Philadelphia taxi drivers win fair competition with ridesharing services, 2015-2016

The Taxi Drivers Alliance of Philadelphia (TDAP) and the Philadelphia Limousine Association (PLA), major labor unions in Pennsylvania, United States, represented the majority of taxi and limo drivers in the city of Philadelphia and its surrounding areas. With the rise of ride-sharing services such as UberX and Lyft since 2012, the taxi and limo industry in Philadelphia felt increasingly threatened, as more and more people opted for their cheaper counterparts.

On 16 December 2015, the TDAP and PLA organized a rally at Philadelphia City Hall, demanding the city council and the Philadelphia Parking Authority (PPA), which regulates car passenger service, enforce the law and stop then-unauthorized UberX and Lyft from operating in the city. Over 100 taxi and limo drivers – some of whom affiliated with the more expensive and legal Uber black car service – clogged the streets in downtown Philadelphia. Dozens of cars circled around City Hall, while dozens more blocked traffic on other major avenues in Center City. Some drivers parked their cars and marched towards the City Hall with signs reading “Ubernomics Equals Drivers’ Poverty” and “Public Safety in Danger.”

Ali Razak, head of the Philadelphia Limousine Association, said during the demonstration that the PPA needed to understand the importance and urgency of this issue, and that “Uber is taking money out of people’s pockets.” Razak acknowledged that the limo drivers earned a decent living when UberBlack came to Philadelphia, bringing a new technology – its mobile-app dispatch and payment service – that helped the limo industry, but he also stated that when the low-cost UberX service entered the area, it gained an unfair advantage in its competition with traditional taxi and limo services, which operated at a much higher cost due to regulations and thus charged  a higher price than UberX. As passengers chose the cheaper UberX over the traditional taxis and limos, “incomes [of taxi and limo drivers] collapsed.”

Police deployed heavily during the 75-minute protest, which Police Inspector John Heath referred to as a “mess.” A taxi driver was detained and ticketed, but he was not charged. Local public buses had to detour around the blockaded areas, causing much inconvenience but drawing more public attention to the issue.

In response to the protest, the PPA stated in its press releases that it understood the drivers’ concerns, and that the drivers were not protesting the existing regulations but instead about “UberX and Lyft breaking the law” (they operated without permits and oversight from the city authority). The Parking Authority had been enforcing its ban on the illegal ride-sharing services, impounding some cars. However, the sheer scale of UberX’s operation in Philadelphia and its surrounding areas made it virtually impossible to shut it down.

Uber, on the other hand, said that it understood drivers’ frustration, but it blamed the PPA’s regulations and suggested that riders were looking for an alternative. Uber spokesman Craig Ewer stated that the PPA “subject[s] drivers to obsolete vehicle restrictions and onerous insurance requirements” – it required limo drivers to pay an annual fee of $404 per vehicle for a PPA sticker and $130 to renew a chauffeur's permit. Ewer also suggested that the operation of UberX in Philadelphia had benefited 22,000 drivers and “hundreds of thousands [of] passengers.”

Continuing the anti-ride-sharing efforts, the TDAP and PLA, along with Philadelphia Limousine Association, Philadelphia Cab Association and the Philadelphia Taxi Association, organized and sponsored a rally at City Hall on 11 February 2016. Around 1,000 drivers attended the protest, honking their car horns and blocking traffic. In addition to citing concerns about drivers’ pay, they also expressed concerns about public safety, including the fact that UberX lacked handicap-accessible vehicles. They parked their cars around City Hall and marched to the building, holding up signs that attacked Uber CEO Travis Kalanick for not paying drivers enough, such as “50 hours a week for [$]300… can’t live like this” and “professional drivers are becoming homeless.”

During the protest, the demonstrators spray-painted their car windows with the slogan “UberBlack lives matter” and chanted, “What do we want? Justice! When do we want it? Now!” They demanded to speak with Mayor Jim Kenney on this issue, and received a response from a member of the mayor’s team that stated, “We understand your concerns.” Mayor Kenney also gave the drivers his own thoughts later that day, suggesting that the city council and the PPA had been working together to resolve the issue but faced many challenges regarding conflicts of jurisdiction with state legislation.

Philadelphia Police responded but did not make any arrest or attempt to disperse the crowd. SEPTA Transit Police Chief Thomas Nestel said that “the protest is peaceful.”

Uber responded to this protest with an unapologetic statement that attacked the taxi drivers for “resisting competition and innovation at every turn” and colluding with the PPA “to exclude Philadelphia from the regulations that govern UberX in 66 out of 67 counties in Pennsylvania.” The company also claimed that it had partnered with paratransit services in Philadelphia and been “praised by the author of the Americans with Disabilities Act (ADA) for increasing the mobility and freedom of drivers and riders with disabilities.”

In the days after the protest, representatives from the taxi and limo labor unions met Philadelphia District Attorney Seth Williams to express their grievances, while Uber Black drivers filed a suit against Uber over ride-sharing options during a time as UberX hit its milestone of 1 millionth ride in Philadelphia.

In March 2016, the drivers delivered a joint statement from the Philadelphia Limousine Association, Philadelphia Cab Association and the Philadelphia Taxi Association that represented 95 percent of limo drivers and 90 percent of taxi drivers. The anti-ride-sharing coalition threatened to strike when Philadelphia hosted the Democratic National Convention (DNC) in July 2016. All taxis and limos, which included those affiliated with the legal Uber black car service, would refuse to pick up passengers during the DNC when 35,000 to 50,000 people were expected to visit the city. The statement also claimed that UberX and Lyft had been operating “without any oversight, fail to serve the disabled, engage in so-called ‘surge pricing’, do not have to pay for any licenses to operate in the city and do not guarantee minimum wage.” Razak said that the taxi and limo drivers were facing unfair competition and they wanted a “level playing field” where transportation network companies like UberX and Lyft were legalized in the way that they faced the same regulations and permitting costs. The strike never took place.

In the following months, the drivers filed a lawsuit against the PPA claiming that the authority allowed UberX and Lyft to operate in the city with “minimal oversight” while imposing heavy fees on taxis, furthering the argument of unfair competition. The suit also stated taxi owners’ revenue had dropped 50 percent from 2015 to 2016. Brett Berman, the attorney that represented over 1000 drivers, said that the goal of the lawsuit was not to shut down UberX and Lyft’s operation in Philadelphia but “to treat us equally.” U.S. District Judge Michael Baylson heard the case in September 2016 over a request for a preliminary injunction against the PPA and asked for a clarification of the PPA’s position toward Uber and Lyft.

In the face of drivers’ legal pressure, the PPA announced a relaxation in regulations of the traditional taxi and limo industry on 5 October 2016. Dennis Weldon, the authority’s general counsel, said that the changes brought PPA policy in line with state law and allowed the taxi industry to adjust to an ever-changing market and avoid some of the costs that had made it difficult for them to compete with UberX and Lyft. The relaxed conditions allowed the taxi drivers to replace the shields between passengers and the front of the taxi with a camera system. Some inspection requirements were dropped, while the vehicle mileage limits were raised from 250,000 to 350,000, allowing the taxis to run for longer. The changes also gave taxi companies more freedom to use new technologies. For examples, the authority would not require that drivers use two-way radios, as computers were doing most dispatchs. The taxi companies were allowed the freedom to select different credit-card transaction processors. With these changes, taxis and limos would be able to operate at a much lower cost and thus increase their competitiveness in the transportation market with the ride-sharing services.

Ron Blount, president of the Taxi Workers Alliance of Philadelphia, hailed the regulatory changes as “a needed step to create parity between the traditional industry and the high-tech newcomers.” Meanwhile, Governor Wolf of Pennsylvania signed legislation on 4 November 2016 that allowed ride-sharing companies such as UberX and Lyft to operate legally in Philadelphia.