TLC Proposes New License for App-Based Car Services

The New York City Taxi and Limousine Commission has decided the current cab-licensing system just isn’t hacking it.

Claiming the advent of e-hail car services has made it increasingly difficult to enforce its regulatory framework, the TLC has proposed a new license for companies like Uber and Lyft that use app-based dispatching systems, which, the commission says, will help ensure that no sector of the industry can circumvent the rules.

The new regulations would treat any car service consortium as a single entity—whether a collection of brick-and-mortar bases operating under a single public brand, or an app contracting with several such bases. This would give the commission authority to suspend or revoke licenses or otherwise penalize all affiliates when violations arise.

Currently, multiple bases operating under the same app or brand are not always treated as the same company. This past winter, for example, the city temporarily suspended five of Uber’s six bases when the company did not turn over requested trip data, yet Uber was allowed to shift its operations to the remaining base, which was not classified as a black car dispatcher as the others had been.

“Without licensure, there’s no way to ensure that app developers without a base license comply with the city’s rules,” said TLC spokesman Allan Fromberg in an email. “While making sure that all the necessary protections are in place, we’ve ensured that app developers have all the flexibility they need to encourage creative innovation, which is the strength of creating a framework that promotes market innovation."

Fromberg said the new license would also limit drivers to the use of one digital device (in addition to any equipment required by their base) and mandate additional price transparency for apps that have variable cost systems. Furthermore, all car services would be obligated to inform customers that complaints against drivers must be filed through the city's 311 system in order for disciplinary action to be considered.

Uber disputed the notion that such a license would give the company enough flexibility to operate successfully. The new rules, Uber claims, would give the TLC authority to approve app revisions, which could halt Uber's near-weekly stream of automatic updates. Uber also says the license would effectively bar its drivers from picking up passengers at LaGuardia Airport, because there is no for-hire vehicle parking lot there. And the plan to route all complaints through 311 is unnecessary, Uber claims, because the company already resolves 88 percent of consumer complaints within 24 hours. (TLC processes clams against for-hire drivers in an average of 58 days, according to the 2015 preliminary mayor’s management report.)

“Over the last four years Uber and companies like it have given drivers a new way to earn a better living, eliminated the age-old practice of discriminatory hailing and allowed New Yorkers to get a ride in every borough. Our city government has the opportunity to build on this progress, creating greater economic opportunity and better transportation services for all New Yorkers. Unfortunately, this first draft of the TLC rules does not support the progressive and diverse transportation environment that [New York City] riders and drivers clearly value,” said Uber spokesman Matt Wing in a statement.

Fromberg said the TLC will meet with Uber representatives on Tuesday to discuss any concerns about the proposed license.

Advocates for the yellow cab industry, however, had tentative praise for the plan.

“It attempts to bring apps under a regulatory fold that has been lacking for a long time. Even though it’s only been a couple of years since some of these apps have been available, in taxi years it’s been forever,” said Michael Woloz, an adviser for the Metropolitan Taxicab Board of Trade, who emphasized that he was not yet able to thoroughly review the TLC package. “What the yellow cab industry is faced with today is unfair competition.”

The TLC is slated to hold a public hearing on the proposal on May 28.