THE METAMORPHOSIS OF FOR HIRE GROUND TRANSPORTATION BUSINESS, - PowerPoint PPT Presentation

THE METAMORPHOSIS OF FOR ­ HIRE GROUND TRANSPORTATION BUSINESS, REGULATION & TECHNOLOGY The Evolution of Limousine, Shared ­ Ride and Bus Services in New York and Beyond! Professor Matthew W. Daus, Esq.

Presented By Professor Matthew W. Daus, Esq. Former Commissioner/Chairman of the NYC Taxi and Limousine  Commission (TLC)  President, IATR  Distinguished Lecturer, UTRC  Partner & Chairman, Transportation Practice Group Windels Marx Lane & Mittendorf, LLP  President, COTA Contact: mdaus@windelsmarx.com 156 West 56th Street | New York, NY 10019 T. 212.237.1106 | F. 212.262.1215

Former Commissioner/Chair of Taxi &  Limousine Commission (TLC) for over 8 years, and General Counsel for over 5 years CEO of agency with 450+ employees and  $29 million budget 6 ground transportation industries, with  multi‐billion dollar revenues, and over 150,000 licensees Largest and most active regulator in  world, transporting 500 million passengers annually Medallion auctions raised <$200 Million  for NYC; values tripled from $200K to $750K during tenure, and has continued to rise to over $1,000,000 in 2013  Longest serving agency head serving 2 Mayors (Giuliani & Bloomberg)

 The International Association of Transportation Regulators (IATR) is a growing peer group of taxi, limousine and for ‐ hire transportation regulators, dedicated to improving the practice of licensing, enforcement and administration of for ‐ hire transportation through the sharing of information and resources.  Member jurisdictions are:  Taxi commissions and committees, solely responsible for the governance and control of taxi licensing and enforcement  Police departments and other law enforcement agencies with responsibility for taxis  Consumer protection and transportation departments of cities and regions, with responsibility for public safety and service quality  Airport authorities  State and federal agencies responsible for limousines and other motor carriers, where there are cross ‐ jurisdictional issues

University Transportation Research Center  The City University of New York (CUNY) Transportation Research Center (UTRC) is one of ten original University Transportation Centers established in 1987 by the U.S. Congress.  These Centers and their faculty members provide a critical link in resolving national and regional transportation problems while training the professionals who address our transportation systems and their customers on a daily basis.  It represents the U.S. Department of Transportation’s Region II, which includes New York, New Jersey, Puerto Rico and the U.S. Virgin Islands. Functioning as a consortium of twelve major universities throughout the region, the UTRC is located at the CUNY Institute for Transportation Systems at The City College of New York, the lead institution of the consortium.  The UTRC supports research, education and the transfer of technology in the field of transportation.

 Our Transportation Practice Group is dedicated to serving ground transportation and related businesses.  Our services include  helping clients comply with the complex legal and regulatory framework overseen by national, state, and local taxi and limousine regulators; transportation and motor vehicle departments; and other government agencies;  assisting clients in obtaining required government approvals for products, services, and procurements;  representing clients in disputes with regulators and private entities;  drafting driver affiliation and base affiliation agreements;  negotiating and drafting transportation business purchase and sales agreements;  counseling clients on corporate organization and formation;  advising clients on worker classification (such as classifying drivers as independent contractors) and related issues, including the structuring of agreements, policies, and codes of conduct;  advising clients on avoiding tort liability, minimizing sales tax and related liabilities, and insurance coverage review; and  providing strategic legal, financing, and market advice to transportation businesses.

 COTA is a limousine and black car trade associations coalition which aims to advance, support and preserve the integrity and economic viability of the for ‐ hire ground transportation industry;  to promote environmental sustainability;  to foster job growth and inter ‐ modal transportation solutions;  to support reasonable government regulation; and  to enhance customer service and explore viable advances in technology to assist businesses, passengers and the industry.

Evolution of the FHV Industry

THE EARLY YEARS: 1907 ‐ 1935  New York City’s gasoline ‐ powered taxi industry originated in 1907 when Harry N. Allen fielded 65 French ‐ imported automobiles. Providing faster service and using mechanical meters to more accurately compute the fare, the new service quickly replaced horse ‐ drawn hansom cabs. With cab stands at major hotels, Allen quickly expanded to 700 cabs.

Allen left the taxi business in 1908 in the wake of a bloody seven‐week drivers’ strike. His innovations caught on, however, as did a new word he coined – taxicab.

The taxi industry grew quickly to 15,000 vehicles in 1923, led by several large fleets such as Checker (3,750 taxis), Yellow (3,000 taxis) and the National Transportation Company (1,500 cabs).

During the 1920s and 1930s, easy entry into this all ‐ cash business led to an oversupply of taxis, resulting in traffic congestion, fare ‐ cutting wars, low driver wages, inadequately ‐ insured vehicles, and other unsafe and sometimes illegal activities. The Great Depression created an influx of unemployed workers which worsened these problems, with the number of cabs increasing to 21,000 in 1931.

To address problems of oversupply, in 1937 the City enacted an ordinance sponsored by Alderman Lew Haas that froze the number of taxi licenses at 13,595 – the number then outstanding.

 The Haas Act cap remained in place throughout the post ‐ World War II era with one exception.  In 1945, the City Council issued 183 additional medallion licenses to returning veterans who had given up their medallions during the war.

 The cap on medallions became an impediment to the taxi industry’s ability to meet New York City’s growing transportation needs.  With the post ‐ war boom, taxi drivers increasingly serviced Manhattan’s growing demand, with Manhattan ‐ originating trips accounting for 77.7% of all trips in 1963.

Concentration of taxis in Manhattan led to the creation of neighborhood car services. The map shows the average number of pickups Jan. – March, 2009.

The Evolution of the For‐Hire Industry  To fill the need for cab service in the boroughs outside Manhattan, neighborhood car services, or liveries, began to operate outside the Manhattan central business district, especially in New York City’s lower ‐ income neighborhoods.  Though not regulated by the City government, these operations were legal provided they operated only by pre ‐ arrangement.  Liveries were a source of contention from their birth. While many elected officials defended them as community businesses providing needed transportation, the taxi industry attacked them as unregulated, unsafe, and encroaching on taxis’ rights.

The Evolution of the For‐Hire Industry  Despite the controversy with the taxi industry, the new car service industry grew rapidly. The number of car service vehicles increased from 2,500 in 1964 to 9,300 in 1971. Thus, in 1971 the number of taxis and liveries combined (21,000) matched the previous high tide of the industry exactly four decades earlier. • In part to address these livery issues, the City Council in 1971 created the Taxi and Limousine Commission, although the TLC did not finally gain clear jurisdiction over “for ‐ hire vehicles” until 1987.

The Evolution of the For‐Hire Industry  In 1985, the TLC ‐‐ during the administration of Mayor Ed Koch ‐‐ addressed the perceived unavailability of cabs to street hail customers by banning the use of radios and dispatchers for yellow cabs to compel them to serve more on ‐ street customers.  This lead to the creation of prearranged services by black cars and luxury limousines.

The Evolution of the For‐Hire Industry  In the late 1990s, stretch limousines became immensely popular.

The Evolution of the For‐Hire Industry  In 2001, the City law was amended to give the TLC jurisdiction over vehicles with 20 or fewer passengers.

The Evolution of the For‐Hire Industry  Within the past 6 years, large SUVs replaced the stretch limousines, except for some specialized events like proms and weddings.

Definitions  FOR ‐ HIRE VEHICLE (FHV): Defined in City law as a vehicle seating fewer than twenty or fewer passengers (in addition to the driver) and providing service after prior arrangement. Under local law, FHVs are prohibited from picking up street hails.  For ‐ hire vehicles are required to be affiliated with FHV bases, which are responsible for handling any complaints about the drivers or vehicles. They charge fares based on zone systems, by the hour or possibly by the mile; they may not use meters.  The FHV industry is segmented into livery services, black cars and limousines.