Emails: Parking Authority worked with taxis to stop Uber

Posted: January 29, 2016

PHILADELPHIA Parking Authority officials have publicly portrayed themselves as unbiased enforcers in the war between the flailing taxi industry and insurgent ride-sharing companies like UberX and Lyft.

You might have heard their standard line: PPA is simply enforcing state law by cracking down on transportation network services, which use mobile apps to connect drivers and riders but are not licensed to operate within city limits.

But emails obtained by the Daily News show that the parking authority has teamed with the taxi industry that it regulates in an effort to ensure that ride-sharing services remain illegal in Philadelphia.

In some cases, the PPA appears to have led the opposition, urging taxi medallion owners to fight ride-sharing bills that would cut into their profits.

At least one medallion owner said he participated in PPA undercover stings that have led to the impoundment of UberX cars.

An inherent conflict of interest is at work: The PPA has a financial interest in a flourishing taxi industry.

'Follow your lead'

In 2014, emails flew back and forth as PPA officials and taxi medallion owners pushed lawmakers to "carve out" Philadelphia from any bill that would legalize UberX and Lyft in Pennsylvania.

"FYI. The House is the problem. We all need to focus there, hard. Is your guy OK?" PPA general counsel Dennis Weldon wrote to Everett Abitbol, co-founder of Freedom Taxi, in September 2014.

Three days later, Weldon followed up with Abitbol: "Again, word is that the House is more resistant to a Philly carve out. I think this is an area where your lobbyist can bring some real world info to the members as to the impact this bill will have on the legally operating medallion business. Just my $.02, your lobbyist may see a different path."

"We have a call this afternoon with bravo group," Abitbol responded, referring to Freedom Taxi's lobbyist. "Will follow your lead."

Weldon then asked Abitbol to come in that day to meet with him and "Vince" - a reference to Vince Fenerty, the PPA's executive director.

Days earlier, Jim Ney, director of the PPA's taxicab and limousine division, had sent an email telling industry members to contact lawmakers "immediately to register your support" for a bill that would carve out Philadelphia from a bill legalizing ride-sharing.

When Ney learned from a taxi company that State Rep. Joe Hackett was co-sponsoring that bill, he forwarded the email to Weldon, Fenerty and other PPA executives with the note: "FYI. Some positive news from Rep. Hackett's office."

'My rider stung me'

UberX and Lyft operate throughout much of Pennsylvania under a temporary two-year agreement with the state Public Utility Commission. They have not been able to obtain licenses in Philadelphia, but during its first year in Philly, starting in October 2014, UberX says, it provided rides to about 700,000 people.

The PPA has responded by impounding its cars in undercover sting operations. At least one sting was pulled off with an assist from Police Department horses.

Taxi medallion owners apparently have been assisting as well.

On Nov. 2, 2014, Jon Brennan, 31, picked up a man and woman who had ordered an UberX ride. The couple appeared to be fighting in the backseat; Brennan now says he thinks they were acting.

When he arrived at the drop-off point near 4th and Spring Garden Streets, he immediately was blocked in by a Philadelphia police officer. A PPA officer reached into Brennan's Audi S4 and took the keys out of the ignition.

"What I didn't know until later was that my rider had stung me," Brennan said.

Later that day, the receipt for the ride was emailed from a Hotmail address to John Broggi, a PPA patrol supervisor, and William Schmid, deputy director of PPA's taxicab and limousine division.

"This is the guy from today that Matt took," the sender wrote.

Taxi medallion owner Jeff Sterin answered the phone Tuesday when a reporter called a number listed on parking authority records alongside the Hotmail address.

"I was doing those stings," Sterin conceded. He said that the rider "Lana" listed on the receipt was his sister, medallion owner Lana Marcus, but that he could not recall if he was in the car that day. "There are a lot of these kinds of stings," he said.

Sterin declined to say how he got involved in PPA stings because the cases had not been adjudicated.

Brennan, who lives in Mount Laurel, said he was shocked to learn that the PPA and civilians in the taxi industry apparently are working together in undercover stings.

"Does the mayor know that they're doing this?" Brennan asked.

Safety or PPA $$$?

Mayor Kenney, who took office earlier this month, is an UberX supporter who has used the service.

Last year, while on City Council, he sponsored a resolution calling on the state to legalize UberX and Lyft in Philadelphia, saying that city residents are being "unfairly discriminated against" by state regulations that allow the companies to operate everywhere but in Philadelphia.

"We use them all the time," Kenney spokeswoman Lauren Hitt said of Uber.

Ride-sharing services have broad political support, particularly in Philadelphia.

City Council unanimously approved Kenney's resolution last year; the city's entire state Senate delegation voted in November for a bill to legalize ride-sharing, and Gov. Wolf believes that the services "should be in Philadelphia and all through Pennsylvania, and we should be finding ways to help them grow," spokesman Jeff Sheridan said.

But the internal emails show that the PPA has attempted to shape legislation to limit competition to the taxi industry.

"Jim! Lets put the nail in the coffin! Please with the cherry on top. The whole country is watching us. Thanks," Alex Friedman, a taxi medallion owner who once compared UberX to ISIS, wrote to Ney in June 2014.

Three months later, Weldon e-mailed Friedman, taxi medallion owner Gene Sterin and lobbyist Ron Raymond, seeking an urgent meeting as lawmakers were preparing to take up ride-sharing legislation. The subject line: "LEGISLATION IMPORTANT."

Weldon wrote: "I know that this was a quick request, but major issues are taking shape in Harrisburg RIGHT NOW that may permanently and negatively impact the medallion business, your business."

Big spenders

Lobbying records show that the PPA has paid $565,000 to the Philadelphia firm Pugliese Associates since 2007. Recently, company president Rocco Pugliese has been lobbying against legislation supported by UberX and Lyft.

Dave Thomas, chief counsel to Senate Majority Leader Jake Corman, said the PPA had been lobbying to "kill the bill" by giving the PPA the authority to impose stringent requirements on ride-sharing companies.

"In our minds, if they got their version, it basically would prevent Uber from being able to operate in Philadelphia, which seemed to be their ultimate goal," Thomas said of the PPA. "All along the way, we've been fighting them."

A Senate bill, which would legalize UberX and Lyft in Philadelphia, passed by a vote of 48-2 in November. It has been referred to the House Consumer Affairs Committee.

Taxi medallion owners and drivers oppose ride-sharing companies because they provide a cheap alternative to taxis and cut deeply into their profits. The PPA claims that the services are unsafe.

"The PPA's primary concern has always been and continues to be public safety," Fenerty said in a statement. "Because of the absence of regulation, there is no assurance that any of these drivers have the appropriate training, or have had their driving records and backgrounds checked for any prior criminal convictions. We also do not know if any of these ride-sharing vehicles have been inspected or if they are insured."

Uber spokesman Matt Wing said that the company performs background checks and that drivers must ensure that their cars pass state inspection. He said each UberX trip in Philadelphia is covered by a minimum $1 million of primary commercial liability insurance.

"Every issue the PPA raised are things Uber already does on its own," Wing said. "The only difference is the PPA doesn't get to collect the fees associated with them, which means less money for them to spend on lobbyists."

Lyft spokeswoman Chelsea Wilson said: "Any evidence that shows public officials coordinating with the industries they regulate to harm competition should be of major concern to policymakers."

Barry Kauffman of the watchdog group Common Cause Pennsylvania, said it's not unusual for government agencies to "get captured by the industries they are supposed to regulate."

The agencies are charged with protecting consumers, but at the same time have an obligation to keep the industry intact and healthy.

Of course, the industry itself is also a source of revenue for regulatory agencies, Kauffman noted. The PPA collects millions of dollars per year in taxicab-related fees.

"There is a bit of a balancing act," he said.

Kauffman said the PPA hiring its own lobbyist to influence state government is potentially problematic.

"We've always been troubled by the fact that government agencies would have their own lobbyists. Technically, your elected officials are your lobbyists to state government," Kauffman said. "This is, at best, an awkward relationship, and the public needs to pay attention to that."

'We pay, but they don't'

Friedman, who as general manager of the companies All City and Checker Cab owns about half the city's 1,630 taxi medallions, said he would like the PPA to be even more aggressive in clamping down on UberX and Lyft.

"This is more a question of parity than a question of 'being on the same side' with PPA," said Friedman, president of the Pennsylvania Taxi Association.

For instance, Friedman said, he pays the PPA a yearly assessment fee of $1,721 per car, plus twice-a-year inspections - $200 for the first one, then $75 or $100 for the second, depending on mileage.

UberX and Lyft avoid these and other fees - including the price of per-vehicle taxi medallions, which once sold for around $500,000 but have dropped in value amid ride-sharing competition. That creates an uneven playing field that puts taxis at an extreme disadvantage, Friedman said.

"We pay, but they don't," Friedman said. "Uber decided they don't need to pay PPA anything."

State Rep. Robert Godshall, chairman of the House Consumer Affairs Committee, said statewide ride-share legislation would be a no-brainer if not for Philadelphia.

"The Philadelphia situation is what messes the whole thing up," he said.

Godshall said his staff is working on a bill that strikes a compromise.

"We don't want to bankrupt them and have those medallions worth nothing," Godshall said of the taxi industry. "We're trying to do our best to put the whole thing together and allow everyone to live."

benderw@phillynews.com

215-854-5255

On Twitter: @wbender99

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