Case Document 58-1 Filed 10/14/16 Page 2 of 129 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CHECKER CAB PHILADELPHIA, INC., ET AL., Plaintiffs, vs. PHILADELPHIA PARKING AUTHORITY, ET AL., Philadelphia, PA September 28, 2016 Defendants. 10:00 a.m. TRANSCRIPT OF MOTION HEARING BEFORE THE HONORABLE MICHAEL M. BAYLSON UNITED STATES MAGISTRATE JUDGE APPEARANCES: For the Plaintiffs: BRETT A. BERMAN, ESQUIRE SAMUEL S. DALKE, ESQUIRE FOX LLP 2000 Market Street 10th Floor Philadelphia, 19103 For the Defendants: PATRICK J. DORAN, ESQUIRE GARY D. FRY, ESQUIRE ARCHER GREINER, PC 1650 Market Street Philadelphia, 19103 DENNIS G. WELDON, ESQUIRE THE PHILADELPHIA PARKING AUTHORITY 3101 Market Street 2nd Floor Philadelphia, 19104 ?Transcribed by: DIANA DOMAN TRANSCRIBING P.O. Box 129 Gibbsboro, New Jersey 08026 Office: (856) 435-7172 Fax: (856) 435?7124 Email: dianadoman@comcast.net Proceedings recorded by electronic sound recording, transcript produced by transcription service. Case Document 58-1 Filed 10/14/16 Page 3 of 129 2 I ORAL ARGUMENT By: Mr. Berman 4, 8 By: Mr. Doran 5 I I Witnesses Direct gross Redirect Recross FOR THE PLAINTIFFS Robert Willis Robert Familant Frank Walker Khalid Alvi Everett Abitbol Inna Friedman FOR THE DEFENSE Dennis Weldon I I I EXHIBITS: Marked Admitted P-l Willis Chart 21 P-2 Willis Chart 21 P-3 Email notice from Parking Authority 119 Parking Authority?s order 158 D-61 Email dated Nov. 2014 167 Email dated March 2014 179 D-63 Letter 211 Case Document 58-1 Filed 10/14/16 Page 4 of 129 Willis - Direct (BER) 23 So, you have two numbers here. The orange one, the way to think about that is how many cars in the fleet are actually -- I?m sorry, the blue line. The blue line says how many cars in the fleet are deployed. That?s the scale that?s on the lefthand side. So, what this tells you, for example, is there were, you know -- I?m sorry, the right?hand side. The 90 over on the right-hand side, that tells you there?s about 90 cars deployed in 2012 at the end of 2012. And the orange line right above it will tell you, then, what the daily dollars per car was being delivered. That's the lefthand scale in dollars. So, the way to read this would be, on the very beginning of the chart on the left, you have 90 cars producing about $300 a day of revenue, and then this just charts that relationship all the way through to the end of our initial database run, which was in July, I think, of this year. So, the story it tells is -- by the way, this is sort of what a disaster looks like. This bit from this peak where you see this deep trough coming down, that -- that's where the train comes off the tracks for the industry. What it basically shows you is that from a peak of about $365 a day, the business ends up around $200 a day per car. Case Document 58-1 Filed 10/14/16 Page 5 of 129 Willis - Direct (BER) 24 So, if you imagine that all goodness and light in this business emanates from fares, there's really no place to pay bills other than what comes out of the fares. That?s the gross number that?s being pulled in. So, what this tells you is that by the time 2016 rolls around, the cars are now producing $200 a day instead of $300 a day of gross revenue. And so that's really that?s really the anguish. That?s what a trainwreck looks like in a statistical analysis is that -- that deep draw down. It's called, ?the maximum negative excursion.? So, the maximum negative excursion here is from about $365 to a little over $200. That?s about a 40?some?percent decrease in gross revenue. So, everybody has to live inside that daily revenue number, drivers, operators, the guy who changes the flap, the person who buys the car, sells the car, the administrative people, everybody has to live inside that number. THE COURT: All right, next question. BY MR. BERMAN: If you turn to can you please describe what P-2 shows us? A shows basically the total number of trips and the total daily fare production of of these cars in the data set. So, the -- what?s happening here is you?ll see the Case Document 58-1 Filed 10/14/16 Page 6 of 129 Familant Direct (BER) 54 accepted accounting principles. When loans become in arrears, there are statutory requirements that a financial institution must comply with. How much of Progressive Credit Union loan portfolio in Philadelphia is in a negative state? of the 38?ish million, at least 28 are already what A Well, called, ?trouble debt restructures.? That means that the borrowers have come to us, they were struggling to make their sta their required payments. They?ve asked for some sort of help in reducing their loan payment via a lower interest rate or extending their term, under GAAP regulations, that qualifies that loan as a trouble debt restructure. Has Progressive Credit Union began the process with respect to foreclosure on any of the medallions in those states? A Yes. And what happens when Progressive Credit Union takes the action of foreclosing on a medallion loan? A Well, after the foreclosure is completed, you try to resell the medallion if there's a buyer. Are you aware of any market for medallions in Philadelphia? A I am not. Once the foreclosure process is started, will medallion Case Document 58-1 Filed 10/14/16 Page 7 of 129 Familant Direct (BER) 55 taxicab operators be able to recover each of your individual loans? A Only if they somehow find that they hadn't been able to pay in the past. And unfortunately, the taxi industry is one of those places where what you didn?t make today, you can?t double-up tomorrow. Everyday is a day. So, if you didn?t make money on Monday, you can?t make two-times Monday on Tuesday because it?s just one day. Has Progressive Credit Union formed any impressions of the current state of your medallion owners? A They?re in significant distress. I don?t know if you?re interested in the emotional well?being, but there are people -- THE COURT: Well, not from you. THE WITNESS: Okay. THE COURT: All right, Don?t take that personally. so -- THE WITNESS: Well, I have a Master?s degree in Counseling, Your Honor. THE COURT: Well, that?s all right. Why don?t you rephrase the question? MR. BERMAN: Okay. BY MR. BERMAN: Have any of your -- MR. BERMAN: No further questions. THE COURT: All right. Cross-examination. Case Document 58-1 Filed 10/14/16 Page 8 of 129 Walker - Direct (BER) 70 and then try to put my seven sons through college, and you know, I needed the extra income, so, you know, it fit right in with me not completely stopping from driving altogether, so. After 1998, can you describe what it was like to be a taxicab driver in Philadelphia? A Oh, it was at that time, it was wonderful. I mean, because the business was booming. I mean, you couldn?t get tired because you were picking people constantly up. I mean, I remember some lZ?hour days went, like, two hours or whatnot because you were constantly picking people up. So, it was less chance of you getting tired during that time. So, I really liked it during those years. Were you able to make a living as a taxi driver? A It was wonderful. It was a good living, you made good money, and you know, you had, you know, good customers out there, people that wanted cabs because cabs was in high demand at that time. At some point in time, did the life of a taxicab driver in Philadelphia change? A Oh, yeah, I seen it from that time up until the present, and during the last part of 2014, it went almost down to in some cases, you know what I mean, 40-percent. What was 40?percent? A It went down 40-percent. Case Document 58-1 Filed 10/14/16 Page 9 of 129 Walker Direct (BER) 71 And A With the with the influx of the new system that they put in place with the UberX and and all of that. So, are you saying 40-percent impacted your take-home dollars, is that what you?re -- A Yeah, I mean, in other words, every $100 became 60. When you started in 1998 as a taxicab driver, was the Philadelphia Parking Authority the regulator? A They were no, PUC was decent. I mean, they -- I mean, they treated you halfway decent. You know what I mean, they had regulations in place, and the amount of regulations that we understood, you know what I mean, enough for us to, you know, abide by, and you know what I mean, and they didn?t give you no undue pressure and stuff like thatline with something, you knew it, and, you know what I mean, you had a chance to live in comfort zone and make your money and abide by the law. And did things change once you became regulated by the Philadelphia Parking Authority? A They -- I mean, with no disrespect, I mean, they -- they don?t -- they don?t give us a chance to make anything. They try to take all of our money that we earn, they?re at the hotels, they?re at the hospitals, they?re at the bars, they?re at the clubs, they?re at the casino, and when you pull up, they got drivers all up to the doggone -- up to the Case Document 58-1 Filed 10/14/16 Page 10 of 129 A Well, I mean, you couldn?t make your lease. doubling?up the lease. money home on days. to actually do more time, and I?m 60 years old, drive like I used to drive, locations, and they?re there before I?m there. Uber and are there? A Yes. And the customers, they?re like this. forward? A Absolutely devastated. I know taxi drivers that had their medallions were $500,000, telling me, medallion?s worth $80,000 now.? that -- of that medallion is now worth $80,000, to the -- the thing with the Uber and the UberX. ?Yeah, Frank, man, Walker Direct (BER) And then, around the end of ?14, there, ?15, it went -- it was -- it went really, really, really bad. And what impact did that have on taxicab drivers? I remember and I can?t And have you formed any impressions of what happened to their my That?s devastation because now they still have a and that?s, 74 I remember not being able to bring any I remember lots of instances where I had so now I have to drive more hours and take home less pay because of Uber because a lot of times, I go places to pick up jobs where I traditionally depended on, taxi drivers that you knew in in that same time period, 2014 mortgage on a $500,000 loan that they -- the current value of to me, not being an expert, that?s got to be a direct connection Case Document 58-1 Filed 10/14/16 Page 11 of 129 Alvi - Direct (BER) 84 Lyft, and slowly after, later on, I understand what is UberX and Lyft, they are illegal drivers. Those are operating in the City of Philadelphia. As soon as they take over our industry, and my income was getting down low. I have two sons, one daughter, which I this cab industry, I while I?m driving cab, I'm making good money, and they?re going to a good college, and now they are -- they are in a good position, they?re giving back to society, very good. And since the UberX and Lyft, illegal, illegal, operating in the city by the help of PPA, those who are backing up nowadays with them, and I don?t know whether they have an under?the?table agreement -- $350,000, and even I met with the Chairman Transport, Mr. Godshall, Bob Godshall, I think his name, and we have a meeting because when UberX and was working under the blessing of PPA, when I go to the Mr. Chairman, and I ask them and, he said, ?Is that? -- ?UberX and is illegal?? I said, ?Yes, but the PPA is not taking any action.? Since PPA don?t doing anything, and I think I read in the newspaper now it's almost 11,000 illegal drivers working in the City of Philadelphia under the name of UberX and Lyft, and PPA in the beginning was very good, impounding the cars. I think they did a very good job. In two years, they Case Document 58-1 Filed 10/14/16 Page 12 of 129 Alvi - Direct (BER) 85 impound 70 cars, oh my God, 70 cars illegal cars? What about 11,000 drivers who are working? On the other hand, they say they want to help TNC and meeting them and meeting in Philadelphia. They said they?re going to provide transportation to the people coming from other companies, instead of they give us a bad name. Drivers a bad name in Philadelphia. Because Uber and Lyft, they -- for a surge, which is, I think, the charge on the demand, you know, the $10 ride becomes a $50 ride, and they rip off all the Democrats, those who come to visit my city, Philadelphia. I?m a messenger of Philadelphia. Every cab driver is a messenger of the City. So, this not UberX and Lyft. They are they are thief. So, they -- because PPA gave permission to let them work in the City of Philadelphia, so they overcharge all these people, and we got a bad name in the City of Philadelphia, and they come under some agreement, under some agreement, and they allowed them. Instead of that we have, we have, Gellman Cab (phonetic), Rosemont Cab, we have Condi Cabs (phonetic), we have Mainline Cabs, they can bring their cabs, and together we can work and we all drivers can make money. Instead of that -- I think two months ago, they take Case Document 58-1 Filed 10/14/16 Page Abitbol - Direct (BER) 112 So, to clarify, my father had run a DOV operation, a driver-owned vehicle operation for quite some time, and overwhelmingly, on a day-by-day basis, drivers were returning medallions, to the extent that of his 100 cars, 37 of those medallions had been returned to him. And what time period are talking about those 37 were returned? A He started taking them -- getting them returned back in early -- well, really, late ?14, early ?15, and then the landslide has occurred most recently. Describe the landslide that you?ve just referenced. A You know, there?s a lot of drivers in the courtroom today, and I want to describe it this way because, you know, it?s pretty meaningful that everybody?s sitting here for this many hours, considering it?s preventing you guys from making a living, so I appreciate that. Drivers today, you know, with the decline of affairs, the increase of cost and regulation to do business as a taxicab, have decided to leave the industry because they work identically in an industry that?s completely unregulated. So, you know, for this business model to exist, there has to be parity. If there isn?t parity, right, or an equal playing field, is probably what we've all been discussing, it will not exist. You know, I think that what you have is an industry Case Document 58-1 Filed 10/14/16 Page 14 of 129 Abitbol - Direct (BER) 116 THE COURT: Yes. THE WITNESS: -- with Uber, yeah, I -- THE COURT: All right. THE WITNESS: would assume so. THE COURT: Or, like, borrow an automobile or something like that. THE WITNESS: Yeah, there?s leasing programs now. THE COURT: But is there any limitation on the amount of time per day that a person can drive? THE WITNESS: The Parking Authority creates a limitation. THE COURT: What is that? THE WITNESS: I think they can?t drive for more than 12 hours per day is what the regulations state, and I think they have a cap on -- the technology will physically shut the driver off. THE COURT: Okay. All right. We'll take a recess. I?d like to -- 45 minutes give you enough time to come back? MR. BERMAN: Yes, Your Honor, of course. THE COURT: So, we?ll resume at 1:20. MR. BERMAN: Thank you. THE COURT: All right, thank you. All right, court?s adjourned. (Proceedings adjourned at 12:34 (Luncheon recess.) Case Document 58-1 Filed 10/14/16 Page 15 of 129 Abitbol - Direct (BER) 122 So the -- despite the decrease in revenue, the assessment amounts have gone up. A They have, and they?ve increased. And the response I?ve received from the Parking Authority was they have a bigger budget, and therefore the shortfall is going to be paid by our medallion and our dispatch assessments. And are you aware of what the impact is if you don't pay these assessments? A Yeah. My vehicle and my medallion will be placed out of service, and I will be issued a violation. Going back to the fixed costs we discussed earlier, is debt service a fixed cost? A Yes, you can look at it as a fixed cost. Okay. So can you describe to the Court the impact of decreased revenue on paying your fixed expenses? A We have the inability to pay our fixed expenses. You know, revenue has been drilled down. Expenses on the Parking Authority have ramped up to where we have an inability to meet our debt service requirements, our insurance requirements, our premium requirements, with both our insurance companies and our banks. So how are you how are you operating? A I?m -- personal money is being invested, you know, from myself to keep the business afloat. In other markets, the regulatory changes that have occurred to assist taxi have given Case Document 58-1 Filed 10/14/16 Page 16 of 129 Abitbol - Redirect (BER) 186 was. Okay, so you're referring to Mr. Fenerty?s deposition testimony? A Correct. Okay. MR. DORAN: I have no further questions, Your Honor. THE COURT: All right. Any redirect? MR. BERMAN: I do. Do you want to take that break? THE COURT: No I want to do the redirect. REDIRECT-EXAMINATION BY MR. BERMAN: Mr. Abitbol, you heard a lot of questions from Mr. Doran with respect to credit card payments, correct? A Correct. Why is it that drivers don?t -- may not want to take credit card payments? A Well as I explained. You know, under the regulations, the drivers are not being well, they?re confined to a technology called Verifone. And because of that technology, there's a lag on them receiving money, right? And with a lag on receiving money, it makes them unable to conduct, you know, pay bills, live their day to day life. What happens to a taxicab owner or driver if cash is not accepted? A There's a violation issued. Case Document 58-1 Filed 10/14/16 Page 17 of 129 Abitbol - Redirect (BER) 187 What happens to Uber or if cash is not accepted? A Nothing. You heard a lot of testimony, a lot of questions with respect to the waiver process, right? A I did. Where you?ve had to file, I think you said, 12 or 15 waivers over time, right? A Correct. And you talked about the one or two that may have been granted, correct? A Correct. How many waivers has Uber and filed that you?re aware of? A I don?t believe any. How many regulations do they need to comply with? A None. What would they be filing waivers on? A Nothing. Are you aware of the Parking Authority requiring security cameras in Uber and vehicles? A They are not requiring. Are you aware of the Parking Authority requiring partitions in Uber and vehicles? As it was told to me by, I A They are not requiring. believe it was Bill Schmid, that they?re not going to require Case Document 58-1 Filed 10/14/16 Page 18 of 129 Abitbol - Redirect (BER) 188 them to have either of those in their vehicles. Are you aware of the Parking Authority requiring these in? person training sessions that your drivers are required to undertake? A They are not. Are you aware of the Parking Authority requiring Uber or drivers to get PPA driver certificates? A Absolutely not. Are you aware of the Parking Authority requiring drivers to clear tickets prior to driving an Uber or vehicle? A Definitely not. Are you aware of Uber and drivers having to wait at least 30 days that you testified that taxi drivers have to wait to get a certificate? A No. Are you aware of Uber and needing to use one of the two meter companies that is required in the city of Philadelphia for taxis? A They are not. Are you aware of Uber and having to have fixed rates? A They are not. After the passage of Act 85, did the Parking Authority in any way relax regulation as to taxis? This is well MR. DORAN: Your Honor, I object. beyond the scope of my cross-examination. Case Document 58-1 Filed 10/14/16 Page Abitbol - Recross (DOR) 200 THE COURT: Yeah. MR. BERMAN: Just to -- THE COURT: Well, I think you THE WITNESS: You want me to remove? THE COURT: Well, yeah. I think you -- well, you called her. You don?t want her to have any notes? MR. BERMAN: I don?t want her to have notes. THE COURT: All right, well come and get them. THE WITNESS: Okay. Sorry. I've never been testifying before. I DIRECT-EXAMINATION BY MR. BERMAN: Ms. Friedman, can you describe your role in the Philadelphia taxi industry? A Okay, I have multiple roles in the Philadelphia taxi industry. Number one, I am personally a lender. Number two, I represent Melrose Credit Union who lends into Philadelphia taxi industry who is the biggest lender in Philadelphia taxi industry. I used to be broker for the sale of the medallion, now I assist to broker in the sale of the medallions. And I also do a lot of administrative work for the taxicab drivers and the owners. Are you associated with a taxi company in Philadelphia? A Yes. We operate from the same office 215GetACab. And how many medallions are associated with 215GetACab? Case Document 58-1 Filed 10/14/16 Page 20 of 129 Abitbol - Recross (DOR) 202 provide them all the paperwork, fill out all the applications, and send them to the Melrose Credit Union for them to approve the loan. And Melrose Credit Union is the largest medallion lender in Philadelphia? A The way I understand, yes. Do you know roughly how much money they have invested in the Philadelphia market? A Yes. Originally it was over $100 million. And do you know what remains in the Philadelphia market? A Roughly, close to $100 million, still the same amount. Do you know the status of Melrose loans that are in default today? A Yes. Approximately 54 percent in those who are not paying on time. If you talk if you read the Melrose loan agreement, if you look at the collateral value, then it?s 100 percent. Do you also own medallions? A Yes. Are your loans also in default? A Yes. With Melrose Credit Union, or someone else? A Melrose Credit Union. You also talked about the fact that you were involved in personal lending in the medallion business? Case Document 58-1 Filed 10/14/16 Page 21 of 129 Abitbol - Recross (DOR) 208 Ms. Friedman, have you lost strike that. Has 215GetACab lost drivers based on regulatory issues with the Philadelphia Parking Authority? A Yes, on a daily basis. THE COURT: You say yes or no. THE WITNESS: Yes. THE COURT: Next question. BY MR. BERMAN: A significant number of drivers? A I have personally turned in approximately 50 to 60 medallions back into Philadelphia Parking Authority, and they?re currently still there because we do not have drivers to operate those medallions. You were here for Mr. Abitbol's testimony, correct? A Yes. And did you hear you heard Mr. Abitbol?s testimony with respect to significant decreases in revenue for both drivers and medallion owners, correct? A Yes. And you agree with the testimony Mr. Abitbol put forth? A Absolutely. Our revenues are down 30 to 40 percent in both types of operation, either medallion leasing or operating medallion with the vehicles. Have you lost has 215GetACab lost a significant number of drivers to Uber? Case Document 58-1 Filed 10/14/16 Page 22 of 129 Abitbol - Recross (DOR) 209 A Yes. Can you describe the current state of your business? A The current state of the business is really, really bad. Because I am a CPA, so I made a certain estimate, and in either type of the operation, the average medallion right now produces 4 to 500 dollars of net income. For now, so out of that 4 to 500 dollars, we have to pay to the bank, and we also have to pay medallions fees which are due very soon to Philadelphia Parking Authority. Each individual owner has no ability right now to pay those medallion fees. We still have to work for another four months and do not make any payments to the banks before we can even start paying to Philadelphia Parking Authority. The state is such that, you know, the money does not grow on the trees. If there is no money coming in, expenses are the same, we have simply no money. It is -- if there is no money, people -- what the medallion owners do, they are turning in the medallions in to the Philadelphia Parking Authority. And it is my understanding there are around 200 of them that have filed for the voluntary suspension, but I believe it?s more for people that just simply dropping them off and not, you know, filling out a voluntary suspension. Because even to file the voluntary suspension you have to pay the money, which a lot of those medallion owners don?t have. I don't know exactly the quantity, but I personally turned in at Case Document 58-1 Filed 10/14/16 Page 23 of 129 Abitbol - Recross (DOR) 210 least 60. In the event that a equal framework is not put into effect by the Parking Authority or by this Court, what would be the ultimate impacts on your business? A Well, we will have to go out of business. We already under the water. We already don?t have the ability to pay neither to the banks, nor to Philadelphia Parking Authority. And our expenses seems to be going up, and part of them are for the Philadelphia Parking Authority. rThey?re coming up with the new rules and regulation, all kind of different requirements all the time. It's all takes manpower. Don't forget, nobody ever talks, we have a lot of office expenses and we have expenses going up, and if nothing happens, we?ll just have to close the business. MR. BERMAN: No further questions. THE COURT: All right. Cross?examine. CROSS-EXAMINATION BY MR. DORAN: Good afternoon, Ms. Friedman. Ms. Friedman, is Mr. Sterran (phonetic) the president of 215GetACab? A No. No? A Which Mr. Sterran? Sorry. Which Mr. Sterran? Mr. Gene Sterran? A No. Oh, yes, yes. Probably yes. I don?t know who?s the Case Document 58-1 Filed 10/14/16 Page 24 of 129 Exhibit Case Document 58-1 Filed 10/14/16 Page 25 of 129 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CHECKER CAB PHILADELPHIA, INC., . CIVIL ACTION et al., . Plaintiff, v. . No. THE PHILADELPHIA PARKING . EVIDENTIARY HEARING AUTHORITY, et al., SEPTEMBER 29, 2016 Defendants. Philadelphia, BEFORE THE HONORABLE MICHAEL M. BAYLSON UNITED STATES DISTRICT JUDGE APPEARANCES: For the Plaintiff: BRETT A. BERMAN, ESQ. SAMUEL S. DALKE, ESQ. Fox LLP 2000 Market Street, 20th Floor Philadelphia, PA 19103-3222 For the Defendant: PATRICK J. DORAN, ESQ. GARY D. FRY, ESQ. Archer Greiner, P.C. One Liberty Place, 32nd Floor 1650 Market Street Philadelphia, PA 19103 DENNIS G. WELDON, JR., ESQ. The Philadelphia Parking Authority 3101 Market Street, 2nd Floor Philadelphia, PA 19104-2806 Audio Operator: KERRI AIKEN Transcriber: DIANA DOMAN TRANSCRIBING P. O. Box 129 Gibbsboro, NJ 08026-0129 Telephone: (856) 435-7172 Fax: (856) 435-7124 Proceedings recorded by electronic sound recording; transcript produced by transcription service. Case Document 58-1 Filed 10/14/16 Page 26 of 129 2 I Witnesses Direct gross Redirect Recross FOR THE PLAINTIFF: Corinne O'Connor FOR THE DEFENSE: William Schmid Dennis Weldon By the Court 75 Vincent Fenerty EXHIBITS: Marked Admitted Article from phillymag.com dated 10/28/14 85 Testimony of Mr. Fenerty to PA House of Representatives on 6/11/15 87 Memorandum of TLD dated 10/15 (P-8) 126 Case Document 58-1 Filed 10/14/16 Page 27 of 129 Schmid Direct 33 of problems. THE COURT: Through June of this year. THE WITNESS: Yes, sir. THE COURT: June ?16. THE WITNESS: I think it was like June, yes. I don?t know the exact date. THE COURT: How many do you know how many cars you impounded? THE WITNESS: Exactly one hundred cars. THE COURT: So that?s from October -- THE WITNESS: For illegal service provider. THE COURT: That?s about twenty months. THE WITNESS: Correct. Also, issued citations, I think somewhere close to 300 citations, and that would be to Uber and for, to the driver for doing it, for illegal service provider, and to them for aiding and abetting the illegal operation of an illegal service provider. So we THE COURT: And what happens when a car is impounded? THE WITNESS: It goes to Lot 1, and there's way for them, you know, through regulation, to get the car out. THE COURT: How much does it cost? THE WITNESS: They all put a collateral up. A thousand dollars, Judge. THE COURT: A thousand dollars to get it released? Case Document 58-1 Filed 10/14/16 Page 28 of 129 Schmid - Direct 38 PPA out there let us know right away. I?ve had Uber people show up when we were impounding cars that fast and the phones are burned, you can't ever use them again. Did you reach out to the taxi industry to assist in those efforts? A I did. Can you describe that for the court? A Well I asked many people if they would, you know, people were concerned about them being in it with it affecting their business obviously, affecting their business. And I went to the taxi industry and many members of the taxi industry and limousine industry. I had folks in the limousine industry helping me at one point. And people could complain about Uber and being out there. And the standard line, in fact, my deputy manager I spoke of earlier is out in the garage all day long, what are you going to do about Uber and Lyft? Let me borrow your phone and a credit card and we'll impound one. Well THE COURT: Let me mask you about D-6. This is the Complaint that -- THE WITNESS: Which number, sir? THE COURT: D-6 that you mentioned awhile ago. This is the Complaint that your division filed against Uber. THE WITNESS: Yes, sir. THE COURT: All right. This shows in the upper Case Document 58-1 Filed 10/14/16 Page 29 of 129 Schmid - Direct 39 right-hand corner a filing date of August 28, 2015. Is that correct? THE I?m sorry, Judge, what line? THE COURT: You see in the upper right-hand corner? Is that the filing date? THE WITNESS: Yes. THE COURT: Is that right, Mr. MR. DORAN: Yes, Your Honor, that?s my understanding. THE COURT: Well if they started it on October 2014, what took eleven, basically ten months to file this Complaint? THE WITNESS: I was trying to impound them as often as I could. This was filed on the 28th. It probably took us a month to get it all together. THE COURT: Well wait a minute. Now you first noticed the problem in October 2014, right? THE WITNESS: Yes. THE COURT: And you started immediately with the impoundment and the citation. THE WITNESS: Yes. THE COURT: Why did you wait ten months to file a Complaint, is my question. THE WITNESS: Judge, I never, I thought we were going to be able to stop them. It became clear that we couldn?t and I went to this. THE COURT: All right. Go ahead. Next question. Case Document 58-1 Filed 10/14/16 Page 30 of 129 Schmid Direct 40 When was the Complaint filed, if you know? That?s D-7. That was not filed until 2016. THE WITNESS: I don?t have that date, Judge. THE COURT: Do you have that, Mr. Fry? MR. DORAN: Well it?s a 2016 document number so I believe that?s correct, Your Honor. THE COURT: You know when? Verification is MR. DORAN: January 8th. THE COURT: January 8th. Okay, go ahead. BY MR. DORAN: Mr. Schmid, does the Complaint detail all the enforcement that began in October of ?14, the Uber Complaint? If you look at paragraph 14? A Yes. THE COURT: Has anything happened with these two Complaints? THE WITNESS: They haven?t been heard yet. THE COURT: Any reason for that? THE WITNESS: My trial counsel is working with that. THE COURT: All right. Go ahead. BY MR. DORAN: Ms. Schmid, does the Parking Authority impound any vehicle, whether it be a taxicab, limousine or any other vehicle, pirate cab, TNC, if there?s a passenger in the vehicle? Case Document 58-1 Filed 10/14/16 Page 31 of 129 Schmid - Direct 41 A Impound the vehicle when there?s a passenger in the vehicle? Yes. A We have. Okay. Are there difficulties you heard a lot of testimony yesterday about people observing Uber and cars operating in the public. Are there difficulties with enforcement other than by using and setting up a fake account, or an account to call a vehicle, is it simple to enforce just visually against Uber and Lyft? A Well it?s not because of their plain car. It could be my car, it could be your car. So you have so compounding these problems that I spoke of, there came a time when they became legal and their experimental license in 66 counties in the Commonwealth and only illegal in Philadelphia. 80 now, you know, I?m going, we spoke about Judge Yellin a little while ago, I"m going to be going in front of Judge Yellin with cases. I have to get this very right. So I need to be on both sides of this trip. THE COURT: Well they said, yesterday there was testimony that he was a mediator; is that correct? THE WITNESS: He's the hearing officer, Judge. THE COURT: For the Parking Authority? THE WITNESS: Yes, sir. THE COURT: So he would hear these cases on D-6 and Case Document 58-1 Filed 10/14/16 Page 32 of 129 Schmid - Direct 42 THE WITNESS: He?s scheduled to hear these, yes. THE COURT: Is there a date for the hearing? THE WITNESS: That I don't know, Judge. THE COURT: All right. Go ahead. BY MR. DORAN: Mr. Schmid, when did the PUC make TNCs, or certain TNCs lawful in every other county of the Commonwealth? It was early on. I don't have the date. Okay. If you could turn to Tab 24, Okay. I have it. Do you know what is? (D C) 5 It?s the Opinion and Order issued by the PUC in regards to Rasier's application, which is the company in that Uber operates through. A Okay. And is it your understanding, without digging into this, this is the PUC Order which granted the experimental authority? A That?s my understanding. November the 13, 2014. That was a month or two after Uber and started operating in Philadelphia illegally. A That?s actually one month. One month. Now it's important for you to explain to the court why the fact that Uber and became legal and authorized experimentally by the PUC say in Montgomery County Case Document 58-1 Filed 10/14/16 Page 33 of 129 Weldon - Cross 56 mean by that? Your personal position. Isn't it true that it has changed over time as to whether Uber and are providing taxicab or limo services in the city of Philadelphia? THE COURT: Well that's different than the first question you asked. The first question you asked is whether they?re illegal. MR. BERMAN: I?ll stay with my second question. THE COURT: Well first of all, I wish you would divide it up, first Uber and then either taxicab or limo; there?s different regulations. MR. BERMAN: Okay. BY MR. BERMAN: Isn?t it true, Mr. Weldon, that your position has changed as to whether Uber and are providing illegal taxi services in the city of Philadelphia? A No, I don't believe it has. Isn?t it true, Mr. Weldon, that you spoke with WHYY media on July 8, 2014? A I may have, I don't know. MR. BERMAN: Your Honor, can I play a clip please, a short clip? THE COURT: Sure. (Audio recording was played commencing at 10:39 a.m. and concluding at 10:40 Case Document 58-1 Filed 10/14/16 Page 34 of 129 Weldon - Cross 57 BY MR. BERMAN: So as I asked you before, was it not your position at an earlier point in time that Uber and were providing taxicab service in the city of Philadelphia? A Taxicab, illegal taxicab and limousine service, which I did say in that clip you just played. Okay. So your position did not change over time. It is either, it was a taxicab service or it was not. A They were providing illegal and I testified to this on direct -- they were providing illegal call or demand service. That's the legal term for it. Taxicabs can provide call or demand service. Demand means you can put your hand up in the air and hail a taxicab on the street and pay cash. But in a taxicab you can also call the cab ahead of time. Now with a limousine you can only call the vehicle ahead of time. So depending on the way the context of the ride, certainly an Uber vehicle could have gone, and even more illegal I guess, and responded to a hail, right? A hail would technically be illegal taxicabs. There?s no distinction for purposes of the way the Parking Authority has reviewed this, for the way we?ve briefed it in courts. It is a violation of the Parking Authority regulates common carrier car demand service in Philadelphia, whether that?s limousines or taxicabs. We regulate all of them. When these companies, TNCs, came into Philadelphia, they violated those restrictions. Most of the Case Document 58-1 Filed 10/14/16 Page 35 of 129 Weldon - Cross 58 time I believe they more violated limousine standards because they don?t try to accept street hails. But that doesn?t mean they've never accepted a street hail neither. One way or the other they needed a license, in the Authority's View, to provide the service they were providing, or a CPC, and they didn't have it and they were illegal. And in fact, Mr. Weldon, when Uber first began business in the city, you were involved in requiring them to obtain a limousine certificate, correct? A Now I think I testified yesterday that the first presence of Uber in Philadelphia was Uber Black. And those vehicles were impounded. They then eventually said, how do we stop our vehicles from getting impounded. They came in for a meeting, I was at the meeting, there were a lot of people at the meeting. And I believe at that meeting someone communicated to them that what they needed to do if they wanted to be a legal limousine service was to acquire a limousine Certificate of Public Convenience, which they went and did. They applied for it, they paid for it, and I believe they're still currently a limousine service in Philadelphia. THE COURT: And that's still valid, right? THE WITNESS: Yes, sir. BY MR. BERMAN: Describe the differences in service between Uber Black, and UberX. Case Document 58-1 Filed 10/14/16 Page 36 of 129 Weldon - Cross 78 Complaint was not filed until January 2016. What knowledge do you personally have as to why it took so long for the Parking Authority to file these? A I don't, I think -- If any. If you don't know, say you don?t' know. A I don?t know exactly, Your Honor. All right, fine. Okay, all right, thank you. MR. BERMAN: Should I continue? THE COURT: Do you have any other questions? MR. BERMAN: I do along what Your Honor was just asking. THE COURT: Go ahead. BY MR. BERMAN: Mr. Weldon, have you seen D-6 and D-7 before today? A Yes. You were, in fact, involved in the process that led to the filing of those, correct? A I know that there were discussions related to it and I was a party to them. How much I was and, you know, I don?t really remember. Okay. And these are filings that were done only at the PPA administrative level, correct? A Yes The Parking Authority, in fact, filed nothing seeking this type of relief in the courts, of either federal court or state Case Document 58-1 Filed 10/14/16 Page 37 of 129 Weldon Cross 79 court, seeking this type of relief, correct? A No we didn't. I didn?t think that would be an appropriate thing to do. Yet it was an appropriate thing to do at a PPA THE COURT: Well wait a minute. I don't want him to have to testify about something that is privileged or work product. So MR. BERMAN: Well if I may add though, Your Honor, just so we?re clear on Mr. Weldon's role here. THE COURT: Yeah. MR. BERMAN: Mr. Weldon does not THE COURT: Well he said he was not in the direct line of authority of deciding to file this, so I would rather wait for Mr. Fenerty to answer those questions. MR. BERMAN: Okay. Well the issue just for clarity here, and Mr. Weldon testified to it yesterday, Mr. Weldon is much more than the general counsel to the Philadelphia Parking Authority. He actually also is an executive director of the Authority and he makes, he was the one who negotiated the Uber deal and had all authority to do it. This is well beyond the general counsel role in the traditional sense that you and I are familiar with. So that?s why I want to be clear when I?m asking the questions, I?m not looking, nor am I looking to invade on attorney?client privilege but it?s well beyond that for this witness. Case Document 58-1 Filed 10/14/16 Page 38 of 129 Fenerty Cross 87 Their services were illegal. They were providing hack taxi services. They are one in the same, sir. E) E) Mr. Fenerty, isn't it true that on June 11, 2015 you testified before the Consumer Affairs Committee of the House of Representatives? A I did, sir. MR. BERMAN: I?m going to mark this, Your Honor. May I approach, Your Honor? THE COURT: Yes. BY MR. BERMAN: Mr. Fenerty, I placed before you a copy of your testimony before the House of Representatives that you gave on June 11, 2015. Isn?t it true that you represented to the House of Representatives that the services being provided by TNCs was indistinguishable from the services being provided by taxis and limos. I did. Do you disagree with that statement now? Yes. Because of Act 85 changing it? Yes. Any other reason? Yes. (D (3 K) (3 Why? Case Document 58-1 Filed 10/14/16 Page 39 of 129 Fenerty Cross 89 is required to avoid further harm to the Philadelphia taxi industry? A Yes. And there is not such isn't it true that there is not a level regulatory playing field in the city of Philadelphia, and thus there has been harm to the Philadelphia taxi industry. THE COURT: Well that?s two separate questions. MR. BERMAN: I?ll rephrase, Your Honor. BY MR. BERMAN: Isn?t it true that as of today there is not a level regulatory playing field in the city of Philadelphia. A Yes. Mr. Berman, I would like you to speak to me with more respect and not scream at me, please. I am not being loud with you. There?s no reason for you to continually scream at me. You?ve done it in depositions. I ask for respect. THE COURT: He?s not screaming. He?s just speaking in a loud voice and you?re speaking very softly. MR. BERMAN: And I will try to speak more quietly, but this is cross?examination and I don?t think I?m speaking with you with any level of disrespect. THE WITNESS: I?m not hostile, sir. THE COURT: Okay. Just re-ask the question. BY MR. BERMAN: Isn?t it true, Mr. Fenerty, that as a result of not having a level regulatory playing field in the city of Philadelphia Case Document 58-1 Filed 10/14/16 Page 40 of 129 Fenerty Cross 90 taxis have been significantly harmed. A There are two reasons that that has happened. But that is one of the major reasons; correct, Mr. Fenerty? A Yes. And the other is the taxi industry has failed to invest in itself, okay, to bring the cabs to a better height of service and to modernize their own equipment to compete in a level playing field. Mr. Fenerty, isn't it true that since October 2014 the Philadelphia Parking Authority has not relaxed a single regulation on the Philadelphia taxi industry. A It is, sir. And isn't it true that the Parking Authority specifically dictates which meter technology taxes are required in the city of Philadelphia to have. A Yes, sir. And isn't it true that the meter systems that are required to be installed in Philadelphia taxis use old technology? A I am not qualified to answer that question. Isn?t it true, Mr. Fenerty, that as late as May of 2016 the Philadelphia Parking Authority was taking the position to the courts of that Uber and were providing illegal taxi services in the city of Philadelphia? A Yes, I believe so. Do you have a document that I may examine to prove that? Case Document 58-1 Filed 10/14/16 Page 41 of 129 Fenerty - Cross 97 A Yes. Mr. what is not created by So now describe to me, Fenerty, regulation or statute that makes these entities different. A Their business models. So with that being said, Mr. Fenerty, how many Uber or vehicles operate in the city of Philadelphia today? A I have no knowledge of that. As the Executive Director of the Philadelphia -- or former Executive Director of the Philadelphia Parking Authority since October of 2014 to the present, you never received any knowledge on how many Uber vehicles are operating in the city of Philadelphia? A Uber has never turned that report over to the Parking Authority or has not been required to turn that over to the Parking Authority. THE COURT: Well I understand that, but in part of your role have you ever received information about how many cars THE WITNESS: Uber has claimed that they had over 10,000 cars full or part time. THE COURT: Over 10,000. Has made any claims, to your knowledge? I believe, under a thousand. THE WITNESS: They said, THE COURT: Under half? THE WITNESS: Under a thousand. Case Document 58-1 Filed 10/14/16 Page 42 of 129 Fenerty - Cross 102 A I know they have dropped. I do not know exactly how many. Isn?t it true that if there are 200 to 300,000 less taxi rides on a basis, that the revenue then goes down? A If there's one less taxi ride, the revenue goes down. If there?s 200,000 less, the revenue goes down. But I?m still not aware of the ridership decrease and what it is. Are you aware, Mr. Fenerty, of whether taxi drivers in the city of Philadelphia have left taxis to drive with Uber and Lyft? A I'm sure they have, some have. Is it your understanding that any of those taxi drivers has left as a result of actions by the Philadelphia Parking Authority? A I?m not aware of any of that. What is the purpose of the annual TLD assessments that are issued to taxi drivers and dispatchers. A To fund the TLD. Isn?t it true, Mr. Fenerty, that assessments have been raised on taxi medallion owners and dispatchers every year since 2015? A Yes. Has the PPA ever received any assessment monies from Uber or other A No. Yet over the last two years the assessment monies from Case Document 58-1 Filed 10/14/16 Page 43 of 129 Fenerty Cross 103 taxi and limousine assessments have been used to fight A In part. And isn?t it true that the PPA spent substantial resources of taxi and limo owners monies to engage in those efforts? A Yes, at the request of the taxi medallion owners it?s our job to do that. Taxi medallion owners who are sitting in this room today never stop requesting it. We enforce, enforce, enforce, enforce and impound the TNCs. We did our job, okay? So Mr. Berman, okay, they were the funds that were available, okay? It doesn?t say anywhere we can?t fight hack cabs, and at that point they were hack cabs; they were not legal. So don't try to feed words into the Parking Authority that we were using someone else?s money. We were using the money, okayput the illegal TNCs out of business. I'm glad you find my testimony funny because I find my testimony serious. MR. BERMAN: Your Honor, I would ask that you instruct the witness to just answer my questions. THE COURT: All right. I think he answered. Re-ask it. BY MR. BERMAN: If you turn to P-6 and P-7, Mr. Fenerty, are you aware that the Philadelphia Parking Authority filed an administrative action against Uber in August of 2015? A Could you please describe what that action was so I could Case Document 58-1 Filed 10/14/16 Page 44 of 129 Fenerty - Cross 106 BY MR. BERMAN: So it?s your testimony that the Philadelphia Parking Authority could not go to court to try to stop these actions? A I am not law trained. I am not qualified to answer that question. Did you ever seek approval from the board of directors of the Philadelphia Parking Authority to take any such actions? A No. Did you ever take any action as the Executive Director of the Philadelphia Parking Authority to relax or modify any regulations imposed upon Philadelphia taxicabs since October of 2014? A No. Did you ever ask the board of directors of the Philadelphia Parking Authority to relax or modify any of the regulations on Philadelphia taxicabs since October of 2014? A No. Mr. Fenerty, isn?t it true that you were involved in the meetings that led to legislation being submitted jointly to Harrisburg with Uber, and they city of Philadelphia? A I was. And isn?t it true that the Parking Authority understood that they would be receiving 2.5 to $5 million as a result of that jointly submitted legislation? A We were hopeful that the legislation which was suggested Case Document 58-1 Filed 10/14/16 Page 45 of 129 Fenerty Cross 107 to the House Consumer Affairs Committee would go through. We were hopeful. We made suggestions, bonafide suggestions on what we wanted. We didn?t know how it would go. We had hoped it would go well and it would be good for the city of Philadelphia. Isn?t it true, Mr. Fenerty, that the drafting of that proposed legislation was led by Mr. Weldon? A That's correct. Isn't it true that the Parking Authority worked directly with legislators in Harrisburg to seek certain legislation to be imposed on A Yes, it is. Isn?t it true that the Parking Authority did not work with legislators in Harrisburg to relax legislation, regulation on taxis? A That?s correct. Isn?t it true that the Parking Authority did not advise anyone in the taxi community that those meetings were occurring with Uber, and the city of Philadelphia? A That?s correct. Isn't it true that the Parking Authority sought no input on the proposed legislation being submitted jointly by Uber, and the city of Philadelphia from members of the taxi industry? A That?s correct. Case Document 58-1 Filed 10/14/16 Page 46 of 129 Fenerty - Cross 108 And isn't it true that the legislation that was submitted jointly with Uber, and the city of Philadelphia contained no modifications of the regulations that are imposed on the taxicab community in the city of Philadelphia. A That is correct. The taxi medallion industry had its own lobbyists working on their desires. And the Parking Authority did not engage with the taxi community in any way to seek their feedback on that legislation that was jointly submitted. A We did not. The Parking Authority worked hard to try to get regulations for the TNCs. We worked hard to get proper regulations for the TNCs so they could be inspected so we knew we would have good TNCs on the street and there would be no fatalities. Our job is safety and making sure that everyone is safe. That?s what we worked hard at, in getting regulations to make everyone safe. How many taxicab medallions are on the road in the City of Philadelphia? A There are about 1,650 authorized medallions. I don?t have the exact number in front of me. And you?re aware, Mr. Fenerty, that there have been a number of medallions that have been turned over to the Philadelphia Parking Authority, correct?? A Turned over to be placed on the shelf, correct? To be placed on the shelf. Case Document 58-1 Filed 10/14/16 Page 47 of 129 Fenerty - Cross 109 A Yes. And do you know if that is because the medallion owners are in a state of financial distress? A I?m not aware of that. No one ever reported that to me, but I know that there are medallions on the shelf. Do you know how many medallions are on the shelf? A I don?t. Isn't it true that the joint legislation that was submitted by the Parking Authority, Uber and did not require partitions in vehicles? A That's correct. Isn?t it true that that legislation didn?t require a specific meter technology? A That?s correct. Isn?t it true that that proposed joint submittal did not require the same level of assessments per medallion as would be imposed on A I didn?t quite understand that question, sir. Isn?t it true that the Parking Authority was agreeing to legislation to be submitted to Harrisburg that would require TNCs to pay a much lower per vehicle assessment than taxis? A The amount that was going to be paid was a set amount. If you put one next to the other and analyze it, I?m not sure. Isn?t it true that the legislation that was agreed upon would not require safety cameras in TNC vehicles? Case Document 58-1 Filed 10/14/16 Page 48 of 129 Fenerty Cross 110 A That?s correct. Isn?t it true that the legislation that was jointly submitted to Harrisburg did not require numbering like taxis were required to undertake? A That?s correct. Isn't it true that the joint legislation that was submitted to Harrisburg did not require coloring or markings in the way that taxis had to have? A I believe there was an amendment filed from someone else that TNCs were going to have to have some type of identification on them. Isn?t it true, Mr. Fenerty, that at some point in time the Parking Authority reached a deal with Uber, prior to Act 85? A You turned away so long I forgot what the question was. I said isn't it true that prior to Act 85 the Parking Authority reached a deal with Uber. A Yes. Isn?t it true that you were involved in those negotiations. A Yes. Isn't it true that that agreement was confidential. A Yes. And isn?t it true as part of that agreement, prior to Act 85, the Parking Authority agreed to cease all enforcement activity against Uber in the city of Philadelphia. Case Document 58-1 Filed 10/14/16 Page 49 of 129 Fenerty - Cross 111 A Yes. And isn't it true that the Parking Authority also ceased all enforcement activity against as a result of that agreement. A Yes. And isn?t it true, Mr. Fenerty, that since the entry of the agreement with Uber there has been no enforcement activity against Uber and in the city of Philadelphia. A That?s not correct. Describe any enforcement activity. A You said since the agreement. The agreement was superceded by the law from Harrisburg, sir. When the statute was passed, I believe it?s Act 85, was passed, that would have invalidated any agreement and superceded it according to law. It was only a matter of days later. If you turn to D-8 of defendant?s exhibits, is that a copy of, a full copy of the Settlement Agreement and Mutual Release that was executed by you with Uber? A It is. And if you turn to well if we start with the payment -- MR. DORAN: Your Honor, I?m waiting for a question. I?m likely to object when the question is done. THE COURT: Go ahead. Ask the question. BY MR. BERMAN: Isn't it true that the Parking Authority agreed to a Case Document 58-1 Filed 10/14/16 Page 50 of 129 Schmid - Cross 127 MR. BERMAN: Your Honor, can I approach? THE COURT: Yes. THE WITNESS: Thank you. So this is the document you showed me two days ago in a deposition. BY MR. BERMAN: And you, in fact, participated in October of 2015 in writing a memo with the then director of the Taxicab and Limousine Division, James Ney, correct? A I participated in this, yes. And in that memo you asked that comments be provided describing safety and mechanical and other issues with respect to Uber and vehicles in the city of Philadelphia, correct? A I made these comments, yes. And you talked about minor things, I guess minor, like urine in the car, broken Windshields, dirty diapers, expired inspection stickers, expired DMV registration, bad brakes, bad tires, misaligned auto body parts, and outlandishly dressed drivers. Sexual assaults have been reported to the police including one instance where an driver followed a Temple student into her dorm room. A I wrote that. So when you testified about all of those issues with the 1,600 medallions, or the selected ones that you provided to the court, you actually believe that Uber and vehicles have many issues on the cars they?re putting on the roads in the Case Document 58-1 Filed 10/14/16 Page 51 of 129 Schmid Cross 130 Philadelphia to taxi medallions? A I told you that we write about a hundred a month. So a hundred a month to taxis operating 1,600 vehicles, yet 300 in 22 months to Uber and Lyft. A 80, Judge, that?s not exactly right. It?s limousines and taxis, by the way. THE COURT: Okay, all right. That's his testimony. BY MR. BERMAN: So can you break down, out of the hundred you say you issue a month, how many go to limos versus how many go to taxis? A Yeah, about 80/20. Okay. So 80 a month to taxis, so in four months you?re issued more tickets to medallion vehicles in the city of Philadelphia than you have in 22 months to Uber and Lyft. A That?s correct. And you?ve also received in those 22 months hundreds of thousands, if not more than a million dollars as a result of those violations on taxis? A I don?t know what?s been collected. Yet you participated in an agreement with Uber that allowed for, on those same 22 months, around $300,000 to be paid for all of the violations for up to 15,000 cars. A I didn't call for that number. But you fought in e-mails, Mr. Schmid, to make sure it was Case Document 58-1 Filed 10/14/16 Page 52 of 129 Schmid - Cross 138 A Yes. And you have the ability to stop a certain driver from even getting logged into a portal and starting a trip, correct? A Yes, we can do that. Do you have any of that ability with respect to Uber or Lyft? A No. Is there a complaint line that's been set up in the city of Philadelphia with respect to Uber trips? A We have one complaint line for all trips. Since July of 2016 isn?t it true that the Parking Authority has not issued a single violation to Uber and Lyft? A Wrong. Today you did? A Yesterday. Yesterday. Prior to yesterday, isn't it true that the Parking Authority has not issued a single violation to Uber and Lyft? A Correct. Isn?t it true that since July you?ve issued hundreds of violations to taxis and limousines. A I don't know about hundreds. Well in excess of a hundred versus the one you issued for Uber Lyft? A I don?t know the number. It?s more than what I?ve given Case Document 58-1 Filed 10/14/16 Page 53 of 129 Schmid Recross 140 amounts in the Uber Settlement Agreement. A Yes. Does the Enforcement Department under your direction routinely compromise fines and citations issued to taxicabs? A Through the trial counsel, yes. And sometimes agreements are made to pay less than the citation amount. A Often. MR. DORAN: No further questions, Your Honor. MR. BERMAN: One question. RECROSS-EXAMINATION BY MR. BERMAN: Under that Settlement Agreement that you just referred to, you were aware that the Parking Authority was prohibited from engaging in any enforcement activity against Uber and Lyft, correct? MR. DORAN: That's beyond the scope of the re MR. BERMAN: No, he asked about the Agreement. THE COURT: No, I?m going to allow it. Go ahead. THE WITNESS: I?m sorry. What was the question? BY MR. BERMAN: In that Settlement Agreement that Mr. Doran just referenced you?re aware that the Parking Authority agreed to stop all enforcement activity against Uber in the city of Philadelphia, correct? Case Document 58-1 Filed 10/14/16 Page 54 of 129 Schmid - Recross 141 A Yes. And as part of that term the Parking Authority also agreed, either explicitly or implicitly, to stop all enforcement activity against as well, correct? A Yes. Now does that mean also that you agree THE COURT: Well now this is recross. You're, you know, -- MR. BERMAN: Okay. Nothing further then, Your Honor. THE COURT: All right. Thank you. All right. Does defendant have any more witnesses? MR. DORAN: Just Ms. O?Connor, Your Honor, Corrine O'Connor. THE COURT: Well did you talk about any offer of proof? MR. DORAN: We didn't have a chance to do that, but in light of the discussion, Your Honor, I think it would be easier just to present the testimony. THE COURT: All right. Well I?m going to let you lead her and finish this quickly. MR. DORAN: Okay. Very good, Your Honor. THE COURT: Because I think you ought to have a chance to make it on the record, but I don?t think there's much controversy about it. I R, DEFENSE WITNESS, SWORN Case Document 58-1 Filed 10/14/16 Page 55 of 129 O'Connor - Direct 142 THE CLERK: Please state your full name and spell your last name for the record. THE WITNESS: Corrine O'Connor, THE CLERK: Thank you. You may be seated. THE COURT: I?ll tell you what we're going to do. You make the offer of proof and you can ask her if that?s correct, if she would give that testimony. DIRECT EXAMINATION BY MR. DORAN: Ms. O?Connor, my understanding is that if we were to conduct a back and forth colloquy, you would testify that you are the Deputy Executive Director of the Philadelphia Parking Authority, you're responsible for the TLD. In that capacity you have responsibility for TLD's budgetary process; that true and correct copies of budgets from the inception of TLD's operations at the Parking Authority through the current fiscal year are marked as through that you prepare those budgets by calculating the amount of expense it will take for TLD to do the job it is tasked to do by the legislature and the regulations; that you calculate that number and then complete the budget by determining what revenue sources will be available to satisfy those expenses, and that one of the, if not the significant revenue item are annual assessments on the regulated industries' taxicabs and limousines in the current example; that you do not consider the fairness of the Case Document 58-1 Filed 10/14/16 Page 56 of 129 O?Connor - Cross 143 assessment, the ability of operators to pay the assessments. You're simply calculating revenues that are available to meet the expenses for the TLD to do the job that it?s required to do. My understanding is you?d further testify that there have been revenue shortfalls in recent years associated with changes in the medallion industry which have caused TLD to have to reduce costs, including transferring people out of and finally, that if the fiscal year 2017 assessments that have been levied by the Authority on taxi medallions are not paid or if no further assessments are collected beyond those that have Ibeen collected today, there are approximately two months of operating expenses available to fund TLD operations. Would you testify to those items? A Yes. THE COURT: All right. Do you have any cross? MR. BERMAN: Okay. Cross on those points? Is that what it is? THE COURT: Yes. Do you? MR. BERMAN: Did you say cross on what he just offered? THE COURTL Yes. Not through testimony. MR. BERMAN: Okay. Briefly. BY MR. BERMAN: Case Document 58-1 Filed 10/14/16 Page 57 of 129 O'Connor Cross 145 industry about problems that the taxi industry faced? A Yes. You personally have had that discussion with anyone in the taxi industry? A Yes, I?ve been at plenty of taxi meetings where they came to 701 Market Street and I sat at the table with Joey Gabay (phonetic), his sister Michele, and met other members of Ron Blount (phonetic). I mean I could go through plenty of names that I?ve been to plenty of meetings where I was at the table. So you just described Mr. Gabay from Germantown, a non- medallion holder, right? A Correct. And Mr. Blount who is a driver representative, right? A I mean do you want a list of 20 names? Is that what we?re going to go through here? THE COURT: Well, no. She?s answered the question. What's the next question? BY MR. BERMAN: Would you be surprised that no one in the taxi industry remembers a single discussion with you in any of those years? THE COURT: All right, that?s irrelevant. It's not irrelevant, it?s improper. Next question. BY MR. BERMAN: Did you, as part of your budget analysis, take into account the revenue losses of the taxi industry for the current Case Document 58-1 Filed 10/14/16 Page 58 of 129 O?Connor Cross 146 fiscal year? A No. Did you take into account the fact that the ridership was down, in creating the current fiscal year budget? A No. Did you take into account the financial situation -- THE COURT: Well she testified what she took into account. That assumes you didn't take anything else into account, right? THE WITNESS: No. What I take into account is that my expenses have to equal the revenue that we bring into the Taxi and Limousine Division. THE COURT: So once you calculate the expenses, then you determine what revenue you made. THE WITNESS: Correct. THE COURT: All right. Okay? BY MR. BERMAN: Was there any consideration given of whether or not, of what would happen if the taxi industry members did not have the money to pay? A No. We are regulated that we have to enforce the regulations, so our job by the State is go to out there and be a, out in the public enforcing regulations, inspecting the vehicles, having an employee work the window. If I do not have that revenue stream coming in, I can not pay employees, I can Case Document 58-1 Filed 10/14/16 Page 59 of 129 Colloquy 153 can exercise jurisdiction to rule on these things when the taxicab drivers have not previously exhausted their state court remedies and whether I should therefore abstain from ruling until they do that. That?s a question. I don?t have any opinion about that at the moment. A third issue is the issue of irreparable harm. And on that my inclination is that the plaintiffs have shown irreparable harm because they can?t get any, they've lost money. But it?s not my function in this case to protect them against competition. That?s not part of this case. What they've asked me to do is to protect them against unconstitutional behavior by the PPA, which is different. And they can?t get damages from the PPA. But they can get injunctive relief. Now the PPA says, well they can get it by going through us administratively, and then you have to go through the Commonwealth Court. This is a federal court; this is not a constitutional issue, and therefore they don?t have any right to relief in this court. And that?s a question that goes to the merits and the likelihood of success on the merits. But I do think that on the issue of irreparable harm, that the plaintiffs, I?m inclined to think that they have show that because they don't have any right of damages against PPA. But they do allege that PPA's conduct has violated their constitutional rights. Case Document 58-1 Filed 10/14/16 Page 60 of 129 Exhibit Case Document 58-1 Filed 10/14/16 Page 61 of 129 CHECKER CAB PHILADELPHIA, et al., Plaintiffs, vs. THE PHILADELPHIA PARKING AUTHORITY, et a1. Defendants. APPEARANCES: VFor the Plaintiffs: For the Defendants: UNITED STATES DISTRICT COURT EASTERN DISTRICT OF INC., 16-CV-04669-MMB Philadelphia, PA October 4, 2016 2:33 p.m. TRANSCRIPT OF EVIDENTIARY HEARING BEFORE THE HONORABLE MICHAEL M. BAYLSON UNITED STATES DISTRICT JUDGE BRETT ADAM BERMAN, ESQUIRE SAMUEL S. DALKE, ESQUIRE FOX LLP 2000 Market Street, 10th Floor Philadelphia, PA 19103 PATRICK J. DORAN, ESQUIRE GARY D. FRY, ESQUIRE ARCHER GREINER, P.C. One Liberty Place 1650 Market Street Philadelphia, PA 19103?7393 DENNIS G. WELDON, ESQUIRE THE PHILADELPHIA PARKING AUTHORITY 3101 Market Street, 2nd Floor Philadelphia, PA 19104 Case Document 58-1 Filed 10/14/16 Page 62 of 129 Audio Operator: BRIAN JOHNSON Transcribed by: DIANA DOMAN TRANSCRIBING, LLC P.O. Box 129 Gibbsboro, New Jersey 08026-0129 Office: (856) 435-7172 Fax: (856) 435-7124 Email: dianadoman?comcast.net Proceedings recorded by electronic sound recording, transcript produced by transcription service. Case Document 58-1 Filed 10/14/16 Page Colloquy 7 THE COURT: Okay. All right. Number two. All right. What about yourself, Mr. Doran? MR. DORAN: Your Honor, I agree with Your Honor?s comments regarding information such as that with respect to how much business they do. We don't believe that's relevant to the issues involved in the injunction matter. And we don?t have any intention of presenting any third?party information. THE COURT: Okay. MR. DORAN: From our perspective, we rested our case last Thursday and we don't -- pending the presentation of any additional evidence by the plaintiffs, we don?t intend to present any additional evidence. THE COURT: Okay. Fine. All right. Thank you. All right. Number two. All right. So this presents my belief that that the plaintiffs have shown to a substantial extent that the taxicabs and the TNCs in Philadelphia are similarly situated. So where do we go on that? That?s something that we can I don't intend to have argument on it right now. It?s something that you?re entitled to file a brief on. All right. Number three is something that I also would invite briefing on. That if I were to find that the plaintiffs have established the prerequisites for a preliminary injunction, what should the remedy be enjoining PPA from enforcing some of the right to taxicab regulations, Case Document 58-1 Filed 10/14/16 Page Colloquy 21 THE COURT: When the statute uses the word "call," does that encompass the use cell phone to summon a MR. DORAN: No, it says that only those possessing medallions or partial rights can provide car demand service in cities of the first class. THE COURT: Well MR. DORAN: That?s -- and that?s exactly the point, Your Honor. THE COURT: All right. Okay. Well, I?m not going to rule on that now, but I think it?s a -- it?s an important legal issue in this case. All right. MR. DORAN: Your Honor, and just just to elaborate THE COURT: Yes. MR. DORAN: I am very confident that the person sitting next to and behind me would absolutely not object to a Court any Court that determined that the Parking Authority had implied authority to regulate TNCs, I don?t think we'd be sitting here today. So that it is not something that has been ignored or -- THE COURT: Okay. MR. DORAN: -- or rejected by the Authority THE COURT: But here -- okay. Fair enough. But Case Document 58-1 Filed 10/14/16 Page Colloquy 22 here?s the issue, and one issue in this case, and that is that -- to use a metaphor I think that the legislature gave the Parking Authority a hammer to use against taxicabsthe same time you assert that the TNCs are acting illegal, and except for the three-month period that we had Act 85, which I think we all agree is over and done with and really irrelevant, you?re -- you know, it?s a slap on the wrist. And that is what the plaintiffs are I think that?s the the core of their dispute. That whatever your resources are and I agree, you know, you have you have limited resources, but, you know, you you use them as you think you see fit. You have a lot of people writing parking tickets for cars, query whether some of those people could be out, you know, doing MR. DORAN: By statute they cannot, Your Honor. THE COURT: They cannot. All right. Well, you may be right, but I don?t I?m not -- I don't claim any expertise on how you run your affairs. But at the same time that you have this very aggressive regulatory stance about taxicabs, which we heard from in the testimony last week, your -- your actions against the TNCs for acting illegally has been modest would be a mild a mild version of what the reality is. It?s been virtually compared to their operations, the the enforcement actions are virtually nonexistent. It?s a really, it?s a slap on the wrist. Case Document 58-1 Filed 10/14/16 Page Colloquy 23 MR. DORAN: Well, we do disagree with that, Your Honor. We -- THE COURT: I understand. MR. DORAN: We adamantly disagree with that. THE COURT: Well, you know, I heard, you know, Mr. Schmid, who I thought was a credible witneSs, talk about this last week, and, you know, you?re never -- you know, the TNCs are going to continue to operate because they know that the risk of any serious action against them is de minimis. It's a it?s a cost of doing business to pay these summonses that you hand out for illegal pick?ups or illegal drivers and what you consider to be illegal and but the public doesn?t seem to -- to care. So that?s -- that is another issue here that is important. Now, I want to drop down to my question 6 and 7. I recognize that there are good there are many good reasons why any vehicles that transport the public should have certain regulations. And there was testimony about your vehicle inspections, which, I think, you know, make a lot of sense. I mean, those of us who drive private vehicles, we have to have our cars inspected once a year in Okay? So it?s a good reason why taxicabs should be inspected also. Because public safety is an important issue. There's also good reason why people who want to drive other people around should have to disclose whether they Case Document 58-1 Filed 10/14/16 Page 67 of 129 Exhibit Case Document 58-1 Filed 10/14/16 Page 68 of 129 Vincent Fenerty 1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE EASTERN DISTRICT OF 3 4 CHECKER CAB CIVIL ACTION INC. ET AL., 5 Plaintiffs, 7 THE PHILADELPHIA PARKING AUTHORITY, ET AL.: NO. 8 Defendants. 9 10 - 11 Wednesday, September 21, 2016 12 13 Deposition of VINCENT FENERTY held at Fox 14 LLP, 2000 Market Street, 20th 15 Floor, Philadelphia, on the 16 above date, beginning at approximately 10:30 17 before Jane E. Kountroubis, a Registered 18 Professional Reporter and Notary PublicGolkow Technologies, Inc. . Page 1 Case Document 58-1 Filed 10/14/16 Page 69 of 129 Vincent Fenerty APPEARANCES: FOX LLP BRETT A. BERMAN, ESQ. 2000 Market Street, 20th Floor Philadelphia, PA 19103 (215) 299-2000 Counsel for Plaintiffs ARCHER GREINER, P.C. BY: PATRICK J. DORAN, ESQ. One Liberty Place, 32nd Floor Philadelphia, PA 19103 (215) 665?1540 pdoran@archerlaw.com Counsel for Defendants ALSO PRESENT: MICHELLE NIV JOSEPH GABBY EVERETT ABITBOL ALEX FRIEDMAN MARK LORE Golkow Technologies, Inc . Page 2 Case Document 58-1 Filed 10/14/16 Page 70 of 129 Vincent Fenerty mU'ldi-WNH WITNESS: Page VINCENT FENERTY By Mr. Berman 4 I I No. Description Page Fenerty-l Consumer Affairs Committee PA House of Representatives, 6/11/15 Testimony of Fenerty and Weldon 49 Fenerty?Z PPA TLD State Fiscal Year 2016?2017 Budget Narrative 7O Fenerty-3 Settlement Agreement and Mutual Release 156 Fenerty?4 Article 164 Fenerty?S E?mail string, 6/21/16 180 Fenerty?6 E?mail string, 5/6/16 185 Golkow Technologies, . Page 3 Case Document 58-1 Filed 10/14/16 Page 71 of 129 Vincent Fenerty 1 he was answering. 2 BY MR. BERMAN: 3 You can continue about what you 4 meant by "invasion of 5 A When they came here in groups 5 and just opened up without being legal. 7 Describe the impact on taxicab 8 revenue as a result of the invasion of TNCs. 9 A I don't have those stats. I 10 would believe that our taxi and limo division N- would have more on that. That would be a 12 question better suited for Ms. O?Connor or 13 Mr. Casey or Ms. Kirlin, Mr. Schmid. 14 So sitting here today as the 15 executive director of the Philadelphia Parking 35 Authority, you have no idea about revenue 17 losses caused by, in your words, invasion of 18 19 A Mr. Berman, I said that because 20 that's what I feel it was; okay? And I don't 21 see reports on exactly what the revenue impact 22 is with taxis. I have gotten reports that it 23 went down and it went down again and it went 24 down again, but I haven't reviewed those Golkow Technologies, Inc. Page 32 Case Document 58-1 Filed 10/14/16 Page 72 of 129 Vincent Fenerty 1 reports. That's what I have competent 2 managers for, and they report up to me. I 3 haven't reviewed those reports; okay? I know 4' the revenue is going down. I knew the revenue 5 was going down last year. So what amount, I 5 don't know; okay? There's cash fares, there's 7 credit fares, and there's tips. I don't know 8 what it has gone down. I came here, you asked 9 me to tell the truth, and I'm telling you the 10 truth, sir. 11 So, your words, down, down, 12 down; right? 13 A I think it went down, yes, sir. 14 Okay. Do you know if it's more 15 than 20%? 16 A I don't know for a fact and I 17 don't really believe much that I read in 18 newspapers, but I read in a newspaper article 19 that someone had said in the taxi world that 20 it was down about 40%. That was published in 21 a paper last week, but I don't have a report 22 from my group to substantiate it. And, again, 23 I don't believe what I read in newspapers for 24 the most part. Golkow Technologies, Inc. Page 33 Case Document 58-1 Filed 10/14/16 Page 73 of 129 Vincent Fenerty 1 So after June 11, 2015, but 2 before today; correct? 3 A Yes, sir. 4 Okay. Were you also aware that 5 the Philadelphia Parking Authority was making 6 court filings taking the identical position 7 that you stated on June 11, 2015? 8 A Yes, sir. 9 And that Parking Authority is 10 under your direct control? 11 A Yes. There's no need to get 12 loud, sir. 13 I'm not getting loud. Under 14 your direct control; right? 15 A Yes, sir. 15 Which means the buck stops with 17 you? 18 A Yes, sir. 19 Okay. So in 2016 in fact, 20 May of 2016 -- I'll read you the quote the 21 Parking Authority filed a pleading in the 22 Trinh V. PPA case at the Philadelphia Court of 23 Common Pleas, that said, and I quote, Uber 24 vehicle, quote, provided point?to?point taxi Golkow Technologies, Inc. Page 51 Case Document 58-1 Filed 10/14/16 Page 74 of 129 Vincent Fenerty 1 service in the City of Philadelphia and under 2 53 PA C.S.A. Section 5701 a transportation 3 service another quote hailed via the 4 UberX phone app falls within the legislative 5 definition of a telephone call and a hail and 5 thus the Uber vehicle was providing call or 7 demand taxi services. Moreover, Uber service 8 is simply a variant of a hack taxicab." 9 A Yes. 10 So the PPA was taking this position as late as May 2016; correct? 12 A Yes. 13 You were aware that the PPA was 14 taking those positions in court; correct? 15 A Yes. 16 So June of 2015 you called them 17 indistinguishable, May of 2016, nearly a full 18 year later, the Parking Authority is still 19 taking the position that they're providing 20 taxicab services, so does that help refresh 21 your recollection when your position changed 22 and they began providing distinguishable 23 services? 24 A Well, the service is Golkow Technologies, Inc. Page 52 Case Document 58-1 Filed 10/14/16 Page 75 of 129 Vincent Fenerty 1 Parking Authority has created the differences 2 that you're relying upon to call them 3 distinguishable services? 4 A No, sir. Those rules were 5 there prior to, as I've said, the invasion of 5 TNCs. 7 That wasn't my question, 8 Mr. Fenerty. My question to you was: There 9 are regulations that the Parking Authority 10 enforces; correct? 11 A Yes, sir. 12 Okay. And for each of the 13 things you identified, those differences are 14 created by regulations that the Parking 15 Authority is enforcing; correct? 16 A Yes, sir. 17 So other than the regulations 18 that the PPA is enforcing, what makes taxis 19 and TNCs distinguishable? 20 A Primarily the list that I gave 21 you. 22 But you said all of those are 23 created by regulation. So other than what's 24 created by regulation, in your understanding Golkow Technologies, Inc. Page 66 Case Document 58-1 Filed 10/14/16 Page 76 of 129 Vincent Fenerty 1 what makes taxis and TNCs different? 2 A None that I can think of at 3 this time, sir. 4 Okay. Would there be something 5 that you could review that would give you more 5 ideas than what you have sitting here today at 7 your deposition? 8 A I don't know and I would have 9 to go back and read through some things. 10 How many Uber and vehicles 11 are currently in the City of Philadelphia? 12 A I don't know. 13 Do you have any rough idea of 14 the number? 15 A I believe they have said that 16 there is at least 10,000. 17 And how many taxis are there in 18 the City of Philadelphia? 19 A There's about 1,650 taxi 20 medallions. 21 So it's 9 to 10 times the 22 amount of Uber and vehicles currently on 23 the road in Philadelphia versus taxis? 24 A If what I'm told is the truth Golkow Technologies, Inc. Page 67 Case Document 58-1 Filed 10/14/16 Page 77 of 129 Vincent Fenerty 1 company to send me something a transportation 2 company should be doing. 3 Well, you answered a different 4 question than I asked. I said if you call a 5 cab 6 A You asked me what the 7 difference was. 8 MR. DORAN: No. Listen to his 9 question. 10 BY MR. BERMAN: 11 I said if you call 215 Get A 12 Cab through their app and you call Uber 13 through their app, what's the difference. 14 A If I use both of their apps? 15 Yes. 16 A I'm ordering a cab via app. 17 There is no difference. 18 No difference, okay. Are you 19 aware of how much business 215 Get A Cab 20 received from their app? 21 A I'm not aware, no, but I know 22 Alex had told me that when he first put it up 23 a year or two he was getting some feed from' 24 it, that it had not taken off the way he had Golkow Technologies, Inc. Page 184 Case 2:16-cv-04669-MMB Document 58-1 Filed 10/14/16 Page 79 of 129 THE PHILADELPHIA PARKING AUTHORITY Financial Statements, Required Supplementary Information And Other Financial Information For the Years Ended March 31, 2014 and 2013 & Independent Auditors' Report