Monday, December 24, 2018

Gothamist: Judge Temporarily Blocks $2.50 Taxi Surcharge Scheduled For January 1st



A New York judge has temporarily blocked a state congestion pricing surcharge that would have added a $2.50 fee to yellow cabs and some for-hire vehicles in order to help fund the subways.

The fee was slated to begin on New Year's Day, and would've targeted trips that touch a designated "congestion zone" below 96th Street in Manhattan. On Thursday night, Manhattan Supreme Court Justice Martin Shulman issued a temporary injunction so the court could review a last-minute lawsuit filed by cab drivers opposed to the fee. A hearing is scheduled for January 3rd.

The fee was approved by Governor Andrew Cuomo and the legislature in March, after the broader push for congestion pricing failed once again. From the start, critics of the legislation have argued that the piecemeal approach would unfairly target already-struggling taxi drivers, while letting private motorists off the hook for their role in clogging the streets. "We are pleased Albany's sham of a congestion tax is now temporarily suspended," said Independent Drivers Guild spokesperson Moira Mintz in a statement.
According to the New York Taxi Workers Alliance, cab drivers could lose up to $15,000 a year in income under the legislation. In frequent rallies in Albany and outside City Hall, they've dubbed the fee a "suicide surcharge," in reference to the string of financially devastated drivers who've taken their own lives over the last year. Taxi and Limousine Commissioner Meera Josi, who is named in the lawsuit, admitted last month that the fee was "potentially devastating" for yellow cab drivers, whose fares already include a $2.50 pick-up fee and 80-cent accessibility and mass transit charge.

The fee was expected to bring in about $400 million a year for the MTA, at least some of which had been earmarked for the Subway Action Plan. In a statement to Gothamist, Patrick Muncie, a spokesperson for Cuomo, said: “The state plans to vigorously defend the law, which was approved by the legislature and will generate hundreds of millions of dollars to improve the subway and help ensure New Yorkers have a safe, reliable transportation system."

This week, the governor vowed to implement a comprehensive congestion pricing proposal during his first 100 days in office. Driver advocates, including the NYTWA, have said that yellow cabs should be exempted from any congestion pricing plan, because it would "make survival—let alone a raise—impossible for drivers."

Uber, meanwhile, has supported the fee, spending around $100,000 on lobbying efforts, according to the NYTWA. As written, the legislation would charge only a 75 cent fee when a group ride is requested through one of the app-based services, even if the trip isn't matched with a second passenger. A spokesperson for Uber declined to comment on the ruling.

The lawsuit names the state, the city and the Taxi and Limousine Commission as defendants. Many of the plaintiffs are family members and close friends of drivers who've committed suicide, including the brother of Kenny Chow, who took his own life in May after racking up $700,000 in debt on his medallion. A total of eight for-hire drivers have committed suicide in the last 13 months.

"We know the fight is long from over, but we feel relieved and encouraged that a judge is telling the Governor to listen to our suffering," said NYTWA Executive Director Bhairavi Desai. "There is a real crisis here. And Governor Cuomo has the power to help drivers instead of adding an additional crushing burden on a workforce already facing financial despair."

© 2003-2018 WNYC. All rights reserved.

Thursday, December 20, 2018

Forbes: Over Uber And Lyft? These Apps Hail Rides Or Book Ahead

By Janet Burns

For almost a decade, ride-hail platforms like Uber and Lyft have cornered a service consumers demand: the ability to book rides through an app. In response, professional taxis have increasingly turned to similar platforms to help bring their industry and customer pool up to speed.
These include apps like MyTaxi, Cabify, and Taxi.EU, plus dozens of worker-run platform cooperatives serving passengers around the nation and world. 

Here in the ride-hail revolution's home country, one of the most popular taxi apps is Curb, designed to let users hail licensed cabs and Access-A-Rides, book flat-rate or per-mile rides in advance, and pay for ongoing taxi rides.


Focused on major metropolitan areas for now, Curb has participating fleets in 65 US cities so far, accessible by Android and iOS, and plans to expand. It's operated by Curb Mobility, which provides payment and backseat entertainment services (previously as Way2Ride) to fleets in New York City and nationwide.

Unlike Uber, Lyft, Via, Gett, and Juno, which connect users to those tech firms' pools of privately recruited and vetted drivers, Curb works with cities' extant official services to link riders with available taxis and Access-A-Rides in their area — something cab companies (and Uber itself) could and probably should have done a decade ago.

By phone, Curb's vice president of mobile Jason Gross said that the ability to hail, pre-book, and pay for rides through an app is something drivers and riders have requested for years.

For most individual fleets or cities, however, it's been a huge struggle to launch and promote apps that can compete with transportation network companies (TNCs) like Uber and Lyft, whose explicit focus and expertise is technology, not human transport.

"The taxi industry began as a 'Wild West' a century ago, and we're seeing [riders and drivers] go through exactly the same problems again," Gross said. "Ironically, the fastest way to get a vehicle is many cases is still to walk outside."

While taxi dispatches and app orders account for some of professional drivers' fares, Gross explained, the bulk come from being at the right place at the right time.

The result is that drivers — whether in radio-linked yellow cabs, or algorithm-and-GPS-led private vehicles — will inevitably try to position themselves where they believe the best fares are likely to be: places like airports, southern Manhattan, and other bustling zones.

Another result, Gross said, is that the important issue of denial of service to different communities is often conflated with drivers' efforts to position themselves for trip requests. "If there's a belief that there are more trips with higher fares in Manhattan, drivers will congregate in Manhattan," he said.

"It’s a little disingenuous to say that the Taxi and Limousine Commission (TLC) was not addressing underserved areas. And the idea that we're at over 100,000 professional drivers since the [TNC boom], and don't have enough vehicles to serve five boroughs? That's not true either."

Getting drivers to where they're needed (and avoiding pile-ups where they're not) is a tricky issue to solve, particularly without a system-wide strategy and preferably real-time data on demand. For their part, TNCs have left the decision of where to cruise around up to the individual drivers.

New York's TLC, meanwhile, attempted to improve service outside of Manhattan several years ago with the introduction of 'boro cabs,' or green cabs, which are licensed to pick up street hails in those areas where yellow cabs are seldom seen, and black cars have traditionally filled in.

The TLC stopped issuing green cab medallions this year due to ongoing competition from TNCs, but thousands of those vehicles are still on the road, and ready to hail or book via Curb. "People wanted those licenses, to do that work," Gross said.

Gross said that mounting financial pressures and street traffic have highlighted how much NYC's yellow and green cab drivers, black car drivers, and even TNC drivers have in common, from everyday struggles to high personal stakes. "Going back several years, taxis and black car companies saw themselves in a fight to the death, but since the advent of ride-hails, we're seeing a lot more cooperation."

For example, today's NYC's taxi and livery or 'black car' drivers both rely on fares from the publicly subsidized Access-A-Ride program in order to get by after years of competing with TNCs like Uber, which subsidize their sub-market-rate rides with billions of dollars from investors.

According to Gross, Curb plans to extend its network to include more livery fleets next year, while NYC pilot programs have sought to bring Uber and Lyft drivers into this accessibility network for New Yorkers. Just this week, Brooklyn borough president Eric Adams hailed the pilot program as a way of helping close the transportation gap for NYC students with physical disabilities.

"It's the first time we've been part of the paratransit program, which our API helps coordinate. We take a lot of pride in of the work we're doing, connecting the disabled community and knowledgeable drivers with clearly marked and often pre-equipped cars, who won't be forced [into legal] arbitration if there's a medical issue."

"The program provides hundreds of thousands of trips each month, and we take in their overflow, which is thousands of rides a month," Gross said. "Numerous drivers have told me, 'I would have turned in my license if not for the work provided through Access-A-Ride.'"
For riders accustomed to Uber and Lyft, Curb's pricing system might come as a bit of a surprise: not including Curb's $2 booking fee, the price of a ride may well be higher than TNCs' estimates during their slow times, or well lower than TNCs during "surge pricing."

According to a recent report on taxi and ride-hail services in the Raleigh, NC area, for example, taxi cabs average a flat $46.70 for trips from the city's downtown to Raleigh-Durham International Airport; at 11 p.m. on a weekday, Uber and Lyft might provide the trip for a little more than $20, but on a Saturday night, it would cost between $50 and $60 (not including tip). 

Prices for vehicles booked through Curb will most likely be higher than Uber's more often than not, however. That's because taxi rates have been calculated and set to cover the costs of labor, insurance, local fees, safety measures, and even oversight for fleets.

Uber and Lyft's prices, on the other hand, have generally stayed comfortably below what it actually costs for an adult person to pick up and drive another person from Point A to Point B, all things considered — seemingly a key part of their plan to put robots behind the wheel.

"We're not a VC-backed company, so we're trying to focus where we can make a difference," Gross said. "That means providing an experience with all the benefits of participating in the regulated industry, but with the level of service and quality that customers demand."

"Regulation is not a bad thing. It can be subject to overreach, but it should be allowed to exist, and to be creative in the ways it solves problems," he continued.

"At the end of the day, we're all stakeholders in the community. New York is also really serving as a model for cities around the country for the right level at which to regulate, and how to solve problems."
 
Going forward, Gross said, "We need to be finding out how to utilize the resources we have, and decide to become more efficient in how we provide transportation."

He added, "I think we can do better."

©2018 Forbes Media LLC. All Rights Reserved.

Thursday, December 13, 2018

November 2018 TLC medallion sales


The November 2018 New York City Taxi & Limousine Commission (TLC) sales results have been released to the public. And as is our practice, provided below are Jim Shenwick’s comments about those sales results.

1. The volume of transfers rose again from October. In November, there were 154 unrestricted taxi medallion sales.

2. However, almost all those transfers were bankruptcy and foreclosure transfers!

3. 50 of the 154 sales were foreclosure sales, which means that the medallion owner defaulted on the bank loan and the banks were foreclosing to obtain possession of the medallion. We disregard these transfers in our analysis of the data, because we believe that they are outliers and not indicative of the true value of the medallion, which is a sale between a buyer and a seller under no pressure to sell (fair market value).

4. And in an unprecedented development, 93 of the sales (60%) were sales of medallions in bankruptcy proceedings.  As these sales are constrained by debtors’ and trustees’ need to liquidate distressed assets, we also disregard these transfers in our analysis.

5. The large volume of foreclosure and bankruptcy sales (approximately 93%) is in our opinion evidence of the continued weakness in the taxi medallion market.

6. The eleven regular sales for consideration ranged from a low of $140,000 (one medallion) to $175,000 (two medallions), $180,000 (seven medallions) and a high of $320,000 (one medallion).  

7.  The fact that 93% of all transfers in November 2018 were either the result of bankruptcy filings or foreclosure sales shows continued weakness in the taxi medallion market and no sign of a correction.

Please continue to read our blog to see what happens to medallion pricing in the future. Any individuals or businesses with questions about taxi medallion valuations or workouts should contact Jim Shenwick at (212) 541-6224 or via email at jshenwick@gmail.com.

Tuesday, December 04, 2018

Crain's New York: TLC approves historic pay rules for app-based drivers

By Matthew Flamm

The Taxi and Limousine Commission made history on Tuesday morning when its commissioners voted to set the first minimum pay-rate in the nation for app-based drivers. 

Driver groups are declaring victory on—and claiming credit for the win—while Uber, Lyft and Juno found a lot to complain about. Only the pooled-ride service Via, which already pays its drivers better than minimum wage, applauded the changes.

The rules, which will go into effect in 30 days, call for minimum gross pay of $26.51 per hour, which will boil down to $17.22 after expenses. That is the equivalent for an independent contractor of $15 per hour, including paid sick leave and payroll taxes.

Most drivers, a TLC-commissioned study found, earn about $11.90 an hour. On an annual basis, the new rules will mean a raise of more than $9,000.

Copyright © 1996-2018. All Rights Reserved.

New York Times: Why Are Taxi Drivers in New York Killing Themselves?

By Emma G. Fitzsimmons

A taxi driver named Roy Kim recently became the eighth professional driver to die by suicide in New York over the last year.

The city’s taxi commissioner, Meera Joshi, has characterized the deaths as an epidemic. The stories have drawn attention to the economic despair in the industry and prompted the City Council to weigh new legislation to help taxi owners reduce their debt and to increase driver wages.

Each case is different and it is difficult to know why someone decides to take their life. Most of the drivers were immigrants in their 50s and 60s, some of whom had told friends and family that they were having a difficult time making a living as Uber began to dominate the ride-hailing industry.

Three of the drivers owned a taxi medallion — the aluminum plate required to drive a cab in New York that once sold for more than $1 million. It is now worth as little as $200,000.

Here’s what we know about Mr. Kim and the broader crisis:
Mr. Kim was a 58-year-old Korean immigrant who lived in Queens. He had driven a taxi for more than four years and bought a medallion last year for about $578,000 — an occasion he celebrated by having a sushi dinner with a driver he met years ago while waiting for passengers at Kennedy International Airport.

But Mr. Kim had complained to friends this year that he could not find fares. He began working more often, eventually driving seven days a week. Still, his friends were surprised by his death.

“There’s no other reason but the financial aspect,” said Kyung Ryong Kang, a friend and fellow driver who had celebrated at dinner with him last year. “It was harder and harder to survive.”

On Nov. 5, Mr. Kim was found hanging by a belt from the doorway to his bedroom, the police said.

He had an adult son who lives in South Korea. Friends have been unable to reach Mr. Kim’s son.



“He was a generous person and always bought coffee for us,” he said.
Two other drivers who took their lives also owned taxi medallions: Nicanor Ochisor, who was from Romania, and Kenny Chow, who was from Burma. Both told friends they were worried about paying off their debt.
In February, a black-car driver named Douglas Schifter killed himself with a shotgun in front of City Hall. He had written on Facebook that Uber had flooded the streets with vehicles and complained about having to work 100 hours a week to survive.

Drivers for Uber and other car services have also raised concerns about low wages. The other drivers who died by suicide were: Fausto Luna, an Uber driver; Abdul Saleh, a taxi driver who had leased his vehicle; Danilo Castillo, a livery driver; and Alfredo Perez, a livery driver.

“This tragedy underscores the importance of finding new ways for government, the industry and lenders to work in unity to address the financial challenges that are weighing so heavily on our licensees,” Ms. Joshi said in a statement after Mr. Kim’s death.

In August, the City Council approved a cap on Uber and other ride-hail vehicles — the first major American city to do so. The Council is considering a separate set of bills that would establish a health fund for drivers and create “driver assistance centers” to offer mental health counseling and financial advice.

Corey Johnson, the Council speaker, said the city was also looking at options to help medallion owners saddled with massive debt, from a partial bailout to a hardship fund. The New York Taxi Workers Alliance, a group that represents drivers, is urging the city to work with banks and philanthropic groups to write off 20 percent of taxi owners’ outstanding debt.

At the vigil for Mr. Kim, the group’s leader Bhairavi Desai had a message for taxi drivers who are struggling: The city is finally addressing the problem and things will get better soon.

“We know change is coming,” she said.

After Mr. Ochisor’s death, his family raised more than $30,000 to help pay off his medallion. An anonymous donor also contacted his son Gabriel Ochisor, wanting to help longtime drivers like his father. The donor sent him a batch of money orders, each worth $1,000, to deliver to 217 owners who bought their medallion before 1990 and still drive their taxi.

Mr. Ochisor is trying to reach all of the drivers to mail the gifts, which will be sent with a letter from the donor.

“Please know that your 3 decades (or more!) of service are appreciated and that my life has been made better by your having worked the streets,” the letter says.

© 2018 The New York Times Company.  All rights reserved.

Wednesday, November 28, 2018

Repossessions of Taxi Medallions by Secured Lenders


Here at Shenwick & Associates, an increasing part of our law practice involves workouts of loans for borrowers with taxi medallions as collateral for the loan.   Over the past three months, we’ve noticed a trend in which the bank or secured lender repossesses the taxi medallion(s) when the loan is in default, instead of allowing the borrower to retain the medallions during workout negotiations.

Under New York law, the security agreement and other loan documents, lenders can repossess taxi medallions, which usually happens on nights or weekends when the cab is not in use.  Typically, the Marshal will crowbar the medallion off the dashboard and take the rate card.  Although the cab is not repossessed, if the cab is subject to a vehicle loan that is in default, the cab may also be repossessed.

Some borrowers have asked us why the lenders repossess the medallions without notice to the borrowers.  New York law and the loan documents signed by the borrower provide that no notice is required for the lender to exercise its remedy of repossession.  And if borrowers were noticed in advance of the repossession, lenders would run the risk of the collateral medallion(s) being hid from the lender!  Accordingly, if you own a medallion and the loan is in default, you may want to park the taxi in a garage or in a location other than on the street.

For borrowers whose medallions are in default, many workouts will ultimately end with surrender or repossession of the medallion.  In certain cases, surrender or repossession of the medallion can end litigation or other collection efforts by the lender.

Taxi medallion loan borrowers and guarantors whose medallion(s) were repossessed still run the risk of a deficiency judgment for the balance of the loan by the borrower or a judgment against the guarantor.  Some lenders may forbear from seeking a deficiency judgment once the medallion is repossessed, but borrowers need to be aware that loan documents allow for that remedy until the statute of limitations has run.  In New York, the statute of limitations for a lender to seek the deficiency balance from a borrower is six years.  In many cases when a lender obtains a deficiency judgment, we negotiate a discounted settlement by threatening bankruptcy or by having the client file for bankruptcy.

Another factor that repossessed taxi medallion owners must consider is relief of indebtedness income pursuant to § 108 of the Internal Revenue Code. Simply stated, if a taxi medallion owner owes a bank $1,000,000 and only repays the bank $500,000, then the tax law provides that they must recognize $500,000 of income on their tax return. Borrowers need to discuss this potential issue with their accountant or tax advisor during settlement negotiations.

For more information about defaulted taxi medallion loans and repossessed medallions, please contact Jim Shenwick.