“The bottom line is: The regulation of taxi cabs is changing now, and it’s going to change forever.”
Dennis Weldon, general counsel to the Philadelphia Parking Authority (PPA), made this declaration Tuesday morning during a freewheeling, 20-minute discussion at the PPA’s monthly board meeting. On Monday, the General Assembly passed a bill to legalize transportation network companies (TNCs) like uberX and Lyft in Philadelphia. Governor Tom Wolf is expected to sign the bill, which makes the PPA the primary regulator of TNCs in Philadelphia and makes the Authority responsible for collecting a 1.4 percent levy on TNC revenues from rides originating in Philadelphia.
That fee will be split between the PPA and the School District of Philadelphia, with two-thirds going to schools. The question of how the PPA will collect those taxes, and ensure they get what the new law requires the TNCs to pay, led to an unusually frank dialogue between PPA directors and staff.
As the board prepared to vote on the PPA’s budget for the coming year, Director Russ Wagner, an accountant by trade, expressed concerns that the Authority couldn’t accurately guess how much money it would spend or receive related to regulating TNCs. Relatedly, various changes to taxi regulations made in response to lawsuits and the new legislation muddled the ability to predict how much the PPA’s Taxi and Limousine Division would bring in from medallion cabs. Currently, taxi medallion cabs pay $1,819 per cab; the new legislation replaces that with 1 percent levy on their gross revenues. Taxis will continue to pay additional inspection and other regulatory fees.
PPA staff estimate that the agency will get around $1 million in new revenues from the TNCs, but expects medallion taxi-related revenues to drop around $2 million. Weldon said it was an open question still whether the fees on TNCs would cover the PPA’s expenses.
PPA staff is still working their way through the 120-page bill, which passed Monday afternoon. According to Weldon, the revenue language the PPA expected to be included in the bill was stripped out and replaced with the 1.4 percent tax. It’s unclear what kind of audit powers the PPA might have over TNCs to ensure they pay what is owed. Wagner noted that auditing a TNC’s books would be technologically intensive, given that all of their records would be electronic. That might require outside expertise or new hires at the PPA.
Aside from prepared remarks at the start of the board meeting, new PPA Executive Director Clarena Tolson didn’t say much, other than to chime in at one point during a discussion over what the City might do in response to the new legislation, and whether the Revenue Department might step in. “I know some folks at Revenue,” said Tolson, who ran the office under Mayor Michael Nutter.
At one point during the discussion, PPA Director Andrew Stutzman asked if taxis might be allowed to charge flexible rates, as TNCs do. Weldon responded that wasn’t statutorily authorized now, but added that the entirety of Philadelphia’s taxi regulatory scheme needed to be reassessed at this point. “We can’t sit here and just make rules, we need to listen to what taxicab people want,” said Weldon.
Taxi owners in the audience seemed encouraged by the PPA’s comments about working with the industry to deregulate it, expressing support during public comments prior to the meeting.
PPA Chairman Joe Ashdale ended the meeting by calling for the board’s committee on taxis and limos to meet to discuss the regulatory changes in more detail.