Pennsylvania reinstates Uber's record $11.4 million fine

September 1, 2016 4:59 PM EDT

The logo of car-sharing service app Uber on a smartphone over a reserved lane for taxis in a street is seen in this photo illustration taken December 10, 2014. REUTERS/Sergio Perez/Illustration/Files


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By Jonathan Stempel

(Reuters) - A Pennsylvania regulator on Thursday reinstated a record $11.4 million fine against the popular ride-sharing service Uber Technologies Inc for operating illegally in the state in 2014.

By a 4-1 vote, the Pennsylvania Public Utility Commission rejected Uber's arguments that the penalty, six times larger than any it had imposed, was unnecessary and excessive.

Uber, in a statement, said it intends to appeal to a Pennsylvania state court, and overturn what it called an "absurd" fine imposed for "technical violations."

The PUC, which regulates taxi services and Uber rivals such as Lyft, had sanctioned Uber for having from February to August 2014 provided 122,998 rides in Pennsylvania without prior approval, and obstructing a state probe into its operations.

It imposed the fine on April 21, reducing it from the $49.9 million ordered by two administrative law judges.

The PUC agreed in June to reconsider the payout at Uber's request, over the objection of state officials who called the fine an "appropriate response" to Uber's "lawless conduct."

Uber offered new evidence that its service benefited Pennsylvanians, and that any fine should be capped at $1,000 per day, or roughly $200,000, and not based on the number of trips.

But the PUC said in its 77-page decision that Uber "failed to set forth any new and novel arguments that appear to have been overlooked or not addressed in our prior determination."

In its statement, Uber said the decision sends a "troubling message that Pennsylvania is unwelcoming to technology and innovation," and shows why the state needs "permanent, statewide ride-sharing legislation as soon as possible."

Based in San Francisco, Uber has drawn criticism from taxi companies losing market share, regulators concerned about driver and passenger safety, and riders upset over high prices.

The PUC previously found that Uber had in 2014 posed a risk to public safety by offering rides without proof its drivers, vehicles and insurance provisions met state standards.

It also said Uber's contention that it served only a limited customer base at the time "rang hollow," given its "persistent claim" that it provide its service to meet overwhelming demand, despite two cease-and-desist orders.

(Reporting by Jonathan Stempel in New York; editing by Alan Crosby)



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