Gotham Gazette https://www.gothamgazette.com/component/tags/tag/716 Mon, 18 Jan 2021 05:36:05 +0000 Joomla! - Open Source Content Management en-gb webmaster@gothamgazette.com (Webmaster) Coronavirus Crisis Presents Opportunity for the City to Finally Step Up for Struggling Taxi Drivers https://www.gothamgazette.com/130-opinion/9247-coronavirus-crisis-opportunity-new-york-city-help-struggling-taxi-drivers https://www.gothamgazette.com/130-opinion/9247-coronavirus-crisis-opportunity-new-york-city-help-struggling-taxi-drivers ready to fight demand yg

Taxi drivers push for help (photo: @NYTWA)


In the past month, the coronavirus pandemic has brought our world to a standstill, causing emotional and financial hardships for Americans around the country. As schools, restaurants, and retailers across New York shutter indefinitely, it is clear that no industry, or worker, will go unaffected. 

Among those hit hardest, however, will be New York’s over 21,000 yellow and green taxi drivers, who have already been struggling to survive in the wake of the financial ruin of the medallion debt crisis.

Just weeks into unprecedented travel restrictions, event cancellations, and shelter-in-place policies, taxi workers are already feeling the crushing weight of lost business worse than most. Recent reports describe drivers searching for hours without being able to pick up a single fare, to say nothing of the heightened risk they face of catching the virus if they are even lucky enough to get a few fares during a shift.

For New York’s taxi drivers, the coronavirus pandemic has exponentially exacerbated the financial problems they faced before the outbreak, with no end in sight. As the coronavirus outbreak worsens, however, it doesn’t need to be so devastating for taxi drivers. In fact, it could be what finally brings about needed, lasting change to the industry. 

As has come to light in recent years, the value of taxi medallions was recklessly and artificially raised by powerful industry insiders and city government for nearly a decade. The resulting bubble was frighteningly identical to the housing market crash that set off the Great Recession in 2008, trapping thousands of low- to middle-income owner-drivers, many of them immigrants, into sub-prime loans. Only instead of losing their homes, taxi workers lost their businesses and livelihoods.

Both city government and the lending industry share blame for where the taxi industry is today. While the city’s Taxi and Limousine Commission made over $800 million off medallion sales between 2004 and 2014 alone, it is the predatory lenders who nefariously created unfavorable contracts with paralyzing interest rates and conditions. The predictable result was countless taxi owner-drivers saddled with hundreds of thousands of dollars in debt on an investment they were falsely promised could never fail.

Now it is time to act.

While New York rolls out programs to support small business owners and gig workers alike during this unprecedented public health and economic crisis, the city cannot and must not again fail the taxi drivers it failed to protect once before. Mayor de Blasio has already announced his administration will offer zero interest loans to small businesses that have experienced a loss of revenue because of the coronavirus fallout. A similar program should be created for taxi drivers, whose medallion-licensed taxis are themselves small businesses. It’s encouraging that a new temporary program will give TLC licensed drivers jobs delivering food to senior citizens who can't leave home during the shelter-in-place order.

But these programs are simply stopgaps that will make conditions for taxi workers more tolerable during this crisis. What taxi workers truly need is a path away from the debt that weighs them down and towards a more sustainable, financially sound future. 

Just weeks before the coronavirus outbreak began, a City Council-created commission produced a report outlining how the City could steer the city’s taxi owner-drivers out of their debt struggles and into a successful future. Core to the proposal was leveraging public-private partnerships in which mission-driven firms such as ours work with taxi drivers to provide the necessary structural and technological changes they need to be competitive with the likes of Uber and Lyft. 

Though it should have been done years ago, the city must now heed the call to action by Bhairavi Desai and the Taxi Workers Alliance to cancel all medallion owner debt over $150,000, while also guaranteeing them paid sick leave. 

While coronavirus has exposed just how vulnerable New York’s taxi drivers are, the city is now facing the perfect moment to take bold action that could help so many hard-working drivers, including many immigrants, and save the yellow taxi industry that is deeply embedded in the fabric of our city. Taking action on the commission’s plan immediately is the only way to truly answer the calls of the Taxi Workers Alliance and their members, and the timing could not be more prudent. 

New York left these drivers behind once before. It’s well past time for our city to not only give them a fighting chance to survive this pandemic, but an opportunity to rebuild their business so they can thrive for decades to come.

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Zahid Biviji and Mihir Dange are the Co-Founders of Wapanda, a mission-driven transportation infrastructure technology platform. On Twitter @Wapandaco.

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Coronavirus Crisis Presents Opportunity for the City to Finally Step Up for Struggling Taxi Drivers Fri, 27 Mar 2020 04:00:00 +0000
Attorney General Disrupts Progress on Taxi Loan Crisis https://www.gothamgazette.com/130-opinion/9171-attorney-general-james-disrupts-progress-city-taxi-loan-crisis https://www.gothamgazette.com/130-opinion/9171-attorney-general-james-disrupts-progress-city-taxi-loan-crisis ydanis rod ste levin rec

Taxi driver-owners protest at City Hall (photo: John McCarten/City Council)


Last May I wrote a column criticizing the practice of including taxi medallion sales revenue in the city’s operating budget and pointed out the perverse incentive it creates to encourage high sales prices. My comments were triggered by the publication of a compelling investigative series on the New York City taxi medallion market in the New York Times.

The series provoked outrage from elected officials, several of whom launched investigations and studies of their own. The City Council appointed a task force, which recently came up with thoughtful recommendations; but the state’s attorney general has thrown a wrench into efforts to responsibly help needy taxi medallion owners by threatening to sue the city to give all their money back to everyone who bought medallions during the ten-year period when prices rose and then fell so dramatically.

It is heartbreaking to hear the stories of taxi drivers, many of them immigrants, who thought that ownership of a taxi medallion was a ticket to the American dream, only to see their value plummet as an onslaught of ride-hailing vehicles flooded city streets. But the challenge is how to help these driver-owners in a way that is appropriate and fiscally responsible.

In the early 2000s when the city’s economy was doing well and the ceiling on the number of medallions made them a scarce resource, it made sense that they were extremely valuable. Yes, the New York City Taxi and Limousine Commission (and city’s budget office, which counted on medallion sales revenue to help balance the budget) encouraged -- or at best, did not try to mitigate – the rapid growth in medallion prices from 2004-2014, but market conditions were the primary cause.

In retrospect it looks crazy that prices rose as high as they did, but no one wanted to cast a skeptical eye (except Citizens Budget Commission and other fiscal monitors, of course) on a business that could empower hard-working people to prosper. No one anticipated the rapid and dramatic creation and growth of Uber, Lyft, and other ride-hailing services that have overwhelmed city streets with cars and left taxi drivers scrambling for passengers and income.

After the Times series the City Council created a Taxi Medallion Task Force that issued its report last month, recommending that the city form an entity to purchase outstanding medallion loans at discounted prices and work with borrowers to pay them back over time. The report recognizes that it is not feasible for the city itself to fully buy the loans, although it states that costly city-sponsored loan insurance might be necessary to make the fund viable. What is proposed is a kind of public-private partnership in which “mission-driven” entities such as socially responsible investors and philanthropies contribute to a pool of funds. While Mayor de Blasio has not endorsed this specific recommendation he has said this is the best solution he has heard to the problem so far. 

However, before there has been any time for this approach to be refined and pursued, along comes New York Attorney General Letitia James with a plan that would be more straightforward and far more costly to execute: sue the city and make it pay back all the $800 million-plus  it has collected for medallion sales since 2004. A notice has been filed with the City Comptroller giving the city 30 days to resolve the claim before a lawsuit is filed.

The threat of this litigation casts a pall over other attempts to help underwater taxi medallion owners by getting their lenders to accept discounted amounts. Why would anyone agree to take less money when there is now the prospect that the city will pay the full amount borrowed? Why would financial institutions and other lenders participate in the City Council’s plan to create a fund for this purpose if the need is obviated by the AG’s lawsuit?

While AG James is undoubtedly trying to help struggling individual driver-owners, it is primarily professional industry lenders and fleet owners who would benefit from her claim. And it would unfairly hold New York City government responsible for a problem that has multiple layers and causes. 

Most important, the AG’s litigation would set an extremely dangerous and expensive precedent that taxpayer dollars can and should be used to bail out an entire line of business that has hit hard times. (It is unclear how the lawsuit would impact negotiations to reduce the amount due on several thousand medallion loans just purchased from the National Credit Union Administration by a hedge fund, Marblegate Capital.)

Can the city be expected to pay off the loans of restaurateurs who must close because of new minimum wage and other regulatory requirements? What about the mortgages of homeowners who may face more difficulty paying them off if and when property tax reforms are adopted? By the way, when the Attorney General was a City Council member she voted to approve the budgets that included the revenue from medallion sales; does that make her culpable too?

The city has no choice but to resist the AG’s attempt to be the taxi industry hero at everyone else’s expense and the City Council should join the mayor in denouncing the lawsuit.

Meanwhile, even if the city successfully facilitates a loan fund, still left unresolved is how to keep medallions financially viable over the long-term. What is needed is a coherent plan of reforms and new policies to make the system of taxis and for-hire vehicles in New York City functional going forward.

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Carol Kellermann was president of Citizens Budget Commission from 2008 through 2018.

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Attorney General Disrupts Progress on Taxi Loan Crisis Thu, 27 Feb 2020 05:00:00 +0000
City Officials Debate What To Do About Taxi Medallion Debt Crisis https://www.gothamgazette.com/city/8695-city-officials-debate-what-to-do-about-taxi-medallion-debt-crisis https://www.gothamgazette.com/city/8695-city-officials-debate-what-to-do-about-taxi-medallion-debt-crisis taxi medallion drivers rally city hall

Council Members Levine & Rivera & drivers rally at City Hall (photo: Jeff Reed)


City Council Speaker Corey Johnson asked what sounded like a simple question: should the Taxi & Limousine Commission apologize for its role in the taxi medallion debt crisis, in which thousands of taxi owner-drivers have been trapped in predatory loans unchecked by city and state watchdogs?

Jeffrey Roth, nominated by Mayor Bill de Blasio to lead the TLC, failed to give a direct “yes” or “no.” Johnson asked again, to which Roth said, “whether or not the TLC leadership there should apologize, I don’t know.” Visibly frustrated, Johnson moved on to a new question.

The exchange took place at a July 18 hearing to discuss Roth’s nomination for TLC Commissioner – a nomination that has since been temporarily withdrawn in part due to Roth’s performance at the hearing.

Roth’s evasiveness on the apology questions and others, and Johnson’s resulting exasperation highlighted a growing debate over the culpability of city government in facilitating the medallion crisis. As a New York Times two-part investigation published in May revealed, the TLC ignored warning signs of a highly inflated medallion market (the city sells taxi medallions and sets baseline prices for auction) and risky lending practices, leaving many medallion owner stranded in colossal debt when the market collapsed. A wave of suicides among driver-owners, along with the Times' series, has elevated the discussion to emergency status.

But, as policymakers, drivers, and others have been asking, should the city itself be responsible for forgiving the debt? What is the best path for helping driver-owners get out from under their loans?

For the Taxi Workers Alliance, the most prominent organization representing for-hire vehicle drivers, the answer is a resounding yes: New York City government should prepare a bailout. But Mayor de Blasio has repeatedly said a bailout would be both out of the city's purview and too costly to the city's budget. On the other hand, several City Council Members, including Speaker Johnson, have expressed some initial support for the idea of a partial bailout of driver-owners.

Bhairavi Desai, the head of the union since its inception in 1998, has called for a city-run program to determine the current market value of medallions, then buying out and forgiving loans down to that value. At the height of the market in 2014, medallions were going for more than $1 million, compared to a $200,000 price tag a decade earlier.

The TWA has calculated that, based on a current medallion market value of $150,000 and an average owner-driver debt of $600,000, the program would cost between $1.6 and $2.4 billion – an increase from the $1 billion the TWA estimates that the city made from inflated prices at medallion auctions.

City Council Member Mark Levine, who represents Upper Manhattan and has long been one of the TWA’s strongest allies in government, claimed at a July 11 rally outside City Hall that a clear precedent for a city-run bailout exists.

“During the housing mortgage bubble, an entity here called the Center for New York City Neighborhoods did exactly that for New Yorkers with underwater housing mortgages,” he said alongside Desai and dozens of assembled owner-drivers. “The fact is, there is a myriad of precedents for this here in New York City, and it’s simply inexcusable to say this isn’t possible when we have done projects like this in the past.”

Levine is not alone in his support for the TWA’s proposal. Council Member Carlina Rivera of Lower Manhattan appeared at the same rally to call for loan forgiveness; City Comptroller Scott Stringer and Council Member Ritchie Torres, among others, have also expressed some measure of support for city-financed debt relief. Because bailout legislation has yet to be introduced to the City Council, it is difficult to gauge how broad the proposal’s support is.

Desai and the TWA have also called for a cap on medallion mortgage payments at $900 per month (compared to an average of $3,000 a month currently) and the creation of a retirement fund for drivers, among other things. But with chants of “Loan forgiveness now!” and pre-printed signs calling for “Debt Forgiveness NOW!” at the July 11 rally, owner-drivers have made their first priority clear.

On the other hand, de Blasio, as well as officials in the TLC, have expressed skepticism about, even dismissal of such an idea. Their preferred plan of action is for the city to instead pressure the private banking lenders to downsize loans, without the city itself directly buying or bailing out anything.

De Blasio, in a June interview on WNYC’s The Brian Lehrer Show, said that he would “absolutely pressure banks and lenders to be fair to these drivers, we’ll do that.” But he rejected the possibility of a city bailout, saying the city “doesn’t directly fund the drivers…There’s some things the City of New York simply has limits on.” He has indicated on multiple occasions that the city simply doesn’t have the billions of dollars that would be needed for a bailout, that it would be too costly of a one-time expense.

Meera Joshi, formerly the commissioner of the TLC, listed in an email to Gotham Gazette several proposals to address the crisis, all of which involve the city leaning on banks to modify loans so that they match drivers’ income. “State and city officials should publicly name those that refuse to work with borrowers,” she suggested, “much like the 100 worst landlords list. Publicity about their inflexibility will go a long way in making a change, and will achieve change quickly.”

Two other possibilities Joshi mentioned involve conditioning medallion ownership on viable financing, thus causing “banks that do not modify loans within a prescribed period [to] lose the medallion as an asset,” and “chang[ing] state tax law to ensure that forgiven loans are not considered taxable income for individuals below a certain income level.”

When asked directly about the possibility of direct loan forgiveness by the city, Joshi stated that she supports “all real assistance, but prioritizes what can realistically happen, affects the largest group, and most of all happens quickly, which is pressuring banks to restructure loans.”

Current Acting TLC Commissioner Bill Heinzen, during a June 24 City Council oversight hearing on the crisis, expanded on this assessment, saying that “the people who have the power and money here are the banks and the credit unions that hold those loans, and they should be the ones who should be forced to write down those loans to something that is human and possible to pay.”

And Roth, responding to pointed questioning from Johnson, said that he thinks “there are measures short of financial bailout...that might be sufficient and not excessive.”

Writing in a City & State op-ed column the day after the July 11 rally, Nicole Gelinas argued that the roughly $2 billion required for a bailout of many owner-drivers would make a significant, arguably unfair dent in the city’s budget. “The city must follow only public need,” she wrote, “not the extraordinary circumstances of one industry.” Others, including Roth, have pointed out that a city-financed bailout might inadvertently reward lenders for their predatory behavior.

While she echoed some of the other ideas that have been offered for alleviating the crisis, another of Gelinas’ proposed fixes involves city- and state-level regulation, without either funding a bailout. “The city,” she wrote, “should make it much clearer whether it is giving up on the medallion system or not, guiding both lenders and borrowers on underlying value, and allowing lenders to keep an interest in the future, possibly higher value of a medallion in exchange for debt relief.”

For their part, the TWA and its Council allies have also called on the city to lean on lenders to forgive debt and ease burdens on owner-drivers. Levine noted that, if the city can successfully push lenders to downsize loans, then the pricetag the city pays for a bailout decreases and becomes more politically feasible.

But some who support a city forgiveness program worry that the focus on outside forces like credit unions makes concrete solutions harder. Council Member Brad Lander, at the June 24 oversight hearing, said he worries “that if we only focus on accountability, we will fail to come up with a real approach to relief...We must find a way to do both.”

A spokesperson for the City Council said in a brief Thursday statement to Gotham Gazette that “Speaker Johnson and the council are committed to helping drivers, and the newly appointed task force is exploring a variety of ways to help including various forms of a bailout.”

Appearing on Thursday evening’s Inside City Hall on NY1, Johnson was asked by host Errol Louis about what he thinks should be done for the medallion owners. “I think the mayor is right in one aspect,” Johnson said after disagreeing with the mayor’s claim that if a cap on new for-hire vehicle licenses had been instituted in 2015 much would have been different, while also reiterating his regret for not supporting the cap back then, “which is $17 billion for a full bailout is not realistic, and it would be inappropriate and disingenuous for me to say that’s what we can do. But there has been a proposal -- Council Members Levin and Levine and Lander have been talking about doing a partial bailout for some of the medallion owners who are under water, maybe at $100,000 or $200,000, to get them out of debt in a way where they’re not as under water. It’s something we need to look at.”

Underlying the debate over debt forgiveness is a deeper question over who, exactly, bears the blame for the crisis to begin with. Mayor de Blasio has called the crisis a “private market reality,” and the TLC released an investigation it conducted laying the responsibility on lenders and the National Credit Union Association while insisting that “TLC and the City have no regulatory oversight or control over lending practices.”

Additionally, Roth, Heinzen, and Joshi – the prospective, current, and former TLC commissioners, respectively – all pointed to the specific ways in which the TLC worked to mitigate the crisis, including loosening restrictions and reducing taxes on drivers. The cap on vehicle hailing apps such as Uber and Lyft has also been highlighted as a measure that the city took to help owner-drivers (de Blasio has repeatedly said he wishes the City Council had gone along with his 2015 push for a FHV cap, rather than stalling for several more years until its passage in 2018). 

For many, however, these measures were too little and too late. Though the city was not directly responsible for reckless lending practices that may have helped thrust owner-drivers into severe debt, Levine and others claim it still has a “moral debt” to pay for its lack of oversight. Levine charged that “the city itself was asleep as thousands of drivers entered into a world of financial hell.” 

Council Member Torres, who co-chaired the oversight hearing with Council Member Ydanis Rodriguez, said that the TLC “is inclined to scapegoat everyone except itself.”

The TLC, as many debt-relief proponents have pointed out, was not just a regulator asleep at the wheel. Faced with a $3.8 billion budget deficit early in his administration, Mayor Michael Bloomberg and his TLC commissioner, Matthew Daus, advertised the medallion market as a stable, “once-in-a-lifetime” opportunity in order to increase city revenue. In 2011, Andrew Murstein, the former president of a prominent medallion lender, called the city his “partner,” because “they want to see prices go as high as possible.”

Debt relief, either from the city or from lenders, is not the only measure being discussed to address the medallion crisis. At the June 24 oversight hearing, four bills were proposed that would increase accountability at the TLC, with the goal of preventing future crises.

Additionally, Council Member Rodriguez, who chairs the Transportation Committee, has proposed a bill that would exempt taxi drivers from congestion pricing. The TWA held a rally on July 18 demanding that the cap on for-hire vehicles be extended, which would continue to restrain competition to the taxi industry. And, as Roth mentioned in the July 18 committee hearing, the TLC plans to set up a driver assistance unit to provide drivers with financial and mental health services.

But, as these legislative proposals’ backers have attested to, such fixes are not enough to help those already in massive debt. Regardless of who bears the blame for the crisis and who needs to pay for it, thousands of drivers remain in dire straits. “This may have taken years in the making; it cannot take years more in the fixing,” said Desai at the July 11 rally.

“Otherwise," she said, "thousands of families are going to simply break.”

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by Joey Fox, Gotham Gazette

Read more by this writer.

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City Officials Debate What To Do About Taxi Medallion Debt Crisis Thu, 25 Jul 2019 04:00:00 +0000
Paying New York City’s Debt to Taxi Drivers https://www.gothamgazette.com/130-opinion/8652-paying-new-york-city-s-debt-to-taxi-drivers https://www.gothamgazette.com/130-opinion/8652-paying-new-york-city-s-debt-to-taxi-drivers car service taxi

(photo: @NYTWA)


When financial bubbles burst, it’s almost always regular people whose lives are ruined. The fraudsters and scammers often avoid serious consequences. So it was with America’s mortgage crisis in 2008. And so it has been with New York City’s own home-grown mortgage meltdown: the collapse of yellow taxi medallion values since 2014, which has had a devastating impact on the lives of thousands of yellow taxi drivers.

New York City only allows a fixed number of the iconic yellow taxis on its streets--creating over the decades a consistent, recession-proof source of income for drivers. The medallion that taxis are required to affix to their hoods was an asset that commanded a steady, solid price. For countless immigrants, owning a medallion meant that the grueling work of a taxi driver could offer a path to the middle class.

Then in the early 2000s medallion prices began rising from their historically stable value of about $200,000, to a dizzying peak of over $1 million by 2014.

The medallion bubble was pumped up in part by the same forces that caused the housing mortgage crisis. Industry lenders and brokers exploited vulnerable borrowers. And thousands of owner-drivers ended up with monthly mortgage payments of as much as $4,500, an oppressive sum for workers whose earnings from fares and tips, after expenses, may only amount to $5,000 per month.

Then, in 2014, the bottom fell out. The value of medallions plummeted in the past five years, losing 80 percent off their peak. Drivers and their families who invested their life savings to purchase this asset now face financial ruin. For some the pressure has been unbearable. At least three yellow taxi drivers burdened by debt have taken their own lives.

There is no shortage of parties to blame for this debacle: overly aggressive lenders, lax financial regulators, shady loan brokers.

And then there’s New York City government -- which directly contributed to this crisis.

In 2004 the City began auctioning off new medallions to plug budget gaps. This gave the very people overseeing the industry an interest in pumping up valuations. And that’s exactly what they did.

Ads run by the City called the investments “better than the stock market,” implying medallion values would continue to rise. The City agency that regulates the taxi industry failed to act in the midst of glaring signs of financially questionable transactions and price collusion among major players. 

And the City didn’t just pump up the bubble, it also inadvertently expedited its bursting, by failing to manage the explosive growth of Uber and Lyft, which flooded the streets with upwards of 80,000 new vehicles, and used their rich valuations to undercut the regulated taxi fares.

Along the way, the City made hundreds of millions of dollars in sales at medallion auctions, including a round as late as 2014 when it set the minimum medallion bid price at a staggering $850,000, despite the fact that it was already clear by then that these assets were poised to decline.

The City profited handsomely from the medallion bubble. Now we owe a moral debt to the thousands of New Yorkers whose lives have been ruined.

The City needs to consider dramatic plans for securing loan forgiveness for owner-drivers, so that medallion mortgage payments are capped at reasonable levels -- and no driver is ever again forced to live on $500 per month after expenses.

We need to create a retirement fund for drivers as well, so those struggling with medallion payments no longer need to keep driving into their 60s, 70s, and even 80s just to make payments. The hard-working drivers who have kept our city moving for decades deserve to be able to retire with dignity.

And we should do something impactful now that would help bring immediate relief: hire an attorney for each and every one of the driver-owners with underwater mortgages.

At present the vast majority of drivers going through foreclosure proceedings are doing so without representation by an attorney, putting them at a severe disadvantage. Likewise, most have no attorney to support them in the complicated process of mortgage renegotiation. The New York Taxi Workers Alliance has provided legal support to hundreds -- but there are thousands more still in need of help. We need a robust investment by the City to close this gap. Any cost for a legal assistance program will be miniscule relative to the $850 million windfall the City reaped from the sale of medallions during the bubble years.

Lenders will have to be pressured to sit down in good faith with drivers and their representatives. The City should not be afraid to publicly call out any banks, credit unions, and hedge funds that refuse to adjust loan terms. As was the case in the housing mortgage scandal, lenders are not immune to public shaming. Statements from federal and state regulators voicing support for renegotiation of the loans would also be extremely helpful.

One thing is clear: the City helped create the medallion crisis, and we have an obligation to help fix it.

We cannot undo the damage done to thousands of lives -- some of which have already been lost -- by this scandal. But we as a city can at least do everything in our power to ensure that, for once, regular people are not abandoned while the wealthy and powerful skate away unscathed.

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City Council Member Mark Levine represents parts of Manhattan and Bhairavi Desai is the President of the New York Taxi Workers Alliance. On Twitter @MarkLevineNYC & @NYTWA.

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Paying New York City’s Debt to Taxi Drivers Mon, 01 Jul 2019 04:00:00 +0000
Council to Examine City’s Role in ‘Taxi Medallion Crisis’ https://www.gothamgazette.com/city/8621-council-to-examine-city-s-role-in-taxi-medallion-crisis https://www.gothamgazette.com/city/8621-council-to-examine-city-s-role-in-taxi-medallion-crisis bloomberg gillibrand nadler yassky fed

(photo Credit: Edward Reed/City Council)


Amid a new flurry of attention to challenges faced by taxi drivers in New York City, the City Council will hold an oversight hearing Monday on the city’s Taxi and Limousine Commission’s “role in the taxi medallion crisis.”

As a New York Times two-part investigation published in May helped bring back into extensive public conversation, taxi medallion prices rose to extreme heights between 2002 and 2014 – as high as $1.3 million – before crashing down amid a boom in the launch of the app-based for-hire vehicle sector. Thousands of medallion owners are in immense debt with their medallions, which allow them to operate a city-sanctioned yellow taxi, worth far less than at point of purchase, when they bought them from the city through loans provided by private banks.

Reporting prior to the Times’ exposé had already documented the mounting debt crisis for medallion owners, connecting it largely to the rise of ride-hailing apps such as Uber and Lyft. All of the city’s 13,587 taxi medallions took significant hits in value, both those owned by individual drivers themselves and those constituting larger taxi fleets. The City Council passed and Mayor Bill de Blasio signed a cap on new for-hire vehicle licenses and new wage guarantees for drivers amid a series of driver suicides in 2018, tragedies that pushed the medallion crisis into public view.

Now, the Times’ investigation has caused a new flurry of legislation after it showed how the Taxi and Limousine Commission (TLC) was instrumental in the extraordinary inflation of medallion prices. Though the TLC was not directly involved in the reckless lending practices that led to the taxi drivers’ debt, it stood to benefit from skyrocketing prices at medallion auctions and chose to ignore signs that the market was highly unstable. The TLC is charged with regulating the taxi industry, and the Mayor oversees it and the city budget, which has included and relied on revenue from medallion sales.

While much of the Times’ reporting focused on other culprits, including predatory lenders and the National Credit Union Association, medallion owners and their representatives have laid a lot of blame on city government.

Sergio Cabrera and Carolyn Protz, two medallion owners, wrote in a scathing Crain’s New York Business op-ed that “the real scandal...is how the Taxi and Limousine Commission, as well as elected officials, played a pivotal role in taxis’ demise.”

Bhairavi Desai, executive director of the New York Taxi Workers Alliance, similarly charged that “the city raked in profit while working-class immigrant drivers of color were swindled and pushed into financial despair.”

Many elected officials agree. In an interview with City & State, City Council Member Mark Levine stated that “the city itself also bears responsibility for this, because we were selling medallions with the goal of bringing in revenue to the city and we were promoting them and pumping them up in ways that I think masks the true risks that drivers were taking on.”

The hearing on Monday, which will be jointly held by the Committee on Transportation and the Committee on Oversight and Investigations, will likely feature significant grilling and criticism of the TLC, as well as testimony from non-governmental parties, like medallion owners, pointing the finger at city government. On its website, the Taxi Workers Alliance has already promised to “pack the hearing room.”

Council Member Ritchie Torres, who will be leading the hearing as chair of the Oversight and Investigations Committee, said in a phone interview with Gotham Gazette that “the purpose of the hearing is to examine TLC’s role in creating a speculative bubble in the medallion market, and to identify the regulatory failures, the policy failures, that led to the collapse of the medallion market and the resulting humanitarian crisis.”

“There’s a sense in which TLC was functioning both as a market regulator and a market purchaser, and there is a conflict of interest between those two parts,” Torres said, echoing concerns outlined in the Times articles.

Although his committee began an investigation into the commission in November of 2018, “TLC has [since] been insufficiently cooperative with the City Council,” and the hearing is intended as a continuation of this inquiry. Despite the TLC’s stonewalling, Torres did disclose that the investigation has been productive, saying “there’s more evidence that the City is culpable than even the New York Times exposé suggests.”

In addition to the oversight portion of the hearing, which will begin at 10 a.m. Monday, four new bills aimed at mitigating the crisis will be introduced and discussed.

The first, from Council Member Ydanis Rodriguez, chair of the Transportation Committee, would require the TLC to “evaluate the character and integrity” of medallion brokers. Another, from Torres, would create a department within the TLC to evaluate the financial stability of the industry. This could theoretically prevent another bubble from forming based on false assertions of taxi market infallibility.

A third bill, sponsored by Council Member Adrienne Adams, would require the TLC to collect annual financial disclosures from individuals with interest in a taxi license. Finally, Council Member Francisco Moya is introducing a bill to prohibit the sale or transfer of a taxi license unless the funds used have been reviewed by the TLC.

These four bills are far from the only ones being drafted and discussed. On May 21, Rodriguez and fellow Council Member Fernando Cabrera proposed an exemption for taxi drivers from congestion pricing to lower their costs, saying that legislators had a “moral obligation” to do so.

Rodriguez also recently saw the City Council pass his bill to reduce the commercial motor vehicle tax on medallion owners from $1000 to $400. In a statement, he pledged to continue “to find ways to ensure that Taxi Medallion owners receive the justice they deserve.”

Meanwhile, in the state legislature, State Senators Jessica Ramos and Leroy Comrie have proposed a bill that would establish a taxi medallion guaranty program to help medallion owners who are unable to pay off their loans.

For some activists and lawmakers, these proposed changes don’t go far enough. Levine, writing in the Bronx Free Press, proposed “dramatic plans” to buy back medallions and forgive taxi drivers’ debt to augment smaller changes such as waiving fees and establishing task forces; City Comptroller Scott Stringer has expressed support for a similar solution.

The Taxi Workers Alliance, one day after the Times article was published, proposed a slightly less drastic plan. It would create a Council-appointed task force to determine the proper current value of taxi medallions, and any loan amounts exceeding that value would be forgiven (the specifics of how the loans would be forgiven have not been made clear).

Unlike Levine’s proposal, this would still likely leave many drivers hundreds of thousands of dollars in debt. And as transportation expert Bruce Schaller pointed out to City & State, many medallion owners have already spent hundreds of thousands of dollars to pay off their loans, money that a debt forgiveness program would not help them reclaim.

Any debt forgiveness bill may also face a difficult path under the de Blasio administration. Though the mayor has embraced investigations of lenders and higher wages for drivers, he dismissed the possibility of bailouts in an interview with Brian Lehrer, calling the crisis a “private market reality” that the city is not culpable for, mostly side-stepping city government’s role in selling such inflated medallions and TLC’s lack of oversight. De Blasio did acknowledge that the city allowed something of a bubble to develop, but cited his administration’s efforts to stop selling medallions and to cap app-based for-hire vehicles (a 2015 push by de Blasio to cap FHVs failed, only to be achieved three years later).

The June 24 Council hearing comes at a time of upheaval at the TLC. On June 18, de Blasio announced that Department of Veterans’ Services official Jeffrey Roth will become the new TLC commissioner. He replaces Meera Joshi, who departed the agency in March.

Joshi, for her part, was concerned that direct bailouts would benefit banks too much and drivers too little. Her preferred solution instead was to encourage banks to take a loss and downsize the loans. That way, the banks could “at least have a good live loan at the right price, [rather] than have someone who’s out of work and the bank with a loss.” Roth, who will need to be approved by the City Council before he becomes commissioner, does not yet have a stated position on the issue.

Though relief for medallion owners is likely still a long way off regardless of policy direction, Council Member Torres hopes that the upcoming hearing can begin the process of recovery. “My overall message is this: the city has been part of the problem, and it’s time to make the city part of the solution.”

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by Joey Fox, Gotham Gazette

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Council to Examine City’s Role in ‘Taxi Medallion Crisis’ Thu, 20 Jun 2019 04:00:00 +0000
Taxi Medallion Exposé Drives Home Key Budget Lesson https://www.gothamgazette.com/130-opinion/8556-taxi-medallion-expose-brings-home-key-budget-lesson https://www.gothamgazette.com/130-opinion/8556-taxi-medallion-expose-brings-home-key-budget-lesson medallions oped

(Photo: Ed Reed/City Council)


Last week, the New York Times published another blockbuster investigative series by reporter Brian Rosenthal, this time on the misleading and predatory practices which led to inflated prices of New York City yellow taxi medallions over the last decade.

The compelling stories of taxi drivers who thought they were buying into the American dream by purchasing taxi medallions, only to find their incomes drastically reduced by the competition of Uber and Lyft, has been a topic of public discussion for some time, but Rosenthal’s reporting provides new and detailed documentation of how lenders and brokers drove up the prices and encouraged purchases without concern as to whether the buyers had the wherewithal to repay their loans.

The story is reminiscent of the over-leveraged home buying encouraged and condoned by financial services firms and banks that contributed to the national housing bubble and the recession in 2008.   

In his second article on the taxi industry, Rosenthal focused on the regulatory agencies that seemingly should have known something was wrong when medallion prices skyrocketed but did nothing to intervene. Indeed, the New York City Taxi and Limousine Commission even ran ads promoting medallion sales as a great investment. State and city officials are now investigating; legislators are looking at ways to aid struggling medallion owners.

The situation of many taxi drivers and their families (especially those who have died by suicide) is unspeakably sad and it is understandable that elected leaders want to help them. But the rise and fall of taxi medallion prices also contains a larger message and lesson for government about the dangers and unintended consequences of relying on one-time revenues to fund government expenses.

Fiscal watchdogs warn against reliance on “one-shots” because they artificially inflate the amount of revenue available and will have to be replaced by other resources over the long term. That is why organizations like Citizens Budget Commission (CBC) urge that one-time windfalls be used to pay down debt or bolster reserves, not to start new programs or pay for employee salaries and benefits.

CBC has repeatedly criticized the city for including large amounts of anticipated taxi medallion sales revenue in its financial plans since it began doing so in 2011:

“Balancing the budget with these one-shots does not address the structural problems– notably, escalating health insurance and debt service costs—but masks the problem temporarily and delays the discourse needed to adopt more enduring, if politically tougher, solutions. In addition, one-shots can be unreliable; if something does not work as anticipated, the savings will not materialize.”

The same concern holds true for one-shots at the state level. New York state government has received over $11 billion in one-time revenue from settlements of litigation with financial institutions over the past five years. This funding has been used for a variety of initiatives, from infusions into economic development schemes like the “Buffalo Billion” to front end development and construction costs of the Mario M. Cuomo Bridge. Regardless of the merits of these projects, it would have been more prudent and appropriate to use these one-time revenues to reduce the state’s indebtedness and/or increase its rainy day reserves to be better prepared for the inevitable time when there is an economic downturn.

And Rosenthal’s investigation highlights another reason for avoiding reliance on one-shots: not only do they obscure the city’s true fiscal picture but they can create pressure on officials – albeit sometimes unintentional or even unconscious – to maximize resources to fill a budgetary need.

The city has repeatedly included as much as $1.5 billion in taxi medallion sales revenue in its four-year financial plans. This is a great deal of revenue and suggestions that it might be achieved through unfair means would probably not have been favorably received by budget directors happy to have this revenue in their projections to reduce out-year deficits. No one was motivated to look a gift horse in the mouth.

The state and city comptrollers have joined CBC in criticizing the city’s reliance on medallion sales receipts and the amount expected has been reduced and stretched out over longer lengths of time as the market changed and then tanked, and was completely removed from the mayor’s executive budget starting in fiscal year 2019 and since.

It would be a great irony if, instead of leading to more than a billion in revenue, the taxi medallion market’s problems lead to significant city spending to purchase owners’ loans or bail them out in some other way, as some legislators are contemplating. The lesson is that when a sudden and untested revenue source appears, don’t count on it because it may well be too good to be true.

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Carol Kellermann was president of Citizens Budget Commission from 2008 through 2018.

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

 

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Taxi Medallion Exposé Drives Home Key Budget Lesson Tue, 28 May 2019 04:00:00 +0000
Former City Taxi Commissioner on Regulating the App Companies and Saving the Yellows https://www.gothamgazette.com/city/8521-former-city-taxi-commissioner-on-regulating-the-app-companies-and-saving-the-yellows https://www.gothamgazette.com/city/8521-former-city-taxi-commissioner-on-regulating-the-app-companies-and-saving-the-yellows Meera Joshi taxis

Meera Joshi, right, at a rally (photo: Benjamin Kanter/Mayor's Office)


Meera Joshi’s five-year tenure as the head of the New York City Taxi and Limousine Commission coincided with a tumultuous time for the industry she was tasked with overseeing and regulating. Joshi, who left the de Blasio administration in March, joined the What’s The [Data] Point? podcast from Citizens Budget Commission and Gotham Gazette to discuss her tenure, the taxi industry and key steps she spearheaded to regulate it, and what’s next for app-based for-hire vehicle companies like Uber and Lyft.

The introduction and explosion of those ride-hailing apps has shaken the overall for-hire vehicle industry, disrupting the traditional taxi sector in New York City and beyond, and creating new challenges in terms of street congestion, driver working conditions, and more. In two years, the number of for-hire vehicles in New York City grew 59% and they now outnumber yellow and green taxi cabs my many thousands, having surpassed taxis in 2017, according to TLC data. As of last year, there weree 13,587 licensed yellow cabs in the city, along with 3,570 green cabs, and 107,435 app-based for-hire vehicles.

At the same time, the value of taxi cab medallions has depreciated from a peak over $1 million to $175,000, leading to financial hardship and even suicide, and questions about a government bailout.

On the podcast, Joshi discussed the challenges of regulating an emerging business model while also attending to the decline of another, as well as other issues that came up during her tenure as chair and CEO of the Taxi and Limousine Commission, a position she was appointed to in 2014 by Mayor Bill de Blasio. Joshi had served under the pior TLC commissioner and also held positions at the city’s Department of Investigation and with its police oversight body, the Civilian Complaint Review Board.

During Joshi’s five years leading the TLC, the de Blasio administration, at times working with the City Council, sought to be aggressive in response to the industry disruption posed by Uber and Lyft.

Under her and de Blasio’s leadership, the city made a failed attempt to extend some regulations to the for-hire apps in 2015, when the companies were smaller, losing a battle over placing a cap on the number of new cars that could be licensed after a high-profile battle with the companies and their supporters. The Taxi and Limousine Commission did mandate that larger app-baseds companies share trip data with the city, taking a significant step toward understanding how the emerging sector was influencing traffic and travel patterns in the city.

The city wound up getting the cap in 2018, while also creating sweeping new pay protection for for-hire drivers. New York City was the first municipality in the country to take the series of actions, leading to significant changes for both the companies, their traditional taxi competitors, and the city’s transit scene.

“In New York City, we have a good history of data-driven policy,” Joshi said on the podcast. She pointed out that taxi cabs have been tracked in great detail since 2007. The city Department of Transportation uses that information to understand traffic flow and the TLC uses it to make driver protection, licensing, and other regulations. The city’s mandate that app-based taxis share trip data followed this precedent and allows for similar data-driven policy, according to Joshi.

In what would become the final months of her tenure, New York City rolled out several new regulations that have impacted the app companies.

Last year, the City Council, with the blessing of Mayor de Blasio, voted for a one-year cap on new for-hire vehicle licenses, unless for wheelchair accessible cars, and mandated a minimum wage of $17.22 per hour for rideshare drivers. It also empowered the TLC to set minimum pay rates. These actions enabled the TLC to study the impact of ride-hail apps on the city’s congestion, among other dynamics. Uber and Lyft have opposed these legislative and regulatory actions.

The city’s recent actions have come under legal scrutiny since they were announced, but the city has prevailed when legal challenges have been filed and the cases have been closed. “This is an industry that is very litigious,” Joshi admitted.

New state congestion charges for taxis ($2.50) and rideshare vehicles ($2.75) were ruled to be legal by a New York judge in February. This month, another judge upheld the new minimum wage rates against challenges from Lyft and Juno. However, the app companies’ lawsuit against the one-year cap is still ongoing.

The new regulations are having clear effects. In April, Uber and Lyft both stopped accepting new driver applications, perhaps because of the new utilization rate structure and wage minimums, not to mention the vehicle license cap. The utilization rate structure effectively penalizes rideshare companies for having a large number of drivers on the road at the same time who are not moving passengers.

During the interview, Joshi explained that “40% of every hour the app drivers that are on the road don’t have passengers. The driver pay rules try to address that balance in a way that works off of incentives and penalties. You’re going to have to pay more if you can’t keep your drivers busy,” she said. She pointed to the April announcements from Uber and Lyft as being “great news” for existing drivers, because they are the ones most hurt by oversaturation.

Joshi also believes the move was “a good example of where regulation and the market worked together,” where “the regulation is aimed at the problem and the reaction came from the companies.” This was the main goal of the policy, according to Joshi, who said “closing the pool is what we really wanted to get at.”

On May 8, some app-based drivers in New York and other cities across the country went on strike in protest of low wages and low quality of life at work, though some in New York hailed the city’s new laws and said they were striking in solidarity with drivers elsewhere and against the companies more generally. This came just ahead of Uber’s initial public offering (IPO) of stock. The New York Taxi Workers Associations coordinated the strike in New York City.

Despite her criticisms of ridesharing apps, Joshi also recognized the benefits that the industry had for the city. She said that “this is a good service, a popular service filling a void.” According to Joshi, the boroughs outside Manhattan have seen the biggest benefit from the apps and the effect on those areas “was the concern when the cap legislation was passed.”

However, Joshi also said that TLC data has shown “that there is still continuous growth” in mobility in boroughs other than Manhattan through the apps, which she attributes to the “built-in excess in the business model.”

While Joshi oversaw these new regulations and implemented them in the face of opposition from the major companies, she has also been criticized for negative consequences that the growth of these apps, including the falling value of taxi cab medallions and wages for taxi drivers, to the increased stress and suicide rates of drivers.

When asked why she is not in favor of a bailout for taxi medallion owners, Joshi said that “the problem stems from the loan,” pointing out that taxis earn profits when they are on the road and saying that banks were irresponsible in their lending.

“So many of these taxi medallions have outsized loans attached to them because the price was inflated,” comparing the situation to the housing bubble of the late 2000s. She believes that a bailout would primarily benefit the banks who offered loans for taxi drivers to acquire the medallions, saying, “I don’t know if the individual owner is better off, because they still may owe a tremendous amount of money to the banks.”

Joshi believes that banks “are going to have to write [the loans] down anyway” and “resize them for what they’re selling for now, because they have to take the loss and they might as well keep the borrower.”

As Joshi moves on to a position at NYU’s Wagner School of Public Policy as a visiting scholar and a policy advisor at Remix, the debat eover the future of the taxi industry in New York City continues, with some of her moves hailed as major progress to help save the yellow taxis and improve the lives of drivers of those and other for-hire vehicles, while others say the city has not acted quickly or aggressively enough to help taxi medallion owners, for-hire vehicle drivers, and others.

Inarguably, New York City was the first U.S. city to effectively increase regulation of the app-based for-hire vehicle companies, despite significant opposition from the industry.

Additionally, TLC was one of the agencies responsible for implementing Mayor Bill de Blasio’s Vision Zero street safety program. Fatalities involving TLC vehicles dropped 50% during Joshi’s tenure. Lastly, Joshi has been credited with overseeing an increase in wheelchair-accessible vehicle availability.

[Listen to the full conversation: What's The [Data} Point? with former Taxi Commissioner Meera Joshi]

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by Andrew Millman, Gotham Gazette
   

Read more by this writer.

Ben Max contributed to this story.

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Former City Taxi Commissioner on Regulating the App Companies and Saving the Yellows Sun, 12 May 2019 04:00:00 +0000
What's the [Data] Point? 125,323, with Former Taxi Commissioner Meera Joshi https://www.gothamgazette.com/city/8507-what-s-the-data-point-125-323-with-former-taxi-commissioner-meera-joshi https://www.gothamgazette.com/city/8507-what-s-the-data-point-125-323-with-former-taxi-commissioner-meera-joshi whats the data point


What's The [Data] Point? Episode 73 -- 125,323, Meera Joshi, former chair of the city's Taxi & Limousine Commission [You can download What's The [Data] Point? wherever you get your podcasts, including on iTunes]

wtdp meera joshiMeera Joshi was appointed by Mayor Bill de Blasio in 2014 to chair the city's Taxi & Limousine Commission, which sets rules for and has oversight over the city's taxi industry, including yellow and green cabs, app-based for-hire vehicles like Uber and Lyft, and more. Joshi left city government in March and joined the podcast to reflect on her tenure at TLC, including the major challenges of dealing with declining yellow and green cab sectors and booming for-hire vehicle sector.

Listen to the conversation and let us know what you think: Ben Max of GG (@TweetBenMax), Maria Doulis of CBC (@MariaDoulis). Listen below or download wherever you get your podcasts!

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by Ben Max, Gotham Gazette
     

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What's the [Data] Point? 125,323, with Former Taxi Commissioner Meera Joshi Thu, 09 May 2019 04:00:00 +0000
New York City Shouldn’t Regulate Ride-Hailing Apps - It Should Compete With Them https://www.gothamgazette.com/130-opinion/8080-new-york-city-shouldn-t-regulate-ride-hailing-apps-it-should-compete-with-them https://www.gothamgazette.com/130-opinion/8080-new-york-city-shouldn-t-regulate-ride-hailing-apps-it-should-compete-with-them mayorsoffice balkin

(photo: Ed Reed/Mayor's Office)


Smartphones are transforming transit in cities all over the world, and city governments are struggling to figure out how to best manage the change. If the world was looking to New York City’s recently enacted legislation affecting for-hire vehicle companies, then there will be disappointment given that, once again, the city’s political establishment decided to impose an outdated regulatory regime on innovative firms, making life harder for thousands of new taxi drivers while raising the price of rides for millions of New Yorkers and visitors to the city. The law, enacted this summer, caps the number of e-hail licenses in the city for a year and also enables the city to impose regulations on the type of compensation structures offered to drivers.

Who benefits? Politicians argue that it’s existing drivers who received their taxi registration before the one-year moratorium on new licenses was implemented, but if you think they’re the primary beneficiary then there’s a bridge in Brooklyn I’d like to sell you.

In reality, politicians got behind this legislation because they want to send a message to Silicon Valley, the startup community and their financiers: If you want access to the 8-plus million person New York City market, you’ll have to go through the local political class first, and that will cost you: in form of taxes, campaign contributions, lobbyists, and more.

True to form, the left and right have staked out their normal positions on this issue. For the left, it’s all about protecting the wages and rights of the less-than-10,000 existing drivers, even if that means higher costs for all New Yorkers and more obstacles for people who want to earn money by driving a car. For the right, it’s about protecting businesses and drivers from regulatory controls that will raise prices for consumers, even if that means facilitating the big business takeover of an industry that has been a source of wealth for independent individuals and small businesses in New York City for a century.

Like many issues involving new technology, we need to look beyond the left-wing or right-wing way to manage these technologies, and instead look to the “open source way.”

What do we want? Safe, convenient rides, with low prices for riders, high income for drivers, positive impacts on traffic, and data protection for everyone involved.

The best way to achieve these ends isn’t complex licensure regimes, quotas on new taxis, or putting more surveillance technologies in our cars or on our streets. Instead, New York City should do for its local cab industry the same thing successful industries do for themselves: standardize how information is formatted and exchanged between systems. This makes it possible for information from one app, like Uber, to be read, understood and interacted with by another app, like Lyft or Google Maps.

Making ride-hailing data more standardized and interoperable will have a number of benefits.

First, it aggregates supply and demand, which increases competition in the taxi market leading to lower prices for riders and more business for drivers.

Second, it gives riders and drivers more options, allowing them to use an app with the mission of benefiting New Yorkers instead of benefiting investors in giant tech corporations.

Third, it mitigates a threat many people fear: that Uber, Lyft, and other venture-backed ride-sharing apps are subsidizing their own cab rides to undermine the legacy taxi industry, and then once the legacy industry is dead, they’ll jack up prices. That strategy won’t work if New York City is committed to maintaining a system of its own.

The idea of establishing a “ride sharing” (or “e-hail”) standard isn’t new. It has been discussed and proposed by a number of people in New York City’s tech community for years, including Ben Kallos, a tech-aware City Council member who proposed it in a 2014 bill, and by Chris Whong, now the lead developer of NYC Planning Labs, who proposed it in a 2013 blog post.

Critics of this approach have claimed that the city doesn’t have the capacity to develop its own e-hailing systems, but that simply isn’t true. Generic apps similar to Lyft and Uber exist in hundreds of markets around the world. Even local cab companies in New York City have developed their own apps.

Creating an e-hailing system for New York City would likely involve a three-step process: (a) develop a “ride sharing data standards” body that would bring riders, drivers, city agencies, and app developers together to create specifications for how all taxi-hailing information should be formatted and exchanged; (b) develop and operate a basic, open source e-hail smartphone application that would use these data standards to, like any one of the dozens of ride-hailing apps available around the world, allow New Yorkers to request rides and drivers to fulfill those requests; and (c) create a city-administered server that not only processes information from the current city taxi app but also allows other ride-sharing apps to exchange their information with the server.

This approach would give Uber, Lyft, and other popular apps a choice: they can plug in to the city’s e-hail exchange server and share their rider and driver information with other apps - or go it alone and face the consequences of having less access to rider and driver information than their competitors.

This approach leverages the city’s considerable influence to produce a number of benefits:

By following established best practices from government digital service organizations and open source communities, this system could be produced quickly and inexpensively. And by open-sourcing an app and inviting other cities to use and modify the New York City code, we could join a small but growing community of cities around the world developing and sharing open source software (such as Madrid’s Consul project) that enables them to provide government services faster, better, cheaper, and in a more ethical manner.

The original meaning of “regulation” wasn’t the levying of taxes and fees to penalize innovation -- it was to “make regular” through the implementation of transparent business practices and the adoption of standard operating procedures. That is precisely what New York City should be doing, and it can do so by modelling best practice behavior that challenges Silicon Valley (and its New York-based counterparts) to produce better products, for lower prices, in more responsible ways, with more respect for the rights of their users.

Any municipality can throw rocks at Silicon Valley by imposing taxes and creating obstacles to market entry, but few have the capacity and scale to challenge Silicon Valley by creating innovative products. New York City has that ability. Let’s use it.

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Devin Balkind is a technologist and nonprofit executive who works on civic technology projects in New York City. On Twitter @DevinBalkind.

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New York City Shouldn’t Regulate Ride-Hailing Apps - It Should Compete With Them Thu, 29 Nov 2018 05:00:00 +0000
The City’s Bogus Compromise with Uber Would Hurt Riders with Disabilities https://www.gothamgazette.com/130-opinion/7362-the-city-s-bogus-compromise-with-uber-would-hurt-riders-with-disabilities https://www.gothamgazette.com/130-opinion/7362-the-city-s-bogus-compromise-with-uber-would-hurt-riders-with-disabilities accessible cab

(photo via nyc.gov)


The hustle and bustle of New York is a part of its identity: we New Yorkers are always on the move. Our officials must fight for equal access to transportation, but as those of us with disabilities know, accessible methods of travel are shamefully limited. This is why the Taxi and Limousine Commission (TLC) has apparently been negotiating with private for-hire car companies like Uber and Lyft on the issue of wheelchair accessible taxis for several months.

This could have been an encouraging sign, but last week, it became clear that TLC is more interested in cutting a backroom deal with Uber and Lyft than it is with seriously listening to wheelchair users. The TLC has even gone so far as to ignore sensible calls for action in favor of a proposal initiated by the very same companies who created this crisis.

It has been clear that the city’s yellow taxi accessibility program is on the ropes – mainly because accessible taxis cost much more to operate and maintain than regular taxis. The TLC created the Taxi Improvement Fund (TIF), which takes 30 cents from each yellow cab ride to support drivers with accessible vehicles. But it has become increasingly clear to disabled riders that the current TIF program is not enough. Drivers are struggling to make ends meet, and the program is in danger of complete collapse.

That is why I have called upon the TLC to mandate that ride-hail companies, including multi-billion dollar giants like Uber and Lyft, contribute to the TIF. Since these companies have proven to less than friendly to disabled riders, they should have to pay a higher fee.

This plan is simple and effective. The TIF is a city fund overseen by the city, rather than a state tax, so this tweak wouldn’t require any changes to state law or any approval from state officials. (For some reason, the TLC recently tried to convince me that it would require state approval, but that is just not true.) Not only is it easy to implement, but this proposal would provide critical support for the drivers who need it most and help wheelchair users navigate the city.

It is a win for all stakeholders. Elected officials get an easy fix to a critical problem, cab drivers already doing the right thing get support they need, and New Yorkers with disabilities get greater transportation access.

Not so fast, though.

The TLC is considering a proposal – one that originated with Uber, Lyft and other for-hire vehicle providers themselves – that would create a two-year pilot program allowing companies who opt in “to provide accessible service via a central dispatch system.”

The currently-negotiated plan is that companies would provide accessible vehicles to riders who request them in under 15 minutes, 60 percent of the time in the first year and 80 percent in the second.

I know that this proposal will not result in any meaningfully positive changes for wheelchair users like myself.

Despite from the fact that these companies have a track record of promoting falsehoods when it comes to accessibility and have frequently avoided actually putting accessible vehicles on the road, there is nothing in this proposal to hold them accountable.

In fact, it looks like this so-called pilot program would amount to little more than words.

This potential compromise also does nothing to solve the TIF crisis and would likely lead to the end of the city’s accessible taxi program. This outcome would leave the many riders who depend on wheelchair-accessible vehicles in the hands of private companies, who, at the very best, would only promise to provide a car within 15 minutes 60 percent of the time.

In a city with a terrible track record on wheelchair accessibility – have a look around any subway station – ceding this ground is an unacceptable outcome that will leave New Yorkers with disabilities without a reliable method of transportation.

That is an outrage. Fortunately, a sensible solution is out there – but it is up to the TLC to do the right thing, and the time is now.

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Dustin Jones is president and founder of United for Equal Access New York, a disability advocacy group.

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The City’s Bogus Compromise with Uber Would Hurt Riders with Disabilities Sun, 10 Dec 2017 05:00:00 +0000