Pennsylvania fines Uber $11M for operating without approval

Pennsylvania regulators fined Uber $11.4 million on Thursday -- a record for the utility commission -- for operating for six months in 2014 without the required approval. The company said it would appeal.

The Public Utility Commission, which also regulates buses and taxis, voted 3-2 for a penalty that was considerably lower than the $50 million fine recommended by a pair of administrative law judges in November.

Commissioners who voted for it justified the lower amount because they said the ride-hailing company has modified its practices to comply with state rules and has not generated many consumer complaints while operating under emergency and experimental authority.

San Francisco-based Uber Technologies, Inc. drew criticism from the judges last year for continuing to operate a month after being issued a cease-and-desist order and for what were described as obstructive actions during the investigation. Commissioners John Coleman and Gladys Brown said the company's actions warranted punishment.

"It must be recognized that Uber has deliberately engaged in the most unprecedented series of willful violations of commission orders and regulations in the history of this agency," they said in proposing the smaller fine. "A record number of proven violations should be expected to result in a record setting fine."

The two commissioners who voted no said the fine was excessive compared to the commission's past actions. Its previous record fine was $1.8 million over an electric generation supplier's handling of a guaranteed savings plan for customers.

Uber spokesman Jason Post said the company was "shocked" by the fine amount, adding Uber's actions did not harm anyone and the commission "subsequently approved the same operations."

Other cases with large fines, said commissioner Pamela Witmer, "involved incidents of serious bodily injury, fatalities, significant property damage and/or patterns of unsafe business practices that jeopardized public safety." She called for "a more measured and reasonable outcome."

Commissioner Robert Powelson, the other no vote, said he would have preferred a $2.5 million fine.

"When Uber launched its operations in Pennsylvania, they were operating in a legally gray area," Powelson said. "The commission should take this into account."

The two judges wrote in November that Uber had argued it was providing needed alternatives, it used a broker license held by a subsidiary and there was no proof that harm occurred.

Uber was fined more than $7 million in January for failing to provide sufficient information to California regulators.

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