The black car, limousine, and livery segments of the New York City transportation industry were dealt a pretty serious blow in December 2012 when the NYC Taxicab and Limousine Commission (TLC) approved a one-year “pilot” program to test taxi smartphone apps.
Decades ago, rules were established by the TLC prohibiting taxis from accepting “pre-arranged” jobs and preventing black cars, limousines, and liveries from accepting “street hails.” Those rules were put in place because minority riders were being discriminated against, and people in the central business district of NYC were having tremendous difficulties “hailing” a ride if their destinations were one of the outer boroughs, or further away.
In a city with a transportation system as vast as NYC’s, these rules were effective and critical; they essentially gave birth to the black car industry, which has grown tremendously over the years—and taxicab medallion values have skyrocketed. A medallion fetches nearly $1 million at auction.
For some time now, riders have been using smartphone apps to hire black cars, limousines, and liveries, and will continue to do so—but when the pilot program goes into effect on February 15, 2013, taxis will be added to that list, allowing riders to pre-arrange taxi rides. Many fear that this will tear down the wall between street hails and pre-arrangement.
The big question: Why would a passenger care if the vehicle that he prearranges via a smartphone app is black rather than yellow, as long as the rate is comparable?“There will be a zero-sum gain for the riding public,” says John Acierno, president of the Executive Transportation Group. “The new rule will simply change the paradigm of the industry and jobs will flow out of one segment of the industry and into another in a one-way direction.”
Ira Goldstein, chief operating officer of the Black Car Assistance Corp. (BCAC), points out that the rules were created for a reason, and were not entered into lightly. During testimony to the TLC, Mr. Goldstein represented not only the BCAC, but also the Livery Roundtable, Livery Base Owners, Inc., Luxury Base Operators Association, Asian Base Operators Association, and the Greater New York Taxi Association.
The big question: Why would a passenger care if the vehicle that he prearranges via a smartphone app is black rather than yellow, as long as the rate is comparable? While rates may vary between the black car, limousine, and livery segments of the industry, there are plenty of companies that will get you there for about the same rate as a taxicab, and oftentimes less expensively.
Regardless, come February 15, the year-long pilot program will begin. The TLC has promised quarterly evaluations to assess the impact on TLC-regulated industries—but if officials deem it successful, “it could be extended or replaced by permanent rules.”
From the outside, one might think that initiating a pilot program shows that the TLC wants to proceed cautiously—but the fact is, TLC Chairman David Yassky only threw the “pilot program” idea into the ring in the 11th hour, when he realized that he wasn’t going to get enough votes from his fellow commissioners to pass permanent rules.
"…come February 15, the yearlong pilot program will begin."In the days leading up to the vote, several commissioners had expressed doubts about a vote to fully legalize “e-hail” apps, citing concerns that the new technology would hurt the health of the industry at large and destroy the separation that has been in place between street hails and pre-arranged rides.
Two commissioners abstained from the vote, citing a lack of information after the 11th hour change: Elias Arout and Nora Marino, a lawyer and TLC commissioner, who complained that the vote was “rushed” and warned of the consequences of adopting untested technology in New York.
“I’m all for technology,” Marino told Crain’s New York Business. “I just think that New York is a unique city with a unique transportation structure that’s not like other cities. A pilot program sounds great ... but like a marriage, a lot of things are easier to get into than out of.”
Under the pilot program, cab drivers can only pick up app jobs requested by passengers a half-mile away from them in Manhattan’s central business district, and a mile-and-a-half away in the outer boroughs. Payments will be made through the TLC’s existing T-PEP (Taxicab Passenger Enhancements Project) system.
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Neil Weiss is the editor/publisher of Black Car News. He can be reached at neil@blackcarnews.com.