Taxi commission fails to regulate Uber and Lyft under two-year-old city law

This article orginally appeared in Cranes New York Business on August 13, 2020 at 
https://www.crainsnewyork.com/transportation/taxi-commission-fails-regulate-uber-and-lyft-under-two-year-old-city-law

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Taxi commission fails to regulate Uber and Lyft under two-year-old city law

BRIAN PASCUS


The city’s taxi enforcement agency known for its heavy hand with drivers has neglected to implement a two-year-old law aimed at helping yellow taxis compete with Uber and Lyft as the ride-hail apps roiled the industry.


Local Law 149, signed by Mayor Bill de Blasio and enacted Aug. 14, 2018, created the category of High Volume For Hire Services—companies that handle more than 10,000 rides a day—and required them to apply for a special permit through the Taxi and Limousine Commission. Under the regulation they must turn over records, including driver compensation, environmental impact, financial impact and other information, that could result in further restrictions on them.

So far, both Uber and Lyft have applied for the permits, but the TLC has not approved their applications.

“The TLC failed to timely enact regulations and enact the legislation which their chair asked for,” said Christopher Lynn, a TLC commissioner from 1996 to 1998. “In other words, the TLC did everything else except level the playing field and hold Uber accountable.”

The law sought to provide greater transparency of companies, such as Uber and Lyft, whose fleet of cars had risen exponentially in the city beginning in 2011 at the expense of traditional yellow taxi drivers and livery black car taxis, leading many of these drivers to fall into bankruptcy and despair. There were several taxi-industry suicides before the law’s passage.

For taxi medallion owners, the TLC’s lack of enforcement is nothing short of a betrayal of its mission to regulate and protect the yellow cab medallion industry.

“I expected the TLC to enforce the rules that they’ve had on the books for many years, which would’ve prevented many of the excessive for-hire vehicles from ever being on the road,” said Carolyn Protz, a taxi medallion owner. “The TLC hasn’t done anything. They haven’t held the app companies to the rules they were supposed to create.”

More than that, industry insiders say, the city could be leaving money uncollected during an extreme budget crisis. The penalty for companies operating without the High Volume For Hire Service license is a $10,000 fine each day the violation is in place.

The law explicitly states it is unlawful for these types of companies to operate unless licensed by the TLC.

But emails and legal documents obtained by Crain’s show that Uber and Lyft have been operating in New York without an approved high-volume license for two years.

During a July 23, 2019, public hearing before the TLC, Uber noted that the status of its high-volume license, which had been submitted to the TLC, was still pending. That September the TLC testified that it was in the process of implementing the law.

Not much changed nearly a year later.

An email exchange from June 18 of this year between Kala Wright, the TLC's deputy commissioner for policy, and Protz confirmed that Uber, Lyft and Via were still operating without an approved license as late as 20 months after the City Council passed the bill.

“Hi Carolyn, thanks for following up, the [high-volume] licenses are still under review, all of the company's (sic) have submitted their application materials,” Wright wrote at the time.

Lyft confirmed that it has not heard back from the TLC on its application.

"The TLC has yet to issue formal [high-volume] licenses or provide indication of when those should be expected," Lyft representative Campbell Matthews said.

Uber and Via did not respond to a request for comment.

For its part, the TLC has said that it’s done nothing wrong, but the agency failed to make clear why it has delayed subjecting the ride-hail apps to the law.

“Uber and Lyft are indeed fully licensed and will remain so while their HVFHV applications are being processed,” said Allan Fromberg, a spokesman for the TLC, using the designation for high volume for-hire vehicles.

Medallion owners, such as Protz, can’t understand how the TLC could turn a blind eye to the regulations established under a new law explicitly passed to level the playing field among all drivers and ride-share companies.

“The TLC is really rogue. They just ignored what they were told to do by the City Council,” she said.

Baked into Local Law 149 are a few different licensing requirements that Uber and Lyft must comply with to be licensed under the law. These requirements include a list of bases through which the companies will dispatch trips, a business plan with trip volumes, a vehicle count, accessibility requirements and an impact analysis.

The impact analysis assesses the effect of a prospective licensee’s operation on the environment and documents the applicant’s impact on traffic congestion, public transportation, private motor vehicles and noise in the city area.

It is thought that these regulations—notably a comprehensive account of the environmental impact tens of thousands of Uber and Lyft vehicles have on the city's environment—would complicate, if not prove detrimental, to the ride-share companies.

City Council Speaker Corey Johnson said agency representatives testified to the council in September 2019 that they were working on implementing the law.

“The council passed laws regulating for-hire vehicles with the expectation that the TLC would implement and enforce them as soon as possible, so it's frustrating to hear this is taking so long,” Johnson said. “I urge the TLC to take action quickly to fix this situation and comply with the law we passed.”

Bronx Councilman Ruben Diaz Sr., who introduced the bill, has called on Attorney General Letitia James to investigate what he said is lack of oversight by the TLC.

Councilman Ritchie J. Torres, who chairs the Oversights and Investigations Committee, said he was “deeply disturbed” by the allegations that the TLC is circumventing local law.

“No agency gets to pick and choose the laws it wishes to follow,” Torres spokesman Raymond Rodriguez said. “The TLC has an obligation to faithfully follow all local laws, and Local Law 149 is by no means an exception.”

For medallion owners, who have seen their livelihood altered in the face of the ride-share onslaught, the failure of the TLC and the de Blasio administration to implement Local Law 149 has dramatically altered the city’s transportation landscape.

“They damaged public transportation, increased pollution, increased congestion, destroyed a $15 billion taxi medallion franchise and created poverty among all the drivers,” Protz said. “And they’ve done all that for nothing.”