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

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S5538-2011 Actions

• Jan 4, 2012: REFERRED TO CITIES
• May 31, 2011: REFERRED TO CITIES

S5538-2011 Memo

BILL NUMBER:S5538

TITLE OF BILL:
An act
authorizing the public sale of taxicab licenses in the city of New York

SUMMARY OF PROVISIONS:
The proposed legislation would authorize the
City of New York ("City") to enact a local law allowing the New York
City Taxi and Limousine Commission (TLC) to sell publicly up to 1,500
new taxicab licenses. Each of these 1,500 taxicab licenses would be
sold in a lot with a specified number of restricted taxicab licenses.
These restricted licenses would be subject to rules to ensure that
they provide service to areas of the city that are underserved by
existing taxicabs.

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.

S5538-2011 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                    5538

                         2011-2012 Regular Sessions

                              I N  SENATE

                                May 31, 2011
                                 ___________

  Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
    printed to be committed to the Committee on Cities

  AN ACT authorizing the public sale of taxicab licenses in  the  city  of
    New York

    THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
  BLY, DO ENACT AS FOLLOWS:


    Section 1. The city of New York may, by local law, authorize  the  New
  York city taxi and limousine commission or its successor agency to issue
  one  thousand five hundred additional taxicab licenses, provided, howev-
  er, that such licenses shall be subject to such terms and conditions  as
  may  be  prescribed  by  such  local law, and provided further that such
  licenses shall be issued by public sale.
    S 2. The city of New York may, by local law, authorize such  taxi  and
  limousine  commission, as part of such public sale, to issue a specified
  number of restricted taxicab  licenses  together  with  each  additional
  taxicab  license authorized by section one of this act, provided, howev-
  er, that taxicabs operated pursuant to such restricted taxicab  licenses
  shall  be  permitted  to  accept  passengers only in areas designated by
  local law as areas that are underserved by taxicab service, and provided
  further that such restricted taxicab licenses shall be subject  to  such
  other terms and conditions as may be prescribed by such local law.
    S  3. The licenses issued pursuant to sections one and two of this act
  shall be transferable subject to limits prescribed by  such  local  law.
  Such  local  law  shall also provide that such public sale of such addi-
  tional licenses shall be done by public auction, sealed  bids  or  other
  competitive  process,  as provided by regulation of such taxi and limou-
  sine commission. Such taxi and limousine  commission  is  authorized  to
  sell  by  public  auction,  sealed bids or other competitive process, as
  provided by regulation  of  such  taxi  and  limousine  commission,  any
  license  which  it repossesses as a result of a default by the purchaser
  under the terms of any purchase financing offered by  the  city  of  New
  York.
    S 4. This act shall take effect immediately.

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD11731-01-1