At PSC hearing, Md. regulators press Uber on surge pricing

In a Friday Maryland Public Service Commission hearing, commissioners, attorneys and the state People’s Counsel questioned a proposed settlement between the commission and Uber.
The hearing, held at the commission’s downtown offices in the William Donald Schaefer Tower, included testimony from a commission staffer and questions from an attorney for Yellow Transportation, a cab company that has challenged Uber’s entrance into the Baltimore market.
The settlement would address the transportation company’s higher-end UberBLACK and SUV services. Uber would drop its appeal against the commission now headed to the Maryland Court of Special Appeals and, through subsidiary Drinnen LLC, provide the PSC with an up-to-date list of drivers. Drinnen would apply for a motor carrier permit under state law and its drivers would accept trip requests using the Uber app. In return, commission staff will examine proposed regulations creating definitions for a transportation broker, surge pricing and digital platform, all of which apply to Uber’s services
No Uber officials attended the hearing. However, an affidavit was entered on behalf of Zuhairah Washington, general manager of Uber DC, which oversees Uber’s operations in Washington, Maryland and Northern Virginia.
“[Uber] will make clear to Maryland consumers who utilize Drinnen’s partner-driver’s services that Drinnen is a registered common carrier, including by providing appropriate disclosures and information about Drinnen on [Uber’s] website,” Washington wrote.
The affidavit noted that Uber has employed the Drinnen subsidiary as an intermediary in two cases. It is licensed to operate as a broker for for-hire transportation in Virginia, and is licensed in Houston as a mobile dispatch service. However, the Drinnen name appears nowhere on Uber’s pages for its Houston or Virginia services.

Tough questions

The commissioners questioned the relationship between Uber and Drinnen, the need to substitute the subsidiary for Uber in the motor carrier permit and other technical concerns. The staffer who took the stand said in response to questions that, should the settlement be approved, staff examining Drinnen’s permit application would take Uber’s regulatory history into account.
Surge pricing was also a hot topic for the commission. Many of Uber’s markets, it seems, have had a surge pricing horror story, from the Baltimore woman who racked up a $362 tab on Halloween to the recent Sydney hostage scare, where Uber officials there briefly defended its algorithm quadrupling rates for riders trying to flee the city’s central business district.
The concept of surge pricing is new to Maryland, but not specifically forbidden.
“To my knowledge, none have [asked to use such pricing], but they could,” said Christopher Koermer, director of transportation services for the PSC, the sole witness.
Yellow Transportation attorney Todd Chason and People’s Counsel Paula Carmody were visibly frustrated that no Uber officials turned out for testimony or cross-examination in the hearing, as commissioners questioned the workings of surge pricing and Uber’s future plans.
“There’s simply not enough evidence,” Chason said at the hearing’s close. “I think that they have failed to make a prima facie case for approval of this settlement.”
The settlement would only impact UberBLACK and SUV services, but Koermer indicated a settlement on Uber’s other services is forthcoming.
Post-hearing briefs by the PSC’s staff counsel, Chason, Carmody and Uber will be submitted next month. A work group examining potential regulations for services like Uber is expected to have its draft ready by late January.