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January 29, 2015 NEW YORK CITY TAXI AND LIMOUSINE COMMISSION PUBLIC HEARING AND OPPORTUNITY TO COMMENT ON PROPOSED E-HAIL RULESTestimony by Council Member Ben Kallos for District 5 representing the Upper East Side, Midtown East, Roosevelt Island and El Barrio concerning TLC’s proposed rules to establish permanent e- hail rules for New York City. Good morning Chair Joshi and commissioners of the Taxi and Limousine Commission (TLC). I am Council Member Ben Kallos for District 5, representing the Upper East Side, Midtown East, Roosevelt Island and El Barrio. Thank you for this important hearing and the opportunity to testify on the TLC’s proposed rules to establish permanent e- hail rules for New York City. For my constituents, taxicabs and livery cars are not a luxury, but an essential part of the public transportation network. According to the “2014 Taxicab Fact Book,” yellow cabs provide an average of 485,000 trips per day to 600,000 passengers moving 236 million passengers per year with 90.3% of those pickups happening in Manhattan. With a single subway line that is over capacity and bus service rated the worst in the city by the Straphangers Campaign, the Upper East Side relies on yellow cabs for public transportation. My constituents use taxicabs to go to work, meetings, doctor appointments, and everything else where transportation is essential. If you don’t believe me, just try and catch a yellow cab in my district one morning. For many decades the symbol of transportation in New York City has been the yellow cab, and the symbol of the fast pace of New York City life has been a person raising his or her hand and jumping into a cab to get quickly and securely to their destination. The New York City taxi system, which this body has done so much to improve over generations, is an accountable system which provides reliable, safe transportation at set affordable and predictable prices. Taxi drivers and Taxi owners are accountable to this agency, and their information and data are transparent. The medallion system has been copied throughout America and throughout the world. It brings not just accountability to the public but, for those who play by the rules, a chance earn a living and build wealth. Technology has recently disrupted the transportation industry bringing many advances and efficiencies. The current rules as proposed by the TLC recognize the need for these efficiencies and innovation. To that end, I support these rules as a good start for a government that must adapt to disruption improving services for every New Yorker. Nearly two years ago, TLC authorized a pilot program to offer e-hails to New York City’s passengers. According to a report by the TLC which evaluated this program, even under the limited scope of the pilot, an average of 7,000 e-hails were received by participating drivers each day. Not surprisingly, 66% of these came from northern Manhattan and the outer boroughs. This data proves that most areas of our city could benefit substantially from an expanded e-hail marketplace to supplement our transit options, particularly areas where cabs are not ubiquitous and street hailing is difficult. As we now seek to finalize rules for a permanent e-hail marketplace, we must ensure fair access, fair competition, and fair pricing. While the rules as a whole take us in a positive direction, two key components are missing: an Open API and a New York City TLC e-hail app. I have proposed legislation which incorporates both, but I urge this body to seize the moment and adopt these changes while supporting legislation to codify the regulations into law. A universal app is only possible through a New York City TLC e-hail app with an Open application program interface (API) that would allow both the city’s app and any third party app access to e-hail all 13,637 yellow cabs and 6,000 green cabs through a single button on their T and L-PEP system regardless of the app used by the passenger. The Taxi & Limousine Commission must have its own app so that the riding public has the option of going through a TLC based system. Only by creating a universal app with an Open API can we ensure that there will be a critical mass of vehicles ready willing and able to answer a call. This would not prevent the Ubers or Halos or Lyfts of the world from doing business. It would, however, create an alternative through the already great yellow and green infrastructure. The rules as proposed do require T and L-PEP providers to “develop and maintain an application programming interface (API) enabling developers of E-Hail Apps to integrate their apps directly into the T and L-PEP data collection, and credit card transaction processing systems.” While the integration of an e-hail app into the T and L-PEP systems is a needed improvement to the current system, an Open API is the only way to ensure fair competition in the e-hail marketplace. Under existing and proposed regulations, passengers and drivers are app dependent providing a market advantage to the app with the biggest fleet. An Open API connects all passengers to 19,637 cabs that may choose to accept e-hails leveling competition so the best app can win, and creating a win-win-win for app developers, drivers and most importantly passengers. Currently, five apps are permitted to participate:
A passenger could install Curb, but good luck finding a driver using their passenger app. That passenger is most likely going to try the Curb app once, see that it provides no drivers, then move on to Uber, and so much for competition. Don’t get me wrong, I hope that all five are successful, but only an Open API provides a truly level playing field where new apps can compete. While on the Taxi Dave Show on WOR 710AM, a yellow cab driver called in to share that he had picked up a passenger via street hail while both he and his passenger were attempting to find an e-hail using Uber. Regulations fail to require that apps display all available yellow and green cabs, while protections provided under my legislation would require an app to display all vehicles. This prevents an app from hiding eligible yellow and green cabs in order to steer passengers to their own vehicles where the app company can earn a greater profit. According to the Washington Post, Uber has also used its resources to hire armies of lawyers and lobbyists to resist any regulations including data sharing. An open, competitive, and fair e-hail marketplace requires a free to access and use New York City TLC e-hail app and Open API. This minimum baseline, which can either be built or licensed, will protect passengers from unseen fees and surge pricing, ensure valuable trip data is made available to TLC, and keep competition alive. In a Christmas Eve email to customers, Uber announced it was charging customers a $2 “booking fee” to use its e-hailing app for yellow and green taxis. Regulations proposed by the TLC fail to regulate anti-competitive practices that disincentivize use of yellow and green cabs in favor of using an apps own fleet. The regulations must adopt the same protections as proposed under my legislation which caps fees on apps using the Open API and provides a free option to every passenger through a New York City TLC e-hail app. Uber continues to defend its practice of surge pricing, including charging 2.8 times the normal fare to New York City passengers during the recent winter storm when the MTA was shut down leaving many stranded. Meanwhile, according the 2014 Taxicab Fact Book, the average fare for yellow cabs was only $13.40, not $37.52, or 2.8 times that fare. The regulations fail to address surge pricing while protections proposed under my legislation would guarantee passengers a metered fare no matter weather conditions or demand. Lyft has accused Uber of “bait and switch” tactics. The regulations fail to address bait and switch tactics while protections proposed under my legislation would forbid apps using the Open API from discriminating against yellow or green cabs as well as from influencing passengers to use a vehicle that is not yellow or green. This would stop apps from hiding yellow and green cabs, from displaying splash screens soliciting passengers to use their other vehicles with or without incentives, or other anti-competitive tactics. Given the vigorous resistance to regulation, TLC’s proposed rules, unfortunately, do not provide the city with the tools it needs to ensure regulatory compliance. While I appreciate that the TLC has adopted so much of my legislation as part of your new proposed regulations they do not go far enough, and are missing the core components of an Open API and NYC TLC e-hail app. It will not have the same strength and permanence of the legislation I have proposed. Codifying these rules into law, along with the Open API and NYC TLC e-hail app, and adding penalties for non-compliance, will force app developers to adapt in ways that ultimately benefit passengers. I have enclosed a copy of the legislation. In addition to passing new regulations as amended with the feedback I have provided as well as others, I hope to have a resolution from the TLC in support of my legislation which would not only codify these regulations, but provide additional protections. I’d like to close by commending the TLC on the work they have done thus far to foster an e-hail marketplace in New York City. I hope it will continue its forward looking approach by adopting these changes so New Yorkers are able to access a competitive and fair market place as well as providing the TLC with the ability it needs to reign in bad actors.
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