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Legal Challenge for Taxi Hail Apps with NYC Yellow Cabs

Friday, February 15, 2013 - 06:00 PM

Listen to a conversation about why NYC Taxi innovations so often result in litigation.

The latest effort to reform and remake New York City's taxi industry has met a similar roadblock as previous efforts: a lawsuit.  Livery cab drivers have filed suit to block a rule change that was set to go into effect Friday permitting yellow cabs to accept passengers through smartphone apps.

But city officials say they're reviewing apps as planned and hope to have the system up and running soon.

In New York, yellow cabs have the right to pick up passengers who hail them on the street, but can't be dispatched by phone. Livery cabs are a different category of taxi that can only pick up passengers who call ahead to pre-arrange a pick up.

Taxi apps like Uber, HailO, FlyWheel and ZabKab allow passengers to see where they are on a map and where nearby cabs are, then with a few taps on a touchscreen, hail a cab to come pick them up. 

If the city's 13,237 yellow cabs are allowed to pre-arrange pickups through apps like that, it amounts to a violation of Taxi and Limousine Commission regulations that distinguish yellow medallion cabs from livery cabs, the lawsuit filed Thursday alleges. (Lawsuit is here)

The spokesperson said the apps could go live after March 1 when a contract expires with the companies that provide the in-cab credit card processing and other technology--a suite of services known in the taxi industry as TPEP for Taxicab Passenger Enhancements Project. The TPEP contract would prohibit payment through a third parties, like the smartphone apps. That contract was set to expire today, but has been extended to March 1.

The TLC says four smartphone app companies have already submitted apps for approval and are being reviewed for features like integration with the meter and usability by drivers so they aren't dangerously distracted by their phones while on the road.

So called e-hail apps can make finding a cab easier and driving one more profitable, according to Anil Yazici, a Research Associate at the University Transportation Research Center. "This will bring some efficiency to the search process," he says. 

Yellow cabs in New York spend 40 percent of their time empty looking for fares, especially during off-hours and outside the city center. Yazici says apps "won't eliminate empty trips, that's for sure. But surely it will reduce the empty percentages."

It could also reduce business to livery cabs. In the past just about every change in taxi rules that could cut into the business of one category of cab has resulted in court battles. Earlier this year, Mayor Michael Bloomberg's plan was blocked to add a new category of outer borough "green" cabs that would have a meter and be allowed to pick up street hails outside Manhattan's central business district. (Ruling) Another plan to convert all yellow cabs to a single new car model known as the Taxi of Tomorrow is also facing a court challenge.

The latest legal challenge against yellow cab e-hail apps goes to court on February 28th.

NYC yellow cabs are a $2.5 billion industry and carry over 500,000 passengers a day. 

 

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Comments [1]

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Mar. 07 2014 11:18 PM

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