A hybrid taxi roams the streets of New York City in 2007. (Photo by Benjamin Kabak)

With Mayor Bloomberg’s plan to allow livery cabs to pick up cruise for passengers hitting a bump in the road, yet another of his campaign promises to improve transportation in the city may falter. Yesterday, I discussed the opposition to the plan from the well-organized yellow cab driver industry, and today, The Times sheds some more light on the rejiggered proposal. The Mayor isn’t going to let this promise die without some type of compromise.

According to Michael Grynbaum’s sources, the city is trying to develop the contours of a solution that would bar soe cab drivers from making pick-ups in Manhattan. In an effort to incentivize drivers to better serve Brooklyn, Queens and the Bronx, these cabbies would be able to purchase cut-rate medallions limited by the geography of the individual boroughs. He reports:

The city is weighing a proposal to create a class of yellow cabs that would be prohibited from picking up passengers in most of Manhattan, the taxicabs’ traditional territory, but would be able to do so in other parts of the city, according to three people familiar with the discussions.

Under the plan, which is being made final, new medallions would be issued for the restricted cabs. The medallions would be sold for a small fee, or, in one version of the plan, at no cost. Regular medallions, which bestow the right to pick up passengers on any city street, are typically sold at auction and can be worth nearly $1 million.

Officials say the revised proposal would achieve their goal of providing better regulated, more equitable taxi service to the wide section of New York City that is perpetually underserved by yellow cabs, which congregate in denser parts of Manhattan where they are more likely to find fares.

With this newest proposal, the city is, as Grynbaum put it, looking to “mollify yellow-fleet owners who feared their medallions would lose value” if livery cabs were allowed to pick up hails. This new plan may encroach upon the turf of private car companies, but the Taxi and Limousine Commission thinks it will provide lower-cost taxi transportation. “The mayor’s bottom line is quality taxi access in all five boroughs,” TLC Commissioner David Yassky said. “I am confident we’re going to get there.”

The Taxi & Limousine Commission says it can enforce the geographic limits through GPS tracking, but deep concerns remain over the profitability of such a plan. In a piece on WNYC, which you can listen to below, Kathleen Horan explores why cabbies think Outer Borough rides are unprofitable. The issues, she says, concern return trips and the need to pick up a certain number of passengers to make a living.

Essentially, cab drivers say they need between 20-30 trips to make a profit, and long trips to the Outer Boroughs with no guarantee of a return fare eat into their time and intake. Still, says the TLC, part of the agreement that comes with the medallion requires cab drivers to take passengers anywhere within the city, and the commission is looking to raise fines to $500 for drivers who refuse any city-based trips.

If current medallion owners do not find it worth their whiles to take passengers to the far reaches of Brooklyn or Queens, it’s doubtful that an Outer Borough-based medallion system which bars drivers from cruising the most popular of avenues in Manhattan will alleviate that crush. Even with cheap medallion prices, cab drivers have to combat gas at $4 a gallon and a host of other daily costs that require them to stay busy throughout the day.

Finally, cab drivers are also seeking a fare hike as well. Outside of the MTA surcharge added in 2009, cab fares have not increased in seven years, and rider activists say those rising gas costs are eating away at slim profit margins. The Taxi Workers Alliance is proposing an increase in the per-mile rate from $2 to $2.50 while all other surcharges and the drop-off fee would remain the same.

“When gas hits $4.50 a gallon, it can make it hard for a driver to pay the rent and put food on the table,” Yassky said of the request. “We will give it a look and evaluate it on the merits.”

The Taxi & Limousine Commission believes it has an Outer Borough* problem. They know that yellow cab drivers, looking to maximize their own profits, dislike long trips out of Manhattan, and they know that in all but the most well-off areas in Brooklyn and Queens, yellow cabs are nearly impossible to come by. The Commission has tried upping fines for belligerent drivers, and Mayor Michael Bloomberg has put forward an ambitious plan to allow livery cabs to pick up hails outside of Manhattan.

Yet, that plan appears to be on the chopping block. In the face of widespread and well-organized resistance from cab drivers and their advocates, City Hall’s plan to expand the contours of livery service is as good as dead, according to The Wall Street Journal. Per Andrew Grossman, the T&LC, in the face of opposition from the yellow cab drivers, is now looking for ways to, as the Journal says, “use yellow cabs—not livery cars—to expand taxi service outside of Manhattan.” Said on person, “I believe we are completely off the mayor’s original plan. I would go as far as calling it dead.”

Grossman has more on the opposition and the shape of things to come. He writes:

Yellow-taxi owners and drivers have been united in their opposition to Mr. Bloomberg’s initial proposal. They worry that if another type of non-yellow cabs are allowed to pick up people who hail them, revenue from fares and the value of a taxi medallion will decline. They also said that the city doesn’t do enough to enforce rules barring livery cars from picking up passengers without pre-arranged trips.

City officials rejected that argument, saying that since nearly all yellow-taxi pickups take place in Manhattan and at the airports, the new cabs wouldn’t cut into business. The taxi commission is increasing the number of citations it writes for illegal pickups. The City Council’s Transportation Committee is slated to hold a hearing Wednesday on legislation that would raise fines for violators.

Now, though, City Hall seems to be retreating on a central piece of the mayor’s plan for the outer boroughs: letting livery cars pick up passengers who hail them. Instead, the industry, City Council and the taxi commission are talking about plans that “preserve the yellow taxi’s exclusive right to a street hail,” while still giving people in more neighborhoods outside Manhattan the ability to hail a cab, another person familiar with the conversations said.

The details of the new plan are still being negotiated, but Grossman reports that it could include either more medallion sales with pressure to make more Outer Borough pick-ups or yellow cab stands in Outer Borough locations. For what it’s worth, cab stands within Manhattan have been met with limited success. It’s tough to see how that would translate to more availability outside of the island.

The Taxi and Limousine Commissioner David Yassky issued a guarded statement about the talks. “We’ve had some truly productive discussions with the Council and the various stakeholders on the plan, and a lot of ideas have gone back and forth across the table. Whatever form the final plan takes, Mayor Bloomberg said in January that we want to see the same high level of taxi service available to people in all five boroughs, and that’s the bottom line,” he said.

The issue though is one of market capitalism vs. a regulated industry. New York City’s yellow cabs are a regulated industry that exists by the grant of medallions from the Taxi & Limousine Commission. Along with that medallion comes terms that require cab drivers to travel anywhere within the five boroughs, but as cab drivers seek to make a living, they find that long trips outside of Manhattan aren’t profitable. There is no guarantee of a return fare, and the trip can take valuable time off the clock.

Yet, 80 percent of New Yorkers live outside of Manhattan and deserve better cab service, and cab drivers operating by a government license shouldn’t deny anyone a ride. A comprehensive plan would address all of these concerns, but with a strong taxi industry pressing back against changes, I’m not optimistic the compromise will be a good one for non-Manhattan residents of the city.

* I don’t use this team as a derogatory reference to parts of the city that aren’t Manhattan. It’s just meant to shorthand so I don’t have to type out “Brooklyn, Queens and the Bronx” over and over again.