New York isn’t letting up on ride-hail

Nearly 10 months after the New York City Council passed landmark regulations for the ride-hail industry – including a one-year pause on issuing new licenses to for-hire vehicles – Mayor Bill de Blasio is ready to take those efforts one step further. At a press conference on Wednesday afternoon, de Blasio announced a plan for the city’s Taxi and Limousine Commission to make permanent the cap on for-hire vehicle licenses and to institute a limit on the amount of time that app-based companies like Uber and Lyft can allow their vehicles to cruise without passengers in the core of Manhattan.

Surrounded by members of 32BJ SEIU and the New York Taxi Workers Alliance, a union of New York City taxi, livery and app-based drivers, the mayor and presidential contender said that the extended and new regulations will result in higher take-home pay for drivers. “You deserve a raise, and we're going to get you a raise,” de Blasio told the men and women standing behind him.

Last August, the City Council passed a series of regulations targeting the ride-hail industry, aimed at increasing earnings for taxi and app-based drivers, as well as cutting down on congestion in Manhattan. In addition to the one-year cap, the City Council passed a minimum pay standard requiring drivers for high-volume for-hire vehicle companies to earn at least $17.22 per hour after expenses. The law that capped new for-hire vehicles, Local Law 147, also empowered the TLC to implement other industry regulations including regulating utilizations and licensing. The TLC will therefore only need to vote on the proposed extended cap and new cap in order to enact the new regulations. De Blasio added that the TLC would review the cap annually to determine where it needs to be set.

While the cap on new for-hire vehicles does provide some exceptions – including allowing wheelchair-accessible vehicles and 100% battery-electric vehicles to obtain new licenses – it has been a source of conflict between Uber and the city, as the driver pay standard has been between companies like Lyft and Juno and the city. In February, Uber sued to overturn the one-year cap on new for-hire vehicles, criticizing the city for taking what the company called a “ban first, study later,” approach, as the TLC and New York City Department of Transportation were also tasked with studying the industry while the cap was in effect. That suit is still ongoing, though de Blasio said Wednesday that the city will continue to fight back against the ride-hail industry’s challenges to these regulations.

A report released by the city on Wednesday concluded that for-hire vehicles on average cruise without passengers 41% of the time that they are driving, which de Blasio said is a byproduct of deliberate choices by app-based companies like Uber and Lyft. “It was a cynical strategy by these big corporations to flood the streets with so many vehicles that there was no way they could all be used at the same time, to take as much market share as possible no matter what it did to the city, no matter what it did to the workers,” de Blasio said. “What we saw has been proven: more and more cars driving with no one in them but the driver, and clogging up the streets and driving down the wages. So everyone was losing, except those corporate titans.”

The mayor wants to cut down on the time drivers are cruising without passengers by capping that percentage of time to 31% when driving below 96th st. in Manhattan. This requirement would only apply to the four high-volume for-hire services operating in New York City: Uber, Lyft, Via and Juno. The TLC defines high-volume for-hire vehicle services as those with bases dispatching more than 10,000 trips per day.

Ride hail companies submit a wealth of trip data to the TLC, including time spent driving and revenue, and that kind of data will be used by the city to enforce the new regulation. “It is enforceable because New York City TLC made great strides in the last five years to ensure that the agency has the necessary trip data,” former TLC Commissioner Meera Joshi wrote in an email. “Enforcement is basically data-run.”

Still, it’s not explicitly clear how the city will account for time spent driving without a passenger if the driver is on the way to pick up a passenger or is on its way out of Manhattan in order to avoid idling without a passenger too long. De Blasio suggested that those nuances will be taken into account in what is counted as “cruising” time. “My understanding is the technology obviously allows the company to monitor each driver and they're going to train the drivers in how to conform with these rules,” he said. “So if you're going somewhere to pick up another fare, that's okay, that's part of the equation. But the goal and the requirement is to reduce the overall cruising time.”

In a statement, Uber objected to the mayor’s announcement, saying that capping for-hire vehicles encourages something akin to the taxi medallion system, which by limiting the number of licenses to drive taxis caused the price of those medallions to boom and bust. “The mayor’s cap will create another medallion system – the same kind that bankrupted drivers and enriched lenders,” Uber spokesman Harry Hartfield wrote in an email. “Not only is the mayor’s policy hurting app drivers by forcing them to pay exorbitant fees to rent a car, but he has proposed nothing to fix the current medallion system that only benefits lenders and taxi insiders.”

The city refuted this notion on Wednesday, saying that, unlike medallions, for-hire vehicle licenses aren’t transferable. “There’s no secondary market for lenders to exploit them,” Deputy Mayor for Operations Laura Anglin said.

Tech industry group Tech:NYC also weighed in on the subject on Wednesday, decrying “overly-broad and quickly-authorized policies” that create unintended consequences. “Goals like outer borough accessibility and competition in the rideshare sector are impeded by arbitrary vehicle caps,” Tech:NYC executive director Julie Samuels said in a statement. “As a matter of process, it’s also worth noting that the TLC is supposed to issue a larger report on the existing regulations in December 2020. That time has not come.”

Eric Goldwyn, a research scholar in the NYU Urban Expansion program at the Marron Institute, said that while the city is well within its rights to regulate the ride-hail industry, it should be careful to enact smart regulations. Whether it’s ultimately determined that the TLC should allow more or fewer for-hire vehicles to operate in New York City, the decision to pause new licenses last August capped the existing for-hire vehicles at the arbitrary number of however many there were at that time, nearly 120,000. (Although the default setting wasn’t based on any study, the annual review of the cap would allow TLC to adjust the cap number as needed in the future.) “The initial cap, it wasn't very thoughtful,” Goldwyn said of the one-year pause on new for-hire vehicle licenses passed last August. “It was sort of like – pardon my French – but ‘shit's crazy, let's just take a pause and reflect.’ And there's no way that that pause was the right number of cars. So to then say, let's just stick with that, it's a little bit lazy.”

Last August was not the first time that de Blasio attempted to cap new for-hire vehicles. In 2015, he attempted a similar cap, but was beaten back by an aggressive lobbying campaign by Uber, and the legislation didn’t have the needed support in City Council. Asked whether he regrets not getting the cap done back in 2015, when the number of for-hire vehicles was closer to 63,000, de Blasio simultaneously chided the Council for not getting it done back then and praised them for doing it last year. “With the deepest respect to the City Council, I regret that they didn't vote for it in 2015, it was staring them in the face,” he said. “It is a complex issue. Let me be fair, I understand that there are many, many interests with many specific needs. But I think the Council back then made a mistake because we could've done a lot to help people, and people suffered because that cap was not in place.”

Goldwyn said the cap on cruising time may be a smart move, but that these policies tend to miss an important component. “The big issue, and you see this with a lot of city transport policies, is that it's not really clear what the goal is,” Goldwyn said. “Is it, ‘we want our Ubers and Lyfts and yellow taxis to only contribute this amount of greenhouse gas emissions?’ Is it, ‘we want travel speeds to be at this rate?’ There's never a sense of there's a goal that we're trying to achieve. It's sort of just like, things are chaotic, maybe this (policy) will make things less chaotic.”