An NYC taxi medallion has been a better investment than gold or a house since 1980. (Via Bloomberg News)

Getting stuck in Albany is no one’s idea of a good time. It’s even worse when the thing stuck is not a person but rather a bill designed to improve transportation options in New York City, but that’s exactly what’s happened with the Mayor’s plan to expand livery cab access outside of the core area of Manhattan.

The plan, as we know it, is not without controversy. Mayor Michael Bloomberg, who has made it a goal to improve taxi access for everyone who wants to travel from one point outside of Manhattan to, well, everywhere. With 97 percent of yellow cab rides originated within Manhattan south of 96th St. or at an airport, millions of New Yorkers are left searching for cabs in vain. In April, Bloomberg proposed a plan to legitimize street hails for livery cabs. By granting 30,000 limited medallions to livery cabs, Bloomberg’s plan would allow these cabbies to pick up passengers anywhere in the city but in Manhattan south of 96th Street. It would raise $1 billion for the city — a key point — and provide increased transportation access.

But the best laid plans often run into politicians beholden to powerful lobbyist groups, and the City Council, under the influence of medallion owners, was destined not to pass the bill. Bloomberg went to Albany, and while the Assembly and Senate approved the bill, they have reportedly yet to present it to Gov. Andrew Cuomo for his signatured. Residents want to see the changes, but fleet owners have been looking to kill the bill since mid-July. After all, if a taxi medallion is a better long-term investment than gold, why would these medallion owners — who generally are not the drivers — want to risk competition even if the 30,000 new medallions would go to drivers who wouldn’t compete with the yellow cabs?

The bill’s opponents have mounted some rather convoluted offenses as well. Take, for instance, this letter from Public Advocate Bill De Blasio. As Public Advocate, De Blasio is supposed to advocate for the people of New York City, but it appears as though he’s trying to shore up support from powerful and wealthy medallion owners as he eyes as the 2013 mayor race. He says:

This plan likewise threatens the livelihood of livery cab base owners and drivers. For decades, livery cab companies have offered reliable and legitimate pre-arranged cab service throughout the five boroughs of New York City. However, the current taxi plan will place substantial barriers in front of those providing legal, prearranged car services. If the Mayor’s plan becomes law, the existence of newly-permitted livery cabs capable of picking up street fares will no doubt significantly decrease the demand for prearranged car service. This plan will also likely increase the incentive for non-permitted livery drivers to pick up street hails illegally.

Apparently, De Blasio seems convinced that limo companies that guarantee pick-up service will find their customers waiting endlessly as drivers get needlessly distracted by street hails instead. I’m not entirely positive how one draws that conclusion from a plan that would allow street hails; it seems anathema to the workings of the car service market which relies upon good service and good word-of-mouth to gain popularity. But De Blasio’s words suggest exactly who is opposing the taxi measure.

As recently as ten days ago, it appeared as though the bill would die a death at the hands of powerful interest groups who have been lobbying Albany for months. Yet, the allure of the dollar is a strong one indeed, and Gov. Cuomo is pushing Bloomberg and the bill’s opponents toward a compromise. If the city could indeed realize $1 billion from the sale of new medallions, it is better to find a solution to the impasse than forego easy money in tight times. “When you can find revenue without raising taxes, grab it,” Cuomo said last week.

For now, we can glimpse the basic contours of a potential resolution. Facing criticism by U.S. Senator Tom Harkin, an Iowa Democrat who has championed the rights of the disabled, the old bill will give way to one with more protections for riders and yellow cabs. One Assembly representative — Micah Kellner — wants to sell 1500 new yellow medallions for handicapped accessible cabs in addition to 6000 new “outer borough” medallions. Of those, 1200 would have to be handicapped accessible. State Senator Martin Golden wants to cut the number of new medallions down from 30,000 to just 10,000 to placate the yellow cab industry.

And that’s where things are now. Powerful interests are fighting against a plan that would help millions of New Yorkers who would benefit from increased access to street hails. The resolution will drag on through the fall, but I’m optimistic that something positive will emerge. The bill and the debate, both nearly dead ten days ago, live on.

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

As the flurry of legislative activity wrapped up in Albany last month, the Assembly and Senate took taxicab matters into their own hands. With some urging from Mayor Bloomberg, state representatives chose to act with the knowledge that the City Council would kowtow to the demands of the medallion owners and stymy the bill. Now, nearly a month later, we wait to see if Gov. Andrew Cuomo will sign the bill or veto it. Whose interests is he protecting?

The plan, as I’ve outlined in the past, is geared toward ensuring that underserved areas of the city can legally hail taxis. The plan will put up for sale 30,000 medallions for $1500 with conditions. These medallions can only be used for street hails north of 96th St. in Manhattan and anywhere in the Bronx, Brooklyn, Queens and Staten Island. They are designed to improve access to taxis while ensuring that areas where current taxi drivers say they pick up just three percent of passengers have legitimate street service.

In The Times today, Christine Haughney goes behind the scenes at the intense lobbying taking place in Albany. Cuomo has allowed the bill to sit on his desk for the better part of a month as he mulls over the fate of surface transportation for millions of New Yorkers who live in areas underserved by yellow cabs. He has been silent. She reports:

The fleet owners have stepped up efforts to persuade the governor to veto the legislation, arguing that the measure could jeopardize one of the city’s most vital industries. David Pollack, executive director of the Committee for Taxi Safety, a group that handles leasing operations for yellow medallions, said taxi drivers continue to send letters and call the governor’s office to oppose a plan that “would devastate 50,000 hard-working taxi drivers by flooding the market with new taxis.”

Michael Woloz, a spokesman for the Metropolitan Taxicab Board of Trade, echoed Mr. Pollack’s fears, adding that these cars would limit yellow taxi service. “We are currently educating the governor’s office on the many policy, economic, procedural, legal, operational and logistical problems with this bill,” Mr. Woloz said…

Micah C. Lasher, Mr. Bloomberg’s chief lobbyist in Albany, said the mayor would continue to talk with the governor about how “this represents important and very positive public policy for the residents of New York City.” At the same time, Mr. Lasher said, “we plan to be responsive to the concerns of medallion owners in implementing the plan.”

While medallion owners are lobbying against the bill, the city’s Taxi & Limousine Commissioner David Yassky says residents are eager for the changes. “We’ve gotten tremendous reaction from people in Brooklyn and Queens and the Bronx,” he said to The Times. “Not a day goes by when I don’t hear people say, ‘That’s such a great idea.’”

The economics of the opposition doesn’t make much sense, and Cap’n Transit has written an extensive takedown of the system and new plan. (Start poke around his site.) If taxi drivers aren’t keen on going to these underserved areas and don’t cruise around for fares, they won’t lose business, and the yellow medallions, which still provide exclusive street service in Manhattan and pickups at the airport, won’t really be devalued that much. It’s certainly not going to devastate the 50,000 cab drivers as, if anything, it will impact the rich medallion owners instead.

So we wait on Cuomo, and we wait for a key piece of transportation legislation. Taxis are an integral part of a public transit network. Sometimes, the subway or a bus can’t take us where we need to go. Sometimes, we need the trunk space, the speed or the convenience of a car service. Comprehensive taxi service allows for less car dependence in an urban area. Cuomo should sign the bill.

As the City Council, beholden to the interests of those who own taxi medallions, has delayed action on Mayor Michael Bloomberg’s plan to expand taxi service beyond the cozy confines of Manhattan, the mayor has found an ally in Albany. In an attempt to bypass the city’s homerule and with prodding by the mayor, the Assembly and Senate are both considering a bill that would legalize street hails for livery cabs north of 96th St. and outside of Manhattan. With the legislative session set to end this week, action could come quickly.

Both The Wall Street Journal and The New York Times reported on this news late Sunday night, and the full text of the bill under consideration is available here. The move is essentially an end run around the City Council. Andrew Grossman from The Journal has more:

Lawmakers are on the verge of approving sweeping changes to New York’s taxi industry with the aim of improving cab service outside Manhattan. The changes include the creation of 30,000 permits that would allow owners to pick up passengers who hail them on the street everywhere in the city except at the airports and below West 110th Street and East 96th Street in Manhattan. Those permits would sell for $1,500, and the new cabs would likely have meters.

Currently, only yellow cabs with one of the 13,000 medallions—which sell for more than $800,000 on the open market—tacked to their hoods are allowed to pick up passengers who haven’t called ahead. But city data show that yellow taxis rarely stray beyond the airports and Manhattan south of Harlem. Everywhere else, New Yorkers looking to hire a car usually either have to call ahead or flag down a livery cab. The latter practice is illegal but common.

Since January, Mayor Michael Bloomberg has been trying to change that by creating a new kind of taxi that could be hailed legally in places where pickups that are currently illegal often happen. Each new plan presented by the city has angered a different part of the taxi industry. A version of the plan similar to the one under consideration in Albany was stopped by the yellow-taxi industry’s allies in the City Council earlier this year. But the bills lawmakers could vote on early this week don’t require council approval because they deem improved taxi service in the outer boroughs a matter of “substantial state concern.”

If Albany acts on this measure, you can bet that lawsuits will follow nearly immediately. The bill itself says that the “substantial state concern” focuses around the “public health, safety and welfare of the residents of the state of New York traveling to, from and within the city of New York.” It claims that “the majority of residents and nonresidents of the city of New York do not currently have access to the necessary amount of legal, licensed taxicabs available for street hails when traveling within the city.” Despite the truth of that statement, relying on that claim for purposes of overriding home rule in regards to a matter entirely within the purview of the City of New York may be a different (legal) matter all together.

Ultimate legal challenges aside, the livery and yellow cab industries are, as The Times notes, springing into action. Yellow cab owners worry about the devaluing of their medallions. “If one livery car has a meter in it and has the right to pick up street hails, every single livery in New York City will look at that as a green light to do what they are doing illegally now, and that’s picking up our fares,” David Pollack said. “This is life and death for the yellow taxi industry.”

But it isn’t. In fact, recent news coverages has more than adequately exposed the contradictions inherent in Pollack’s hyperbole. Yellow taxi drivers often refuse to take folks to non-Manhattan destinations and rarely cruise for hails in those neighborhoods because it’s just not worth it. In fact, some in the taxi industry say outer borough fares are just three percent of their total take. These yellow cab drivers can’t complain about longer trips over bridges and through tunnels while the medallion owners complain about competition. Something has to give. (For more, check out Cap’n Transit’s recent post.)

Meanwhile, the livery owners aren’t too keen on this plan either. Fernando Mateo of the New York State Federation of Taxi Drivers summed it up: “We are in disbelief that this is what we’re winding up with. It’s better that we keep the status quo as it is. Why create change? It’s not right. I don’t understand what the mentality at City Hall really is right now.” The federation seems to be concerned that the cost of the medallion will price some livery drivers out. Those who can afford it will legally be allowed to pick up street hails while others will fall behind.

Ultimately, then, this seems to be an imperfect solution to a problem that no one is willing to tackle properly. Taxis play a vital role in urban life where people can’t afford to and don’t want to rely on personal automobiles for trips that aren’t suitable for buses or subways. People in New York City need taxis to play a role travel, and right now, medallion owners, yellow cab drivers and livery cab companies do not see their interested aligned with each other or with the 7 million of us who live outside of Manhattan or north of 96th St. This plan seems to be a solution, but it likely isn’t the solution.

The Taxi & Limousine Commission yesterday released a set of data concerning the misguided dollar van pilot program yesterday, and while I’m still working to track down the numbers, Transportation Nation clued us into the findings. In a phrase, they are not good, and in fact, the TLC is considering the program a complete bust.

Here’s how Andrea Bernstein reported the news:

Along the B23 line in Brooklyn, 1580 riders used to take the bus. Two took the privately run commuter vans. The most “successful” line was along the former Q79, which had 650 riders, and about 27 customers a day.

According to the TLC “Lessons Learned:”

• Drivers won’t cruise where there is no demand.
• Timing is everything.
• Local outreach/advertising is essential.

The TLC recommends the pilot “be terminated and the lessons learned from it be used to inform other projects in underserved areas.” It says the three-month lag in setting up the commuter van meant commuters found other options, and by then, drivers weren’t cruising for non-existent drivers.

If your initial reaction to this news is one of shock that a leading taxi agency operating in 2010 needed a disastrous study and pilot period to learn these lessons, well, you’re not alone. In fact, these are lessons that Cap’n Transit knew back in October and lessons that I wrote about in March. If two amateur transportation analysts understand how to run a semi-successful dollar program, why didn’t the TLC? It’s almost as though they set this up to fail from the get-go.

The Nissan NV200 is reported to be the Taxi of Tomorrow.

The Nissan NV200, the least popular model of the three finalists, will be the city’s Taxi of Tomorrow, Mayor Bloomberg is set to announce today. After a lengthy RFP process and a public comment period, the city chose to ignore the popular vote to go with a car that seems to be practical, cheap and ugly to replace the Crown Victoria. On the bright side, the Nissan NV200, with a fuel economy of around 35 miles per gallon and the option to go electric, is far more fuel efficient than the current fleet, but the design is lacking in both creativity and accessibility.

The city’s decision to award Nissan with an exclusive ten-year deal to provide the city with bulky, ugly taxi vans that will enter service in 2014 is not without controversy. In terms of popular support, Nissan’s vehicle not only finished third out of three among voters but did so by a significantly large margin. Only 236 out of more than 19,000 voters supported the design. Meanwhile, city officials are already alleging a conflict of interest in the decision.

This news, though, comes as little surprise as in recent days it seemed clear that the city was leaning toward an established manufacturer of taxis for this contract. As The Times reported yesterday, the city had rejected the Turkey-based Karsan’s design, complete with see-through moon roof, over viability concerns. Karsan has yet to make a car for an American market, and despite promises of a factory in Brooklyn, the company reportedly would likely not be able to meet the demands of the Taxi of Tomorrow program.

Meanwhile, the Nissan car, in use in Asia and Europe, is far from perfect. From a design perspective, it’s bulky and ugly, and it’s tough to say this is an “iconic design that will identify the new taxi with New York City,” as the original project guideline requested. It takes up a lot of space on the road — not necessarily a bad thing as its sliding doors should eliminate potential “doorings” in accidents with cyclists. But the car is not ADA-compliant, and advocates for disabled riders are not happy with it. In fact, because this is a comprehensive city-based scheme, it could be vulnerable to a legal challenge.

Back in November, Mayor Michael Bloomberg spoke guardedly about the competition. “Each is promising, but none is perfect,” he said. “We are not obliged to go with anything if it does not meet our needs.” It appears as though the city has decided to go forward with a vehicle, albeit one I find uninspiring, boring and flawed. For a project that’s supposed to be forward-looking, the design is decidedly and rather bulky. The taxi fleet deserves better.

* * *

Update (4:10 p.m.): Reuters has a story up with the official announcement. Nothing too exciting, but the Mayor spoke highly of Nissan’s offerings. “It’s going to be the safest, most comfortable, and most convenient cab the City has ever had,” he said. “We started this process to leverage our taxi industry’s purchasing power to get the highest quality taxi. The new taxis will be custom-designed to meet the specific demands of carrying 600,000 passengers a day.”

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.

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

My first true exposure to the politics and economics of transportation came during my junior year in college when I took a course on the automobile. For my final project, I wrote a detailed treatment of New York City’s taxicab industry and explored why it should be an aggressive first-mover in the environmental space by hybridizing its entire fleet. If you care to read it, it’s right here as a Word Document.

The city obliged my early transportation whims when it became to implement such a policy, but as with any change, cab drivers threw a few. The hybrids didn’t have enough trunk space; they were too expensive to maintain; they can’t withstand the abuse of daily work on the pothole-laden streets of New York. Yadda yadda yadda.

Eventually, a lawyer figured out a way to challenge the city’s move by highlighting a preemption argument under the Clean Air Act. The city, said a federal judge, was precluded from enforcing gas mileage standards because Congress had preempted the field via federal legislation. It seems crazy to think that a federal court would find the Clean Air Act a preemption of New York City’s efforts at regulating the taxi industry, but there go.

The city tried to enforce a different policy — offering cab drivers financial incentives to switch to hybrids. That effort too was deemed a “de facto mandate” in violation of the city’s inability to regulate vehicle emissions standards, and while New York could license hybrid taxis and include them on the allowable list of vehicles, the city could not mandate them. Of course, an appeal to the Supreme Court followed.

Yesterday, the high court declined to hear the case, thus ending an important environmental effort for now. City officials were upset. “I am bitterly disappointed,” Taxi and Limousine Commission Chair David S. Yassky said. “New York City is trying to reduce literally millions of tons of carbon dioxide emissions, and the Supreme Court has told us we can’t do it. I cannot imagine when Congress wrote the Clean Air Act that they intended to handcuff states and cities trying to clean their own air.”

Michael Bloomberg too expressed his displeasure with the ruling, and he appealed, off-handedly, to a theory of federalism in which states server as laboratories for federal policy in a democracy. The cities are those that are addressing real-world problems like climate change and energy policy,” the Mayor said. “The federal government seems unable to address those issues.”

So what’s next? Senator Kirsten Gillibrand is on the case. Via Twitter, she said she would again pursue an effort to gain Congressional approval of her Green Taxis Act. She attempted to usher in this piece of legislation in 2009, but the Senate did not act on it. The bill would “authorize States or political subdivisions thereof to regulate fuel economy and emissions standards for taxicabs,” and the full text is available online. Hopefully, this measure can gain approval in DC.

Meanwhile, the city is moving forward with its plans for the Taxi of Tomorrow. The Karsan design has been chosen as the people’s favorite, and the city will soon make its determination from one of the finalists. If the winner is fuel efficient and offers a more sustainable ride, perhaps all of this litigation will have been for naught. Still, the city should be able to mandate its own fuel standards for its taxi fleet, and this non-decision by the Supreme Court is both unsurprising and dismaying.

The Karsan taxi, designed specifically for the Taxi of Tomorrow project, won the support of the public.