NYC ponders precedent with 1-year cap on new ride-hail cars
NEW YORK — New York City’s yellow cab drivers, thrown into financial upheaval in recent years by the arrival of a veritable army of black cars picking up passengers through ride-hail apps, could be getting a lifeline from elected officials voting on legislation that would pump the brakes on Uber, Lyft and others.
In what would be a first-in-the-nation step if passed, the City Council on Wednesday is looking at a series of proposals that include a one-year cap on new licenses while a study of the industry is undertaken, as well as calls for minimum pay levels for all drivers, whether taxi or black car, and minimum fares.
The rise in the number of ride-hail vehicles, from about 65,000 in 2015 to 100,000 now, has been dizzying. For supporters, the cars have become a vital part of the city’s transportation network. For critics, they’ve added to severe congestion on city streets and caused financial chaos for yellow cab drivers and increasingly for ride-hail drivers who complain the competition for fares is cutting into their incomes.
The roughly 13,500 yellow cabs each have a medallion, the license that allows it to be operated. For years, the medallions were a limited commodity and seen as a ticket to guaranteed income, a solid investment that many owners willingly borrowed huge sums against for home mortgages or schools loans.
Medallion worth drops: As recently as four years ago, the city was selling medallions for more than $1 million. But the floodgates opened by the entrance of ride-hail apps has brought the value of the medallions down sharply, to $200,000 or less, and also reduced incomes for cab drivers who still have loan payments coming due.
The taxi medallion that Lal Singh bought for $225,000 in 2000 was supposed to be his ticket to a comfortable retirement. But Singh, despite his high blood pressure and diabetes at 62, still drives 14-hour shifts, every penny going toward the $312,000 he owes on a medallion he can’t sell “because nobody would buy it. Nobody have cash money. Nobody’s financing.”
Singh has so far resisted declaring bankruptcy as other medallion owners have. Six drivers have taken their own lives in the last year, including a driver-for-hire who shot himself in his car in front of City Hall after railing against politicians and Uber in a newsletter column posted to Facebook. “I will not be a slave working for chump change,” Douglas Shifter wrote. “I would rather be dead.”
Some of those who didn’t support a previous, ultimately unsuccessful attempt at a cap in 2015, like Council Speaker Corey Johnson, have been convinced it’s a necessary step.
“We are not against these companies operating. We think they’ve actually filled a need,” Johnson said. “We also believe there needs to be a regulatory framework in place.”
Pushback: As in 2015, the ride-hail companies are pushing back, with concerns that a cap would keep them from being able to replace drivers who leave and therefore reduce service and questions over why there is what they consider a rushed governmental process taking place. They’ve reached out to app users to ask them to make their support known to elected officials as well.
“We’re really concerned about the process and the speed with which the council is trying to ram this through,” said Joseph Okpaku, vice president of public policy at Lyft.
Uber spokesman Josh Gold said the company wasn’t opposed to some of the proposals, but the cap on licenses is a problem.
“Setting an artificial number that we believe will only serve to harm outer-borough New Yorkers isn’t the way to regulate,” he said.
Taxi drivers and their advocates are glad to see the legislation.
“There has to be a pause button that’s going to give people some breathing room,” said Bhairavi Desai, of the New York Taxi Workers Alliance.
But those against the cap say it would be a step back. Uber and Lyft have gotten the support of civil rights activists such as the Rev. Al Sharpton, who have long criticized the yellow cab industry for discrimination and profiling of minorities.
“They’re talking about putting a cap on Uber, do you know how difficult it is for black people to get a yellow cab in New York City? We need to stand up for US,” Sharpton said on Twitter.
Upheaval: The level of upheaval in the taxi and hired car industry hasn’t been seen on this scale since the first half of the 20th century, when the medallion system was put in place to deal with issues of competition, said Graham Hodges, a professor at Colgate University who has studied the industry’s history and even spent a few years driving a yellow cab.
The medallion system worked adequately for a long time, but there were real flaws, he said, pointing to issues such as concerns over racial profiling and adequate demand.
“That made it easy for Uber, Lyft and the others to come in, say, ‘We’re going to provide a much better service,’” he said.
“They were able to exploit the flaws in the taxi industry. That doesn’t mean those flaws couldn’t be remedied without destroying the system.”