 |
IN FOCUS |
|
by Matthew W. Daus, Esq. |
||
One of the hottest topics in Albany, NY this year is whether the State will legalize the operation of Transportation Network Companies (TNCs), and if so, what will the new law look like? This so called upstate legislation could be the beginning of the end of the regulatory paradigm throughout the state and in NYC as we know it.
The current bill NY State Governor Andrew Cuomo is pushing will allow Uber and Lyft to significantly deregulate the industry in upstate New York creating safety issues for passengers and the decimation of small taxicab and limousine businesses everywhere. It will also render NYC’s Taxi and Limousine Commission defenseless to stop illegal pick-ups in NYC.
While taxicabs in NYC, as well as the incumbent industry in Nassau, Suffolk and Westchester counties will feel the pain, the livery and black car industry in NYC could be completely overrun and we may be facing the closure of many For-Hire Vehicle (FHV) businesses.
In addition, all versions of legislation introduced and pending create an "uneven playing field" between upstate limousine and taxicab businesses, as TNCs will be allowed to operate at less cost and with less regulation. Many upstate small businesses may go under water usurping the job creation goal of the TNC bills.
The Governor has made the legalization of TNCs in upstate New York a priority and part of his plan to jump start the upstate economy. In late 2016, during the holidays,the Governor made a major failed push to hold a special legislation session,[1] with no public hearings or floor debate, to tie the passage of the TNC bill - as one of several "quid pro quos" - to a legislative pay raise.[2]
In his State of the State speech in Buffalo,[3] the Governor called for the enactment of TNC legislation to spur economic development in upstate NY.[4]A few days later, the Governor presented his TNC bill as part of his executive budget. Among some of the provisions in this "poison pill bill" are:
Senate Republicans recently passed an upstate TNC bill (S.4159) by a 53-5 vote on February 6, 2017,[6] sponsored by Senator James Seward, an upstate Republican. [7] Senator Seward’s bill is similar to the Governor’s, but differs in that it would not exempt trip records from disclosure under FOIL and would impose a lower 2% assessment on TNC trips.
State Senator James L. Seward (R/C/I- Oneonta)
The Governor’s bill categorically exempts TNCs and TNC driver records from disclosure under FOIL or "to a third party . . . without prior consent of the TNC. . . ." Based upon recent history, requiring TNCs such as Uber and Lyft to consent to release this information is tantamount to a denial.
Just recently, Uber and many others strenuously objected to the adoption of a recent NYC Taxi and Limousine Commission (TLC) rule to combat driver fatigue because of the requirement that they provide drop-off data. [8] It may be impossible for the TLC and other regulatory agencies to enforce new upstate TNC laws without TNC records.
The Governor’s unprecedented proposal eliminates transparency created by "good government" Sunshine laws enacted after the Watergate scandal under President Nixon. These laws allow most government records and communications to be disclosed to the media and the public.
However, the Governor’s proposal may actually also prohibit government agencies like the TLC from accessing such information to fulfill its core mission of protecting the public.
This bill is a blueprint for deregulation and little or no enforcement, and is possibly one of the worst pieces of legislation introduced in the history of for-hire ground transportation regulation.
The Governor and Senator Seward’s proposals will allow TNCs to drop off passengers in NYC, but would prohibit point-to-point transportation within NYC, or pick-ups in NYC to destinations outside NYC. Since TNCs would not be required to have special plates, like other FHVs, it may be a logistical nightmare for enforcement to identify straight plate TNC vehicles attempting illegal pick-ups while in NYC.
The NYC TLC already faces staffing and legal challenges in enforcing existing laws against unlicensed FHVs, and may not be able to effectively keep stealth upstate TNCs out of NYC. Without stringent and effective enforcement (including significant penalties), the upstate TNC bill may put NYC TLC-licensed FHV companies out of business as they will face difficulty competing against services with less regulatory costs.
As mentioned above, enforcement will be difficult as trip data that existing NYC FHV companies and taxicabs must already provide to regulators may be exempt from disclosure under the state TNC law for TNCs only. Also, case law now prohibits the previously long standing practice of seizing or confiscating unlicensed FHVs [9] and law enforcement personnel may be prevented from legally stopping many TNCs picking up passengers.
Administrative stops may not be permitted for personal motor vehicles without commercial/license plates absent an alleged traffic or other civil or criminal violation. Envisioning a TNC car stop where TLC inspectors may need to ask passengers to see their smartphones would be awkward and unworkable. The only other way to effectively police the so-called upstate/NYC border would be to obtain data from TNCs and geo-fence TNC vehicles.
Assembly member Fred Thiele
Assembly member Kevin Cahill
One issue that may prevent the enactment of a TNC bill is local regulation. Traditionally, for-hire vehicles such as taxicabs and limousines, have been regulated by local municipalities. Assembly Member Kevin Cahill, who has been a primary proponent of TNC legislation and has in the past few years sponsored TNC legislation with Senator Seward, said that he wants to enact TNC legislation, but only if local regulation is preserved.[10]
Assembly Member Fred Thiele, a member of the Independence Party (who caucuses with Assembly Democrats, and represents parts of eastern Long Island), recently stated his opposition to the Governor’s proposed TNC bill because it stripped local municipalities of their authority to regulate TNCs.[11]
Both Cahill and Thiele said they would support a law to create group insurance for the TNCs, but insist that local regulation of for-hire vehicles continue. In the NY Senate, State Senator Martin Golden, one of the few Republicans from NYC, has called for "equity and fairness" in any TNC legislation. He has been a true and consistent champion in fighting to ensure a level playing field for all for-hire ground transportation businesses. [12]
As of November 2016, 41 states and the District of Columbia have enacted some form of TNC legislation.[13] While every jurisdiction»s TNC bills are different, the proposed Governor’ bill is especially favorable to TNCs allowing them to issue permits to their own drivers and exempting almost all TNC records from disclosure.
New York appears to be the ultimate battleground state this year. With the legislature’s recent dust up on the special session, and the important issues being raised about local regulation and public safety, the enactment of statewide TNC legislation may not be the slam dunk that the TNCs and the Governor anticipated.
However, prevailing thought is that some bill will pass, and the result of this legislative battle will have ripple effects for the rest of the nation and the world. Most regulatory jurisdictions look to NYC as the gold standard of for-hire regulation, as it is the only city where Uber and Lyft are subject to the same rules as other FHVs.
Hopefully, NYCs’gold will not be tarnished forever by a state law that is unworkable, unfair and unsafe. It is simply hope that will keep the upstate taxi and for-hire industry alive if any of the TNC laws pass.
