Archive for Taxis

Let’s start with a premise that not everyone seems to accept: The MTA and Uber — along with the MTA and green taxis, yellow taxis and your favorite local car service — aren’t really competitors. While the recent spike in volume of black taxis due to Uber is problematic for other reasons, these two services aren’t competing, as Cap’n Transit recently detailed, for the same dollars these days.

That doesn’t mean, in a somewhat twisted way, Uber can’t be helpful to the MTA, but it does mean you should raise a very skeptical eyebrow at coverage that says Uber is “costing the MTA dearly.” When that coverage then that states that “dearly” means $1 million a year — which is around 0.007 percent of the MTA’s annual operating budget, you should just laugh it off as uninformed tabloid sensationalism. But I digress. Let’s talk about taxis and the MTA’s finances.

For a few years, the state has collected a 50-cent surcharge on every yellow and green taxi ride, and this money goes toward the MTA’s finances. One of the reasons revenue has dipped from $48 million annual to $47 million is because Uber has eaten into these cabs’ shares of rides. Now, as the MTA faces a significant budget gap and the state and the city will have to implement something to generate dollars, the Citizens Budget Commission, as part of its effort to promote a 50-25-25 MTA funding plan (where fares cover 50%, taxes 25% and cross-subsidies from cars 25%), has put forth a call to tax all subway rides. You can read the full policy brief right here. Here’s the meat of it in three proposals:

Expand Coverage of Per-Ride Taxicab Tax. The current 50-cent per-ride taxicab tax is intended to charge riders, who do not necessarily pay other cross-subsidies from vehicle ownership, for the negative externalities of their trips. By this logic, applying the tax to all black car trips, including DSPs, would have raised an additional $33 million in 2015. This amount would grow to between $34 million and $55 million by 2019.

Increase and Expand Per-Ride Taxicab Tax. When the taxicab tax was instituted in 2011, it represented approximately 4.73 percent of the average taxi fare. After increases in taxicab fares, the figure is 3.95 percent today. If the tax applied to black cars, including DSPs, were set at a rate, rather than an amount (50 cents), then the tax would be 3.95 percent of the fare. With black car fares averaging more than $27, their average tax would be about $1.00 rather than 50 cents. This new tax on black car riders would have generated an additional $70 million in 2015 and between $73 million and $117 million in 2019.

Transportation Sales Tax Reform. A third option is to lower the burden on black car riders and dedicate the entire tax to the MTA. The new rate could be set sufficient to close the MTA funding gap; a rate of 5.75 percent, assuming that current trends in the industry continue to 2019, would cover debt service on $2.6 billion of borrowing. While this option would require the State and City to forfeit sales tax revenue from this industry, it would fund the shortfall in the MTA’s capital plan and provide a likely growing revenue stream for this purpose from both jurisdictions.

It’s easy to misinterpret this report as an attack on Uber, as Uber is mentioned 30 times while yellow, green and livery cabs are mentioned a combined 40 times, but it’s not an attack on Uber as much as it is a challenge to allocate funds in a way that captures the negative externalities of auto trips on surface streets in New York City. To that end, one of these proposals should be implemented, and I’d lean toward the third option as it would generate sufficient revenue for the MTA to fund debt service for capital plan borrowing.

A final idea comes to us from Stephen Miller at Streetsblog. He calls upon the city and state to implement a variable surcharge on taxi rides that would mirror a congestion pricing scheme. “Ideally,” he writes, “the surcharge paid by yellow taxis, Uber, and other for-hire services would be higher in the congested Manhattan core than in outer-borough neighborhoods lacking decent transit service. While that wouldn’t be a substitute for real congestion pricing of all motor vehicle trips, it could set a precedent and demonstrate the impact of congestion-based fees on a substantial portion of Manhattan traffic.” This too seems to me like a no-brainer if we want to combat congestion while generating money for the MTA.

Ultimately, these CBC proposal and Miller’s plan are ideas that will have to be addressed by city and state politicians who have been challenged to fund the MTA’s capital plan gap. We’ll hear more about the political battles as the fall unfolds, but right now, during summer, the ideas are percolating appropriately.

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With just a few weeks to go before the rules implementing the Taxi of Tomorrow were to take effect, one of Mayor Bloomberg’s signature plans may be dead as a New York State judge ruled today that the city does not have the authority to implement such a plan. In siding with the taxi industry over the city in the battle over the Nissan NV200, Judge Shlomo Hagler summed up his view, “Simply stated, the power to contract and compel medallion owners to purchase the Nissan NV200 from Nissan for ten years does not exist in the City Charter.” Rather, Hagler opined, the City Council should set these standards.

Bloomberg, no friend of the taxi industry, had first announced the Taxi of Tomorrow competition as a way to leverage the city’s purchasing power while selecting cars that were safe and spacious. The move has come under fire in recent months though as the Nissan NV200s are not as fuel-efficient as the options available for the current fleet and aren’t handicap-accessible either. His administration will appeal, but it is unclear if our next mayor would continue the site as both Joe Lhota and Bill de Blasio have not embraced the Taxi of Tomorrow.

Meanwhile, as Ted Mann notes in The Journal, this ruling could leave the city liable to Nissan for some costs as well. As Mann writes, “The carmaker’s contract with the TLC would permit it to recoup design and production costs in the event the taxi project is cancelled by the city. Nissan estimated those costs, in a document previously filed with the court, at roughly $50 million, though some familiar with the matter have said the costs could be higher.”

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Fuel efficiency was not a criteria for the Taxi of Tomorrow. (Photo via the Taxi and Limousine Commission)

A long time ago, way back in early 2004, during the spring semester of my junior year of college, I took a class on the politics and economics of the automobile industry. In a way, I credit that class with launching my interest in public transportation as we focused extensively on the many drawbacks of an auto-centric and auto-dependent society. For my final paper, I proposed converting New York City’s taxi fleet to an all-hybrid one.

For much of the latter part of the 2000s, it seemed as though the city had embraced this idea. The Taxi & Limousine Commission had allowed hybrids to be included on the list of eligible taxi cars, and as gas prices have risen, taxi drivers have embraced the high-MPG vehicles. Not as roomy as the old Crown Victorias, these cars are nonetheless far more fuel-efficient, and drivers can take home more money at the end of the day.

Of course, the best laid plans often go astray. After a mid-decade push by the City Council to require hybrid cars, the taxi lobby sued, and on what I thought were shaky grounds, a court determined that only the federal government could impose fuel economy standards. Although the city could regulate its own taxis, the ruling stood, and hybrids become a choice rather than a requirement.

Now, that era, however, is over. When the ugly, boxy and large NV200 becomes the city’s one and only Taxi of Tomorrow, the hybrids will be phased out, replaced instead with a vehicle that gets only around 25 miles to the gallon. The look may be uniform, but the daily costs for drivers and the impact on the city’s environment will be significantly more. How did we go wrong?

In my view, this angle of the story hasn’t been covered enough. A push away from hybrids should garner more attention and outrage, but until earlier this week, the press had largely been silent. Dana Rubinstein, Capital New York’s tireless transportation writer, penned an extensively look at the death of the hybrid taxi. Her piece is well worth the full read, but I’ll excerpt:

Not only has the city’s powerful taxi lobby defeated the mayor’s hybrid-cab plan in federal court, but the city is now taking steps that will actually reduce the number of hybrids on city streets. “We were really hoping New York could be a leader,” said Johanna Dyer, an attorney at the Natural Resources Defense Council. “It’s kind of a shame that it seems like we’re falling back a little bit.”

…The idea [for the Taxi of Tomorrow] was this. The city would leverage its market power by offering one manufacturer an exclusive decade-long deal, estimated at $1 billion, to manufacture one tailor-made vehicle for New York. The vehicle would be designed to handle the wear and tear of the city’s pothole-ridden streets and offer both drivers and passengers a more comfortable ride than current cab models do.

The city whittled down the competition to three entries before settling on Nissan’s NV-200. “Fuel efficiency was not used as a specific criterion for evaluation,” noted the mayor’s press release announcing Nissan the winner. (This was the city’s effort to make clear it wasn’t violating federal law, as interpreted by the courts.)…

Green-taxi advocates, noting that a hybrid fleet would have been more fuel efficient than one made up of Taxis of Tomorrow, say that there were steps the city could have taken to incentivize hybrid ownership that would not have violated the law. Roderick Hills, an N.Y.U. Law School professor, thinks the city’s loss in federal court on emissions standards “left the City cowed by the idea of promoting hybrids in their contract with Nissan—much too much so, in my view.”

There’s a lot more to Rubinstein’s story so do click through. She talks about how Nissan could potentially deliver an electric vehicle for the city and how nearly 50 of the fleet today consists of hybrid vehicles. She focuses on San Francisco’s more successful push to make all taxis hybrid cars and the reticence the city has felt in the face of the federal court ruling.

All in all, I find it disappointing. The Taxi of Tomorrow doesn’t have much tomorrow-ness about it. It’s ugly; it’s big; it’s not fuel efficient. It is almost the taxi of yesterday when lower gas prices led to the proliferation of SUVs. It’s going to take six years for the Nissan vehicle to become the only one on the road. I’ll mourn this missed opportunity in the meantime.

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Along with higher fares, New York City taxis will soon sport new exterior markings as well.

When the Taxi & Limousine Commission approved a cab fare hike in July, the board dropped a start date for the hike in an industry notice that otherwise drew little attention. Despite a dearth of press releases or public awareness campaigns trumpeting the increases, the fare hike can go into effect tonight if cab drivers are prepared for it.

As Matt Flegenheimer explains in The Times, the TLC finally decided to announce publicly that cabs that have been repapered and recalibrated can start charging the higher rates as soon as 12:01 a.m. on Tuesday, September 4. Considering how drivers stand to benefit from the 17 percent hike — the first increase in the fare in years — I’d imagine many cabs will be sporting the proper markings as soon as possible. Flegenheimer has more:

The city’s Taxi and Limousine Commission announced late Monday that operators of yellow taxis would be allowed to put the new fares — which increase rates by about 17 percent — into effect as of 12:01 a.m. on Tuesday, once they have recalibrated their meters and updated external markings.

Operators will not be required to institute the fares until their first scheduled inspections after Sept. 30, meaning that the city’s taxi fleet will most likely include a mixture of old and new rates for the next several weeks.

“We anticipate that many taxicab operators will implement the new fare structure as of Sept. 4, so it is extremely important that taxi riders know and understand it,” David S. Yassky, the chairman of the taxi commission, said in a statement. “The taxi industry appears to be experiencing a smooth transition to the new structure, and we want passengers to experience a smooth transition as well.”

Drivers are thrilled with the increase, and they deserve it. The cost of living has gone up; the cost of gas has gone up; and, as we know, the cost of a subway ride has gone up numerous times. But cabbies haven’t seen their takehome pay go up since 2004. With a slightly lesser increase in rental fees, the drivers themselves stand to benefit.

And what of the riders? The $2.50 pick-up fee will remain the same, but a meter tick will jump from 40 cents to 50. A trip from JFK to Manhattan will cost $52 while the Newark Airport surcharge will rise to $17.50. For the benefit of taxi riders, the credit card surcharge on drivers will shift to a flat fee of $9 from its current five percent levy. The TLC believes this move will lead cabbies to be more accepting of plastic.

For now, though, we may see a few weeks of chaos and irate passengers. While subway hikes come down the pike with fanfare, public hearings and numerous signs in stations, the cab fare hike is arriving literally in the middle of the night. The only sign of the hikes comes on the industry page of the TLC website, and until September 30, it’ll be possible to pay two different fares for the same trip depending upon which cab one hails. Riders not clued into the hikes may not be too thrilled with playing New York City taxi version of Russian Roulette.

No matter how you slice or dice it though, cab fares are going up, and as cabs remain an integral part of the transportation scene in New York City, that’s hardly great news. I’m happy for the drivers who have a rough job and take home little pay, but with a subway fare hike on tap for March, getting around is just getting more expensive.

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A home rule dispute has put the green borough taxi plan in jeopardy.

A few months after issuing a temporary restraining order against the Taxi & Limousine Commission’s street hail proposal, a New York State Judge put a stop to the program entirely on Friday afternoon. Justice Arthur F. Engoron declared the law granting the Mayor the right to award 1800 street hail licenses and 2000 medallions invalid on home rule grounds, and while the monied medallion industry is claiming victory, city officials plan to appeal. For now, though, the ruling puts a serious dent into a plan to improve taxi access outside of Manhattan and the city budget as well.

The decision — a bit of a rambling 34-page opus on the history of taxis in New York — essentially boils the whole thing down to a home rule issue. Taxis are an inherently local concern, and despite the push and pull of the taxi medallion owners, the Mayor cannot bypass the City Council to get what he wants. (Read the subtleties right here.) So while the overwhelmingly vast majority of taxi rides are airport-based or start in Manhattan south of 96th St., the rest of the city is left with illegal street hails and haggling over the price.

Dana Rubinstein has some choice excerpts from the decision:

“If every cross-border transaction or out of town trip to the theater district created a substantial State interest, the borders might as well be abolished, and the State can just run everything. Occasional trips across the periphery of New York City cannot justify the State Legislature in driving a stake through the heart of home rule.”

“The contents of the subject legislation are all New York City ‘stuff,'” Engoron continued. “The new medallioned taxicabs and [borough taxis] would be picking up passengers, and almost always dropping them off, in New York City. The Mayor, the TLC, the City Council, are all components of New York City government. The new medallions and licenses would be auctioned or sold by the City, for the City’s financial benefit. The City is up to the task of regulating its own taxicabs.”

Afterwards, the various stakeholders pushing the law pledged to keep up the fight. “We are deeply disappointed by the Court’s decision, and will be filing an immediate appeal,” Michael Cardozo, a lawyer for the city, said. “We are confident that the appellate court will uphold the state law authorizing two important transportation initiatives: providing safe and reliable hail service by liveries in areas of the City rarely served by yellow taxicabs, and providing 2,000 more wheelchair-accessible yellow taxicabs for disabled passengers. The irrational fear of lost profits by medallion owners and lenders should not be permitted to derail these important programs.”

David Yassky, the Taxi and Limousine Commission, said the city will appeal the decision, but for now, the money from medallion sales and, more importantly, the taxis won’t materialize.

Not everyone though was upset with the ruling. The Greater New York Taxi Association, an industry group of very wealthy and powerful medallion owners, hilarious called the ruling “a win for democracy, due process of law and the right of New Yorkers to decide how their own city works.” It’s a win for an organization that has successfully used its influence in City Hall to stymie any effort to cut into their government-granted monopoly. Whether it is otherwise a win for proponents remains to be seen.

So negotiations will continue, and this effort may stretch beyond the Bloomberg mayoralty. Scott Stringer has voiced his support for the project, and other 2013 candidates may yet chime in. Hopefully, an agreement can be reached because this is one transportation initiative that should see the light of day.

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Come September, New Yorkers will be paying more for their cab rides, and the bulk of that increase will go toward taxi drivers. The Taxi & Limousine Commission voted to approve a fare hike today. With six in favor, two against and one abstaining, the commission members authorized what will amount to an average hike of 17 percent. Meter ticks will cost 50 cents, and the flat fare from JFK to Manhattan will climb to $52.

After the hikes, David Yassky, head of the T&LC, called the vote a victory for cabbies. “Taxi drivers have been working hard for six years with no raise,” he said. “There comes a time you need to make sure people can earn a decent living.”

Meanwhile, as I explored on Tuesday, medallion owners were not happy. “What happened today was not a package,” Michael Woloz, spokesman for the Metropolitan Taxicab Board of Trade, said. “It was a lopsided giveback to the drivers.” The Board, whose members will not enjoy a similar bump in the least rate paid by cab drivers, may look to sue the city, but I expect that to be a useless exercise in litigation.

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The most recent increase to the city’s taxi fare structure arrived in 2009 in the form of a 50-cent MTA surcharge, but New York City taxi fares haven’t been restructured since 2004. Cab drivers, who are fighting higher gas prices and a dollar that doesn’t go as far, have been agitating for an increase, and Taxi and Limousine Commission is poised to oblige. In a vote on Thursday, the TLC is expected to authorize a hike that will raise fares by an average of 17 percent per ride.

The details are fairly simple: The $2.50 pick-up fee will remain the same, but a meter tick will jump from 40 cents to 50. A trip from JFK to Manhattan will cost $52 while the Newark Airport surcharge will rise to $17.50. For the benefit of taxi riders, the credit card surcharge on drivers will shift to a flat fee of $9 from its current five percent levy. The TLC believes this move will lead cabbies to be more accepting of plastic.

Although the fare structure is straightforward, the back-and-forth over the proposed hike highlights the battles that impact that taxi industry. The Metropolitan Taxicab Board of Trade, which represents medallion owners, slammed the proposal as retaliation for their lawsuit against the Outer Borough medallion program while the New York Taxi Workers Alliance criticized the modest increase in lease fees the new fare structure will bring.

As Michael Powell eloquently wrote in today’s Times, these are the battles that shape the taxi industry. Wealthy, centralized medallion owners control the purse strings and our local politicians while drivers who make less today than they did a few years ago garner little respect from anyone. Soon, we’ll all be paying more for cabs, and no one, it seems, will be too happy.

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The green borough taxis are currently held up in litigation as the City Council and Mayor Bloomberg square off over homerule.

If we assume that increasing personal mobility without needing a car as well as the lessening of congestion should be a goal of urban policy, then taxicabs are an important part of a transit network. For those rides when buses and subways just won’t cut it, when someone has a too much stuff to tote on the train or finds themselves off the bus network, a taxi can help bridge that gap.

Lately, much to the chagrin of wealthy yellow cab medallion owners, Mayor Michael Bloomberg has been trying to expand the taxi network. The yellow cab industry recognizes that 97 percent of trips originate at the city’s airports or in Manhattan south of 96th St., but the majority of New Yorkers leave beyond those boundaries. They too need the ability to hail cars on the corner instead of calling ahead and hoping for a free car. By authorizing street hails from livery cabs outside of Manhattan, Bloomberg had hoped to extend the reach of taxis.

The medallion industry though has fought back. These are folks who pay top dollar for their cabs and have seen their investments grow by leaps and bounds. Taxi drivers have little to fear from the livery cab industry, but the medallion owners — a politically powerful group with deep pockets — believe a new class of cabs would threaten their money. What, they say, will keep these new apple green cabs from picking up passengers where they shouldn’t?

With the City Council in their pocket, the medallion owners were able to stymie the mayor, but he went above their heads. A few months ago, Albany approved the street hail plan, but after the medallion owners that filed the lawsuit — one joined shockingly by Public Advocate Bill de Blasio — a judge blocked the plan late last week. Ted Mann reported on the temporary restraining order:

Supreme Court Justice Arthur Engoron sided with yellow-taxi industry groups that argued the city and the state Legislature violated the so-called home rule provision of the state constitution. That clause says the state may pass a law directly affecting the affairs of a single municipality only if that city’s legislative body has voted to allow it. After Mr. Bloomberg failed to convince the City Council to back a plan to let livery cabs accept street hails in northern Manhattan and the other boroughs—and to issue 2,000 new medallions for the existing yellow-taxi fleet—the mayor turned to the Legislature and Gov. Andrew Cuomo to pass the bill.

The restraining order brings a sudden halt to the roll-out of new “borough taxis.” The Taxi and Limousine Commission had initially planned to begin accepting applications for the new licenses as soon as Monday, one reason for the haste of the judge’s order. The ruling also halts the planned auction of the 2,000 new yellow-taxi medallions, since the legislative deal required that they couldn’t be sold until the new borough taxis were in operation.

The judge didn’t rule on a preliminary injunction sought by the taxi plan’s opponents, saying he would rule on the substance of that motion “with all deliberate speed.” Michael Cardozo, the city’s corporation counsel, said the city would explore an appeal of the decision, and noted that the city budget depends on $1 billion in anticipated revenue from the sale of new medallions.

Justice Engoron was not too kind to the city. “This court has trouble seeing how the provision of taxi service in New York City is a matter that can be wrenched from the hands of city government, where it has resided for some 75 years, and handed over to the state,” he wrote. “Both governments are democracies, but only one is solely answerable on election day to the constituents of the five boroughs, those directly affected by the taxi service at issue here.”

What has happened here is likely a legal right. I believe Engoron has properly interpreted New York’s home rule requirements. Bloomberg’s leap over the city always seemed more than a little suspect, and Engoron believes precedence supports him. On the other hand, though, the policy is wrong. The City Council is in the pocket of the medallion owners, and New Yorkers need this street hail plan. It would change the way we get around the city.

So now, with a restraining order in place, we wait for Engoron to rule on the temporary injunction. The city cannot realize this $1 billion revenue potential quite yet, and those of us who live in areas without an ample supply of yellow cabs must make do with a wink and a nod. We need the green apple street hail cabs, but no one in the city government will rise to the occasion.

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New Yorkers could be in for a fare hike of another kind later this summer as the Taxi & Limousine Commission is gearing up to boost cab fares by around 20 percent, according to reports. The price jump would be the taxi industry’s first since 2006, and the Commission is considering the hike at the request of workers who are feeling the pinch of ever-rising gas prices and other associated costs. “The fare hasn’t changed since 2006, so it is reasonable for taxi drivers and fleet owners to put this on the table,” David Yassky, T&LC chairman, said. “We will consider their petitions over the next couple of months.”

The taxi rate increases, likely to hit this summer, a few months ahead of the next MTA fare hike, would boost the average ride from $11.82 to just over $14, and the rate to Manhattan from JFK could climb above $50. Drivers and owners, though, are at odds over one aspect of the hike. Car owners have asked for a similar 20 percent jump in the lease cap for taxis, but the drivers do not support such a hike as it would negate any increase in their take-home pay.

As an infrequent taxi rider, I’m not in love with the idea of paying more for these rides, but at the same time, cab drivers need to earn their living as well. The Taxi and Limousine Commission will host a hearing on the rate hike at the end of the month before moving forward, and it’s unclear what impact this will have on the Outer Borough street hail plan.

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While Gov. Cuomo took his sweet time signing the bill authorizing street hails of livery cabs, the Mayor’s pet project is set to go into effect now that the Taxi & Limousine Commission has approved the details. By a 7-2 vote, the commission OK’d the controversial plan even as current medallion owners raised a big stink about it. (Check out Kathleen Horan’s Twitter feed for some great comments. The WNYC reporter was all over this story.)

Even though finding a yellow cab outside of Manhattan or even north of 96th St. can be a challenge, medallion owners viewed these limited-range options as a threat to their core business model. The plan will introduce 18000 new medallions over the next few years and will generate some much-needed cash for the city as well as improving transportation options. The first 6000 will, says Transportation Nation, go on sale in June as long as a lawsuit filed by current cabbies does not succeed in putting a temporary stop to this plan.

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