Home Taxis A plan to limit taxi medallions to Outer Boroughs

A plan to limit taxi medallions to Outer Boroughs

by Benjamin Kabak

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.”

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Jonathan April 28, 2011 - 12:35 pm

It’s unlikely that a more regulated product like an off-yellow, “avocado” cab would be cheaper to operate than a livery cab, especially if operating in the same markets. Perhaps in the wake of City Time, the mayor can assign some of his newly empowered staff IT professionals to the task of creating a phone-based automatic dispatch system that anyone could use to call a cab from anywhere in the city, with one telephone number and some kind of fixed-rate zone system.

Alon Levy April 28, 2011 - 6:10 pm

Unlikely. We’re talking about a man who rejected a program to automatically match substitute teachers to principals who needed them, which would’ve saved the city $20 million, on the grounds that schools should be run like independent businesses.

Bolwerk April 28, 2011 - 12:44 pm

This could ultimately have the same outcome as the previous plan. Between the old proposal and this one, the main difference is liveries would have to change color and get a medallion. Not even a bad idea, since it could raise revenue for the city – and I presume these new outer borough-only cabs could still function as liveries should the cab company choose to do so.

jim April 28, 2011 - 1:21 pm

If the right to pick up passengers “are typically sold at auction and can be worth nearly $1 million,” it’s hard for medallion owners to cry poverty. I’m sure they will, though.

Bolwerk April 28, 2011 - 1:23 pm

The owners probably do okay, but the owners aren’t necessarily the drivers.

Duckie April 28, 2011 - 2:35 pm

It seems to me that one of the things that is missing is an incentive for drivers to come to the outer boroughs and pick up fares. I see two possibilities: An outer borough surcharge for a pick-up (excluding at airports) that begins and ends in a borough other than Manhattan or some sort of tax credit or rebate for every fare picked up in the outer boroughs. In the first instance, the drivers make more money for point to point travel in the outer boroughs at the expense of the individual riders, who gain a convenience they don’t have. Such an arrangement could be attractive if the surcharge is only a dollar or $1.50. The customer would still have the freedom of calling a car service. In the second example, the GPS system would be able to determine how many fares were eligible for the credit or rebate. A dollar or two of tax credit to the driver for each point-to-point fare in the outer boroughs might be an attractive incentive to pick up a street hail.

Bolwerk April 28, 2011 - 3:10 pm

A surcharge would probably only further de-incentivize outer borough passengers. The inherent problem with outer borough pickup is there isn’t a critical mass of taxi users. A dropoff in much of Manhattan guarantees a quick ride to a new fare. A dropoff in Queens probably means a long ride back to Manhattan.

Alon Levy April 28, 2011 - 6:12 pm

Perhaps it’s possible to arrange some sort of round robin, going between Manhattan, Brooklyn/Queens, and an airport. Beyond the traffic jams of Manhattan and the inner parts of Brooklyn and Queens, a taxi is much faster than the AirTrain, and not much more expensive once you factor in an additional subway or especially LIRR fare.

Benjamin Kabak April 28, 2011 - 6:25 pm

not much more expensive once you factor in an additional subway or especially LIRR fare.

I’d beg to differ. For me to go from Park Slope to JFK on the AirTrain takes a while costs an unlimited swipe + $5. For me to take the same trip in a cab, takes about 20 minutes less and usually costs about $35-$40 more.

Bolwerk April 28, 2011 - 6:32 pm

Yeah, I don’t see many airport trips costing under $30 by taxi for anyone in an inner part of an outer borough, much less Manhattan. I suspect many of them do a “round robin” anyway, at least if they’re reasonably close to the airport. However, there are probably two problems with the idea:

1) no nearby airport in much of Brooklyn, SI, The Bronx, or even inner Queens.

2) the airport might not be a surefire profit. A guaranteed minimum fare is available in exchange for what could be a long wait in a taxi line.

(And I’m assuming they can just go on a first-come, first-serve basis. No idea if that’s how it works.)

Alon Levy April 28, 2011 - 10:11 pm

Well, I was thinking way farther out than Park Slope. From Forest Hills, it’s, like, $13 and 13 minutes. The AirTrain would’ve cost $4.50 with the pay-per-ride discount.

Benjamin Kabak April 28, 2011 - 10:13 pm

Oh sure, if you’re talking about Forest Hills, but Forest Hills is 15 minutes away from JFK. Most of the rest of the city isn’t that close.

Alon Levy April 29, 2011 - 3:43 am

Oh, sure. But large chunks of the city are that close. To pull boundaries ex recto, let’s say Brooklyn from East New York east, and Queens south of the LIE and east of Middle Village.

Bolwerk April 29, 2011 - 9:00 am

Is that even a million people?

Alon Levy April 29, 2011 - 1:46 pm

About 1.1-1.2.

Ed April 28, 2011 - 6:29 pm

I usually disagree with the Bloomberg administration, but this is one of those proposals where I wonder why it wasn’t done this way to begin with.

If I was designing the taxi system from scratch, medallions would be assigned by county (borough), with medallions for each county auctioned, so presumably medallions for the more lucrative counties (Manhattan) would be worth more. The airports could be treated as a separate county, with separate medallions, though since the two within the city are in Queens it might be better to have drivers simply purchase Queens medallions if they want the airport fares.

There would be no reason a driver couldn’t get a medallion, for example, only for the Bronx, and be limited to making trips in the Bronx. But he could purchase a second medallion for Manhattan as well, and made trips in both places. I suspect that most drivers would buy the Manhattan medallions only at first, but the market would correct itself as drivers noticed how cheap the outer borough medallions were and how limited the competition was there.

A cab with a medallion for one borough only would be painted a distinct color, with a sixth distinct color for the Manhattan-Queens (or Manhattan-airport) only cabs, so someone hailing a cab would know immediately where in the city the cab would not go. Multi-borough medallion cabs would be painted the traditional yellow, plus a symbol for each borough where they had a medallion. If nothing else, this would make it very clear to what extent cab drivers were interested in providing service to the outer boroughs, and public opinion and public policy could adjust accordingly.

In other cities, do cab drivers insist on only driving in the central city and refuse to take fares to outlying areas?

Socrates June 3, 2011 - 9:49 am

Makes no sense.

Cabbies need to be able to pick people up in the neighborhood where they drop people off. A lot of the people you pick up in Queens or Bklyn will be going into Manhattan. So you bring a couple from Greenpoint to Lincoln Center and then what? Go back empty? Troll Spanish Harlem which has pretty good bus service already? Look – the garages are in the outer boroughs. Most people have cellphones, they can call the cab company like they do in other cities. Just let them add a $3 cross-borough surcharge (both ways) and a $5 Jersey surcharge (both ways) in addition to tolls. If you’re in that big a hurry to get from Greenpoint into the city you can pay the surcharge – otherwise leave early and take the G to court square and then the 7 to midtown.

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