Up from Underground: Demand Drives Dollar Van Industry

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(New York, NY – Lisa Chow, WNYC) This week presented a turning point for a New York industry that has operated largely underground. Mayor Michael Bloomberg and Taxi and Limousine Commissioner David Yassky want private commuter vans, also known as dollar vans, to start picking up passengers along bus routes that will be eliminated this weekend because of the MTA’s financial woes.

The commuter van industry has thrived in the shadows for a number of reasons. (Listen to Lisa Chow's audio segment here.)

A dollar van on Bushwick Avenue

A dollar van on Bushwick Avenue (Photo by Stephen Nessen)

There’s strong demand. People are constantly looking for easier ways to get around the city, and unlike the public transit system, private vans can respond quickly to that demand. Heavy government regulation of passenger vehicles like commuter vans has pushed the industry underground, but light enforcement of that regulation means doing business underground is often less costly than following the rules.

“It's like the Wild Wild West,” says Juan Perez, CEO of Highbrid Outdoor, a company that sells advertising in the vans.

“I can get a van today and operate for weeks and months on end without anybody asking me a question.”

Perez says today lax oversight is bringing lots of people into the business, but its origins come from immigrants. “The commuter van industry actually spawned out of some of the countries in the Caribbean where this is their form of mass transportation. They don’t have city buses,” he says.

It can be hard to notice dollar vans on the streets because they look just like regular vans, but they’re a critical part of the informal transit system, especially in Queens and Brooklyn. Most dollar vans, which actually cost $2 a ride, operate illegally and are not licensed by the Taxi and Limousine Commission, which regulates private commuter vans. But even the legal vans constantly break TLC rules by riding along routes that are already served by subway or bus lines and responding to people who wave them down.

Winston Williams entered the business as an unlicensed driver almost 20 years ago. He’s been picking up passengers on Flatbush Avenue since 1992, often working 12 to 14 hours a day and six to seven days a week. He says he transports 75 to 100 people a day.

“I like being self employed,” he says.

Williams says for every one legal van, there are five illegal vans on Flatbush.

It’s the middle of the afternoon, and he’s heading north toward downtown Brooklyn. The riders all live in Brooklyn. One woman's heading to the bank. Another's going to pick up her husband from the hospital. They’re going to school, work. One guy’s car broke down. There are 10 people in the 14-passenger van. “I need four more riders,” the driver says.

Willliams says a lot of drivers are satisfied carrying five riders during a three to four mile stretch, because at $2 a person, the driver’s making $10, about the same amount a taxicab makes driving that distance. But Williams isn’t satisfied operating at 1/3 capacity. “I have 14 seats. And I want all 14 in here.”

So he can make $28.

With the city’s new plan to expand commuter van service to areas and passengers most affected by MTA service cuts, Williams could make more. The TLC hasn’t given details about where the vans will operate, or when they’ll start picking up riders, but the vans will have designated pick up and drop off locations and be marked in a way so passengers know they’re part of the program.

And the TLC has pledged to step up enforcement of illegal practices.

Bus cuts go into effect on Sunday. Dollar van operators say they are already out exploring their new routes.