Tuesday, May 08, 2018

New York Times: What Will New York Do About Its Uber Problem?

New Yorkers who can afford to avoid their dysfunctional subway system are spoiled for choice these days. In addition to long-established taxis, livery cabs, black cars and limousines, they can summon rides through Uber, Lyft, Via, Juno and other app-based ride-hailing and ride-sharing services. While this new surfeit of options has been a boon to people trying to get around town, it has also helped lay waste to the livelihoods of taxi drivers and turn New York’s already busy streets into glorified parking lots — and leaders like Mayor Bill de Blasio and Gov. Andrew Cuomo, Albany and the City Council have yet to come up with an effective strategy to deal with these problems.

Cities have a long history of intervening to impose order on their streets. No large metropolis can accommodate everyone who would like to drive or be privately driven around — street space is a limited resource, especially in the densest neighborhoods and at the busiest times of the day. In the 1930s, during the Great Depression, New York created its taxi medallion system because drivers looking for work flooded the streets, far outstripping demand and driving down wages for drivers. 

With the rise of Uber, Lyft and the like, the city is again confronting a tragedy of the commons.
Many other thriving cities, including London and Paris, are also struggling to figure out how to respond to these new business models. A big part of the problem is that elected officials have not updated regulations written for a bygone era in which each type of car service tended to stay in its lane, so to speak — in New York, taxis primarily plied the streets of Manhattan and the city’s airports, liveries took care of residents of the other boroughs, and black cars chauffeured the denizens of Wall Street. While the city has issued just 13,587 taxi medallions — a small fraction of the more than 60,000 cars Uber commands — it gave freer rein to the liveries and black cars under the assumption that these specialized services would never become dominant.

Ride-hailing apps have shattered those boundaries by signing up drivers with livery or black-car licenses. These companies cast themselves as filling big gaps in the transportation system, and it’s true that they have been great for people in mass-transit-starved parts of the city. But their growth has also led to many veteran taxi and black-car drivers seeing a devastating decrease in take-home pay. 

That’s largely because they are completing fewer trips than before. As a result, the value of the taxi medallions that drivers must either buy from the city or rent from taxi companies has crashed in recent years, going from a high of about $1.3 million in 2014 to less than $200,000 today. Over the past five months, four drivers who were financially strained have killed themselves, and many others have lost their medallions to foreclosure.

At the same time, traffic has slowed to a crawl, to just 8.2 miles per hour south of 60th Street in Manhattan in 2015, down from 9.4 miles per hour in 2010, according to the city’s Department of Transportation.

It makes little sense for the city to regulate the old and new guard of for-hire cars differently when many New Yorkers use them interchangeably — as do some drivers, who have been known to switch between traditional cabs and app-based services. While it would be impractical for the city to get rid of its existing regulations in one fell swoop, it could phase in new regulations. A more thoughtful regime would ensure that all drivers make a living wage by establishing a minimum fare for riders, and a standardized share of that fare for drivers, regardless of what kind of car they drive. Or as Brad Lander, a City Council member from Brooklyn, has proposed, the city could require companies like Uber to pay drivers a minimum wage. Further, the city ought to standardize regulations like those requiring that a certain number of cars be accessible to people with disabilities.

The city and state also need to create a smart congestion pricing plan to reduce traffic while raising money for upgrades to the subway and bus system, which would encourage fewer people to get into cabs and Ubers. The Legislature recently added a surcharge on taxi trips below 96th Street in Manhattan: 75 cents for pooled trips, $2.50 for yellow taxis and $2.75 for black cars and Uber and Lyft rides. This charge is flawed. It does not vary by the time of day, and lawmakers failed to impose fees on private cars and trucks. A smart pricing scheme would discourage use of all vehicles when traffic is at its worst and encourage car travel and deliveries at off-peak times.

Over time, the city should consider whether it owes something to drivers who sunk their savings into taxi medallions. Many drivers went into debt to buy these permits because the city promised them a monopoly on picking up passengers, a promise it has not been able to keep. No doubt any compensation plan would be controversial, and working out the details would be tricky — the city, for example, should not compensate investors, like Michael Cohen, President Trump’s lawyer-cum-fixer, who should have known that they were taking big risks by buying up dozens of medallions. Governments in Quebec and Australia have compensated or are proposing compensating taxi drivers for the lost value of such licenses.

The city needs to make its transportation system fairer to paid drivers, responsive to the needs of commuters and more environmentally sustainable. If the mayor and other elected officials put their minds to that task, they might also help set a model that cities around the world could follow.


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