here, as described above, the record contains evidence that, viewed through this
standard, supports the PUC’s findings. In addition, our decision in Pennsylvania
Retailers’ Associations does not support Petitioners’ assertion that the PUC
overrode the ALJs’ Recommended Decision without substantial evidence or
sufficient reason. Therein, we stated that the Public Utility Code “provides that
[PUC] when it reviews the initial decision of a presiding officer ‘has all the powers
which it would have in making the initial decision. . . .’ A broader grant of power
to the [PUC] in the disposition of initial decisions in case[s] it chooses to review
can scarcely be imagined.” Pennsylvania Retailers’ Associations, 440 A.2d at
1273 (quoting G.G. & C. Bus Company v. Pennsylvania Public Utility
Commission, 400 A.2d 941, 944 (Pa. Cmwlth. 1979)). We, thus, find no error on
this basis.
Having resolved the general allegations of error asserted, we now turn to the
more specific issues raised by Petitioners. Petitioner Capital argues that the Rasier
tariffs filed throughout the proceedings, including as recently as March 15, 2015,
have not met the requirements of 52 Pa. Code § 23.1115 (regarding the filing of
15
This regulation provides as follows:
(a) Before any carrier furnishes or offers to furnish any service, it shall file with
the Commission tariffs showing the rates or other compensation demanded for
such service, including COD services, and all rules governing the furnishing of
the service or the application of the rates demanded therefor, if the filing of a
tariff with the Commission is not construed as an approval by it of the rates or
rules contained therein, or as a waiver of any other requirement of 66 Pa.C.S. §§
101--3315.
(b) The tariffs of carriers also subject to the jurisdiction of a Federal regulatory
(Continued…)
20
rates) because of a lack of specificity. Capital did not file exceptions raising this
issue, and, therefore, it is not preserved for our review. Pittsburgh-Johnstown-
Altoona Express, Inc. v. Pennsylvania Public Utility Commission, 554 A.2d 137,
145 (Pa. Cmwlth. 1989). However, we note that the December 5, 2014 Opinion
and Order considered the rates charged by Rasier in the context of the Allegheny
Application. Based on our review of the record, we agree with the PUC that
Rasier’s tariff reflects the circumstances of Pennsylvania’s TNC market, i.e., the
economic climate in which Rasier will operate and, thus, hold that Capital’s
argument, even if preserved, would fail.
Executive argues that the PUC abused its discretion when it denied
Executive’s Petition for Reconsideration in the January 29, 2015 Opinion and
Order. We find no error on review.16 Executive’s jurisdictional and custody and
control issues raised in the Petition for Reconsideration were not new issues. They
were discussed and addressed both in the Recommended Decision and in the
December 5, 2014 Opinion and Order. On that basis, the PUC did not abuse its
discretion in denying reconsideration. J.A.M. Cab Company, Inc. v. Pennsylvania
Public Utility Commission, 572 A.2d 1317, 1318 (Pa. Cmwlth. 1990).
body shall correspond, so far as practicable, to the form of those prescribed by
such Federal agency.
52 Pa. Code § 23.11.
16
In the companion case to this one at No. 252 C.D. 2015, the sole issue presented is
Executive’s assertion that the PUC abused its discretion when it denied reconsideration where
the PUC lacks jurisdiction to adjudicate Rasier’s Allegheny Application because Rasier proposed
to provide transportation service as a carrier without having custody of any vehicles. In that
opinion we extensively reviewed the basis for the PUC’s denial of reconsideration and concluded
that the PUC did not err as Executive’s arguments were raised and addressed at multiple levels
before the Petition for Reconsideration was filed. The same result applies here.
21
In summary, the PUC’s conditional approval of Rasier’s TNC service in the
December 5, 2014 Opinion and Order requires Rasier to address public demand in
a safe and cost-effective manner. As the PUC points out, and we agree, the
December 5, 2014 Opinion and Order is consistent with other recent TNC
approvals and is a reasonable and factually supported determination.
Determinations of this type are properly reserved to the exercise of PUC discretion.
Waltman v. Pennsylvania Public Utility Commission, 596 A.2d 1221, 1225 (Pa.
Cmwlth. 1991), disagreed with on other grounds by Bethlehem Steel Corporation
v. Pennsylvania Public Utility Commission, 713 A.2d 1110 (Pa. 1998). For these
reasons, we affirm the December 5, 2014 Opinion and Order and the January 29,
2015 Opinion and Order denying Executive’s December 22, 2014 Petition for
Reconsideration.
________________________________
RENÉE COHN JUBELIRER, Judge
President Judge Pellegrini concurs in result only.
22
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Capital City Cab Service, :
:
Petitioner :
:
v. : No. 238 C.D. 2015
:
Pennsylvania Public Utility :
Commission, :
:
Respondent :
Keystone Cab Service, Inc., Good :
Cab, LLC, United Cab, LLC, EZ :
Taxi, LLC, :
:
Petitioners :
:
v. : No. 240 C.D. 2015
:
Pennsylvania Public Utility :
Commission, :
:
Respondent :
Executive Transportation Co. Inc., :
Aceone Trans Co., AF Taxi, Inc., :
AG Taxi, Inc., AGB Trans, Inc., :
Almar Taxi, Inc., TS Cab, Inc, BAG :
Trans, Inc., BNG Cab Co., BNA Cab :
Co., BNJ Cab, Inc., Bond Taxi, Inc., :
BSP Trans, Inc., Double A Cab Co., :
FAD Trans, Inc., GA Cab, Inc., :
GD Cab, Inc., GN Trans, Inc., God :
Bless America Trans, Inc., Grace :
Trans, Inc., IA Trans, Inc., Jarnail :
Taxi, Inc., Jaydan, Inc. LAN Trans, :
Inc., LMB Taxi, Inc. MAF Trans, :
Inc., MDS Cab, Inc., MG Trans Co., :
Noble Cab, Inc., Odessa Taxi, Inc., :
RAV Trans, Inc., Rosemont Taxicab :
Co, Inc., S&S Taxi Cab, Inc., :
SAJ Trans, Inc., Saba Trans, Inc., :
SF Taxi, Inc., Society Taxi, Inc., :
Steele Taxi, Inc., TGIF Trans, Inc., :
V&S Taxi, Inc., VAL Trans, Inc., :
VB Trans, Inc., and VSM Trans, Inc. :
BM Enterprises, Inc., t/a A.G. Taxi, :
Bucks County Services, Inc., Dee :
Dee Cab Company, Germantown :
Cab Company, Ronald Cab, Inc., :
t/a Community Cab, Shawn Cab, :
Inc., t/a Delaware County Cab, :
and Sawink, Inc., t/a County Cab, :
:
Petitioners :
:
v. : No. 253 C.D. 2015
:
Pennsylvania Public Utility :
Commission, :
:
Respondent :
ORDER
NOW, this 19th day of April, 2016, the Public Utility Commission’s
December 5, 2014 Opinion and Order and the January 29, 2015 Opinion and Order
denying Executive Transportation Co. Inc., et al.’s December 22, 2014 Petition for
Reconsideration are AFFIRMED.
________________________________
RENÉE COHN JUBELIRER, Judge