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As you may recall, we previously informed you of an order of the Pennsylvania Public Utility Commission regarding the relaxation of entry requirements for certain passenger motor carriers. The final Order of the Commission and the proposed changes in regulations have finally been approved by the Pennsylvania Independent Regulatory Review Committee and should take effect shortly. This Order does not affect the ability to provide service in Philadelphia; a separate application to the Philadelphia Parking Authority is required to serve the city.

Traditionally, in order to obtain a Certificate of Public Convenience, a prospective carrier was required to prove that:

  1. He was technically fit to provide the proposed service; 
  2. That he had the financial resources to provide the service; and 
  3. That there was a demand for the proposed service. 

In 2001, the Commission adopted a final policy statement that removed the demand component for limousine applicants. Further, the Commission’s jurisdiction over charter bus service was severely limited by federal statute. Technical fitness could be shown with evidence of working in the motor carrier industry and general business acumen. Financial fitness was shown through evidence of sufficient financial resources to purchase and maintain vehicles, obtain sufficient insurance, and develop dispatch systems, etc. A public demand or need for the proposed service could be shown by sworn testimony of witnesses who would use the service if the application was granted.

It was in the area of the third requirement – public demand or need – for the proposed service which generated the majority of protests by existing carriers to any application by a new entrant. In order to avoid extensive and expensive litigation, an application would be filed requesting that the Applicant be permitted to provide service in a certain “service territory”, often by naming specific counties. If protests were filed after public notice of the application, an Applicant, in order to avoid evidentiary hearings before an Administrative Law Judge, would decrease the service territory in order to attempt to remove the protests. If unsuccessful, the Applicant was forced to incur the cost of obtaining witnesses and going to trial. With the approval of the new regulations, the most hotly contested issue in any application will be eliminated.

This does not mean that no protests will occur. A Protestant can always claim that an Applicant is not technically fit or does not have the financial resources to open a new business. Existing carriers are given an advantage in meeting this requirement. While the Commission is retaining its current territorial framework and requires applicants to provide a specific geographic territory they wish to serve, an existing carrier is the beneficiary of a legal presumption of technical and financial fitness which is not enjoyed by a prospective carrier.

This theory is based upon the idea that the Commission has already made a determination that the existing carrier is fit to operate the business. Thus, a Protestant must produce evidence that an existing carrier is no longer technically or financially fit to operate the passenger transportation business. This does not mean that an existing carrier should apply for state-wide authority. Such an application could call into question the financial ability of an existing carrier to expand its business throughout the Commonwealth. 

In our opinion, a county by county expansion would enable an existing carrier to expand its business in a logical manner. It would also enable an existing carrier with limited territory within a county to expand that business throughout the entire county or to neighboring population centers.

Should you have any questions or wish to discuss the above in more detail, please feel free to contact Craig DollMargie Morris or Debbie Roscioli of our Firm’s Transportation Group.