Authorizes the public sale of taxicab licenses in the city of New York

Reasons for support

This bill would allow the City to implement a taxi plan that will more effectively service all five boroughs of New York City. The creation of this plan was prompted by two persistent mobility problems:

(1) Nearly non-existent taxi availability in underserved areas of the City (e.g., boroughs outside Manhattan); and

(2) Insufficient taxi supply in Manhattan's central business district.

This legislation would seek to remedy these two problems by providing the TLC with the authorization to issue 6,000 taxicab licenses specific to the Bronx, Brooklyn, Queens and Staten Island, which, in addition to dramatically expanding taxi access for New Yorkers in all five boroughs, will provide new meaningful, legal entrepreneurial and employment opportunities for livery bases and drivers. The bill would also provide authorization for 1,500 new, unrestricted taxicab licenses, in response to increased demand within the central business district.

Finally, the issuance of these medallions would generate new revenue for the City of New York for several years, beginning in FY 2013. (The issuance of new medallions, which also requires City Council legislation and follows environmental review - and which therefore could not begin until FY 2013, even assuming prompt passage of this legislation - is generally phased in over several years.)

Taxicab Licenses Dedicated to Underserved Boroughs by Yellow Taxis

Currently, yellow taxis with medallions issued by the TLC are the only vehicles authorized to pick up passengers by street hail in the City. Liveries and other vehicles operated for hire can pick up passengers only by prearrangement. According to recent GPS data collected by TLC, 97% of all yellow taxi street hail pickups are in Manhattan or at La Guardia or JFK airports. However, 80% of the City's population (approximately 6.7 million people) lives outside Manhattan, and there is demonstrated demand for street-hail service in their neighborhoods.

When TLC observed passengers hailing a ride on the street at various locations outside Manhattan, it counted 65 street hails per hour at Mermaid and Stillwell Avenues in Brooklyn, 39 per hour at Jamaica Avenue and Parsons Boulevard in Queens, and 19 per hour at Grand Concourse and 149th Street in the Bronx. Because yellow taxis were unavailable at these locations, all street-hail demand was met (illegally) by livery vehicles. Yellow taxis are, of course, authorized to pick up at these locations, but nearly all yellow taxis currently choose to serve Manhattan's central business district rather than these locations.

As a result:

* Passengers in locations outside the Manhattan central business district or the airports are, in effect, only legally able to obtain a ride by calling ahead to prearrange a ride with a livery base. As a result, otherwise law-abiding residents who need street-hail service, together with the livery drivers who pick them up, are put in the position of routinely violating the law.

* The street-hail service residents obtain from liveries currently lacks key features of yellow taxicab service:

o Fares, determined in a livery street-hail pickup by haggling between the driver and the passenger (who is often uncomfortable with this arrangement), are not metered or otherwise regulated and leave passengers vulnerable to over-charging.

o Licensed livery vehicles are also difficult to distinguish from unlicensed vehicles, so that many passengers seeking to hail a livery on the street are exposed, without their knowledge, to uninsured and possibly unsafe vehicles and to drivers with unknown safety records.

o Most livery vehicles are older than taxicabs, have no GPS locator (useful for enforcement purposes and in the recovery of lost property), and do not offer passengers the convenience of paying by debit or credit card.

This bill would remedy these problems by authorizing licenses to taxicabs that have the major features of yellow medallion taxicabs (meters, credit card readers, GPS locators, distinguishing markings), but are dedicated (through a restriction in their license) to picking up passengers in underserved areas of the City.

These new taxis would not impair or interrupt other types of for-hire service. Existing livery vehicles would continue to serve the established market for prearranged pickups. Existing yellow taxis would continue to serve the overwhelming demand for street-hail pickups in Manhattan and would also continue to be permitted to pick up street hails city-wide. The new taxicabs dedicated to underserved areas would meet the demonstrated high demand for street hail pickups in areas outside the central business district while providing the same safety, convenience and service enjoyed by people hailing a taxi in Manhattan.

Additional Unrestricted Taxicab Licenses

New York City currently has 13,237 yellow taxis. 54% of New York City households do not own a car and rely heavily on public transportation, yellow taxis and other for-hire vehicles to make their daily trips. Yellow taxis are particularly essential to the 1.6 million residents of Manhattan, where only 24% of households own a car. Taxis are also used commonly by the 2.3 million people who work in Manhattan each day and the 48 million people who visit the city each year. New York City taxis provide approximately 500,000 trips each day.

As compared to other cities that rely heavily on public transportation and taxi service, New York's taxi supply is fairly low. New York City's 8.4 million residents share 13,237 taxis. This yields approximately one taxi for every 630 residents. In contrast, London has 22,000 black cabs and 7.5 million residents, or one taxi for every 340 residents. Even in Chicago, where there is a significantly higher car ownership rate (71%) than in New York City (46%), there is approximately one taxi for every 385 residents.

That there are fewer taxis per person might not necessarily be a problem if efficiencies, such as requiring each taxi to work longer hours, compensated for the fact that there are fewer vehicles per person. However, despite the workhorse nature of the New York City taxi industry - in which about 75% of taxis operate for two 12-hour shifts nearly every day, and the remaining 25% operate for one 12-hour shift nearly every day - there is not a sufficient supply to meet passenger demand.

Passengers frequently report difficulty locating an unoccupied taxi when they need one. In particular, passengers report - and GPS data on taxi utilization seems to support - shortages in the late afternoon, weekend evenings, and instances of bad weather. Since 2009 (when TLC began collecting GPS data), the number of trips per cab per day increased from 36.9 in quarter one Q1 2009 to 38.5 in Q1 2010 and 39.0 in Q1 2011. The average number of hours each day a cab was occupied also increased. In Q1 2009, each taxi was hired 6.8 hours each day. By Q1 2011, the number of hours each cab was already occupied - meaning it was unavailable for a hail - had increased 13%, to 7.7 hours.

To reduce the occurrence of taxicab shortages, this bill would authorize the issuance of 1,500 new, unrestricted medallions - an increase of 11.3%. Organizations representing existing medallion owners support this increase, which would improve the access New Yorkers and visitors have to taxicabs without significantly impacting the economics of the industry, congestion or air quality.

As in the past, the City requests authority to sell these new medallions at the market rate, in order to avoid impairing the value of existing medallions.

Opportunity for Livery Bases and Drivers

Under this proposal, the livery industry will be able to expand its legal business portfolio beyond prearrangement, to provide high-quality street hail service. Livery drivers would have several options for participating in the legal street-hail business:

* Livery drivers could become medallion owners, operating as independent entrepreneurs owning their own vehicle and medallion. The City will coordinate special financing through sister agencies, seller financing, and coordination with private lenders to create access to affordable capital.

* Livery drivers could lease a medallion and use it to operate the vehicle they already own. The owner of a borough taxi could bring in an estimated $65,000 each year in revenue through single-shifting and $80,000 if he or she leases to a 2nd-shift driver.

* Drivers who do not want to invest in a medallion or a vehicle could find new employment opportunities within taxi fleets that will need more drivers for both borough taxis and regular taxis.

Livery bases, meanwhile, would have the opportunity to become fleets or agents, managing both regular and borough medallions.

Taken together, both the issuance of a new class of licenses for underserved neighborhoods and of new, unrestricted medallions, as authorized by this legislation, would substantially improve the ability of City residents and visitors to get where they need to go quickly and easily, without having to own a car, and would make living in or traveling to New York City more affordable, sustainable and enjoyable.

Accordingly, the Mayor urges the earliest possible favorable consideration of this proposal by the Legislature.