NOTICES
PENNSYLVANIA PUBLIC UTILITY COMMISSION
Order
[33 Pa.B. 3240] Public Meeting held
June 12, 2003Commissioners Present: Terrance J. Fitzpatrick, Chairperson; Robert K. Bloom, Vice Chairperson; Aaron Wilson, Jr.; Glen R. Thomas; Kim Pizzingrilli
Pennsylvania Public Utility Commission v. Alexa Cab Company; R-00038492
Order By the Commission:
On March 24, 2003, Michael R. Etemad, the owner of the Alexa Cab Company, filed an application, in the form of a letter-petition, seeking approval to increase the citywide taxi fares charged by Philadelphia taxi medallion owners and drivers. The letter-petition was filed on behalf of the Philadelphia Taxi Medallion Owners/Drivers.
Insofar as the Public Utility Code only allows changes in rate increases to be sought by public utilities, including common carriers (66 Pa.C.S. § 1308), and limits requests for PUC investigations into the uniform rates for medallion taxi cabs in Philadelphia to medallion holders and licensed drivers (66 Pa.C.S. § 2410(c)), a request for an increase in these rates by an association of medallion holders and drivers has not been made by an appropriate entity. We recognize, however, that Mr. Etemad, as the owner of the Alexa Cab Company and a medallion holder, may lawfully make a request. Therefore, we will treat this as a request for an increase in rates by the Alexa Cab Company.
Mr. Etemad alleges that there has not been a rate increase in taxicab fares in Philadelphia since 1990 and that insurance prices have gone up over 200%, vehicle depreciation has gone up over 350%, gasoline has risen 150% and auto repair parts/labor have increased over 300%. He further alleges that SEPTA has substantially increased its fares from 1990 when it cost $1.25 per ride to its present rate of $2 per ride, a 60% increase.
Mr. Etemad also contends that the City of Philadelphia and the tourism industry of Philadelphia in many respects view the taxicabs in Philadelphia as its first line of making an impression on tourists and business travelers. In 2000, during the National Republican Convention, the PUC auctioned 161 taxi medallions that all required a new ''A'' titled vehicle to be placed on the street. Not only did the city get an immediate face-lift with the introduction of 161 new cabs, but also many other cab operators bought newer vehicles to compete. Mr. Etemad claims the taxicab medallion owners absorbed the associated costs.
As a result, Mr. Etemad proposes the following rate increases for citywide Philadelphia taxi medallion holders and drivers:
1. Flag drop should increase to $2.60.
2. Mileage should increase to $1.95 per mile.
3. Waiting time should increase to $22 per hour.
4. Flat charge from Center City to the Airport, and vice versa, should increase to $25.
Mr. Etemad, however, included no affidavit, verification, proposed tariff pages, financial information or other supporting information with his letter-petition.
Discussion
In addressing this matter, we must note at the outset that due to the uniform rates requirement of section 2410(b) the existing and the proposed rates do not apply to any one company, but to all taxi medallion companies doing business in Philadelphia (66 Pa.C.S. § 2410(b)). Comparing the proposed rates to existing rates shows that an increase in the flag drop from the current $1.80 to $2.60 would be a 44% increase, that an increase in the per mile rate from the current $1.80 to $1.95 per mile would be an 8% increase, that an increase in the waiting time from the current $.20 per minute or fraction thereof ($12 per hour) to $.37 per minute or fraction thereof ($22 per hour) would be an 83% increase, and that an increase in the flat charge from and to the Philadelphia International Airport from the current $20 to $25 would be a 25% increase. Given the level of increases sought in the letter-petition, we find that this would be a request for a general increase in rates pursuant to 66 Pa.C.S. § 1308(d), if Mr. Etemad had filed proposed tariffs and appropriate supporting data.
We recognize that operating expenses, such as insurance, fuel, vehicles and their maintenance, depreciation and taxes, may have changed since the uniform rates for medallion taxicabs were established in 1991. Alexa Cab which operates 20 medallion taxicabs and, as such, has standing to petition the Commission to reopen the prior rate investigation regarding Philadelphia medallion taxis. 66 Pa.C.S. § 2410(c). At the same time, since taxi rates have not been decoupled from earnings, the Commission needs to investigate the effect on earnings of the rate structure proposed in the letter-petition before it can determine whether the proposed rates are just and reasonable. In the transportation industry, the typical method is with reference to an operating ratio, that is, the ratio of reasonable and legitimate operating expenses to annual operating revenues. Moreover, while Chapter 24 did provide for the initial establishment of taxi rates for medallion owners and drivers, nothing in Chapter 24 indicates that general ratemaking provisions contained in Chapter 13 are not applicable to subsequent motor carrier utility rate increase requests.
Given the percent rate increases sought in the letter-petition, these proposed increases for all customers, if approved, would likely exceed the gross annual intrastate revenues threshold for a general rate increase defined in section 1308(d) of the Public Utility Code. 66 Pa.C.S. § 1308(d). Section 1308(d) applies to any public utility defined in paragraph 1(i), (ii), (vi) or (vii) in 66 Pa.C.S. § 102 (definition of ''public utility'') and to any public utility which the Commission designates by rule or regulation. 66 Pa.C.S. § 1308(d). The utilities described in the subsections described do not include common carriers by motor vehicle. However, our regulations at 52 Pa. Code § 23.114(f) states:
The provisions of 66 Pa.C.S. § 1308(d) apply to every public utility described in 66 Pa.C.S. § 102 (relating to definitions), except common carriers of property.Therefore, a common carrier by motor vehicle, except those which carry only property, is a public utility to which section 1308(d) applies as long as the common carrier's tariff filing satisfies the percentages stated in section 1308(d) which qualify the tariff filing as a general rate increase.
In general, section 1308(d) requires that a utility seeking an increase in rates provide sufficient information concerning, but not limited to, wages, maintenance, taxes, depreciation and fuel expenses as well as all revenues derived from the regulated service such as fares and leases. An application for an increase in rates should contain the necessary schedules, tables and related material to show that the requested increase is justified. As previously noted, that is not the case here.
As such, Mr. Etemad's letter-petition contains insufficient information on which to determine whether the proposed changes in rates for citywide taxi service in Philadelphia may be lawful, just, reasonable and in the public interest. Normally, under these circumstances, we would suspend the filed tariff for a period not to exceed 7 months; however, no proposed tariffs have been filed. Therefore, to perfect its application for a rate increase, we will direct Alexa Cab Company to file appropriate data concerning its annual expenses and revenues to support its request for an increase in rates. It should also file a proposed tariff with a 60 day notice period.
In addition, Mr. Etemad's letter-petition does not request an investigation into the prevailing wage rate or a prevailing maximum lease amount. These two items may well be intertwined with medallion taxicab rate structure. Our January 10, 1991, Order at Doc. Nos. I-900003, R-901702 and R-901703 established a prevailing wage rate and prevailing maximum lease amount. Twelve years have also passed since the prevailing wage rate and prevailing maximum lease amount have been examined. Therefore, any Commission investigation of uniform medallion taxicab rates should also include an investigation of the prevailing wage rate and prevailing maximum lease amount.
Finally, we would remind Alex Cab Company and any other parties to this proceeding that, under section 315(a) of the Public Utility Code (66 Pa.C.S. § 315(a)), the party advocating the change in rates has the burden of proof to show that the proposed rate is just and reasonable. Because the rates which may be established as a result of this proceeding shall apply to all medallion taxi cab companies in Philadelphia, it will be necessary for the Commission staff to obtain information on the annual expenses and revenues previously mentioned from many companies to verify and evaluate the proposed rates. We will expect that all taxi cab companies thus contacted will cooperate with the staff in the provision of information. We would also caution that, under Commonwealth law and Commission regulations, any corporation or company appearing before an administrative agency in an adjudicatory proceeding must be represented by counsel.
Therefore,
It Is Ordered That:
1. Alexa Cab Company shall have 60 days to file appropriate tariffs and supporting data; if not, the letter-petition will be deemed denied.
2. If Alexa Cab Company does file the tariffs and information referenced in ordering paragraph 1, the matter will be assigned to the Office of Administrative Law Judge for the prompt scheduling of such hearings as may be necessary culminating in the issuance of a Recommended Decision.
3. The Commission's Bureau of Transportation and Safety is hereby directed to participate as a party and to conduct an investigation into the lawfulness, justness and reasonableness of the existing rates, prevailing wage rate and prevailing maximum lease amount paid by drivers to owners.
4. A copy of this Order shall be published in the Pennsylvania Bulletin.
5. A copy of this Order shall be served upon the Philadelphia taxi medallion owners, the City of Philadelphia and the Philadelphia Parking Authority.
6. Notice of the request for an increase in rates by the Alexa Cab Company in cities of the first class be published in the Philadelphia Inquirer and the Philadelphia Daily News.
JAMES J. MCNULTY,
Secretary
[Pa.B. Doc. No. 03-1331. Filed for public inspection July 3, 2003, 9:00 a.m.]
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