New York City finally embraces taxi apps, come what may

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A taxi in Soho. (Ohad Ben-Yoseph via Flickr)
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Sloughing off industry concerns, New York City's taxi commission said today that it plans to take steps to allow taxi-hailing apps in the city.

"The Commission is of the view that these services—if provided in a manner that does not result in distracted driving, if they do not adversely impact the street hail service which is the core function of the yellow taxi system, and if they provide the Commission with the same transparency into trip data as is currently available—should be permitted and we will pursue rulemaking to permit them," said Ashwini Chhabra, the Taxi and Limousine Commission's deputy commissioner for policy and planning, in written testimony before the City Council on Wednesday.

It was the commission's least equivocal statement of support to date for integrating taxi apps into the city's livery system.

At the moment, several smartphone apps designed to connect riders to drivers, like Hailo and GetTaxi, are poised to get into the New York City market. 

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They have been held up in New York, among other things, by one seemingly simple but really quite controversial question: What is a street hail?  And does requesting a taxi via smartphone represent a modern-day wave of the hand or does it represent prearranged service?

If a smartphone app is just a hail by other means, then it's legal for yellow cabs to respond to them. If it's prearranged service, an industry sector reserved for livery and black car services, then it is not.

In the written testimony Chhabra submitted to a City Council hearing that focussed, in part, on taxi apps, he roundly embraced the technology, arguing that, from a customer service perspective, apps could be helpful.

"They may assist passengers late at night when there are fewer taxis cruising, or may help passengers who are a few blocks away from a main thoroughfare to extend the reach of their hail," he said. "They may also serve to reduce driver reluctance to take trips out of Manhattan, if drivers think these apps can provide them with a greater prospect of finding a passenger for the return trip."

He said, for drivers, apps could prove a boon, too.

“[D]ata suggest that taxi drivers spend a significant portion of their shifts cruising for fares, which is an inefficient use of both time and fuel," he said. "Even if these apps result in only one or two more trips per shift for a driver, this could have a material positive impact on driver earnings and could increase the efficiency of the taxi fleet.”

The Taxi Workers Alliance, the closest thing taxi drivers have to a union, worries that the apps will levy extra fees on drivers who can ill afford them.

"The regulations should specify that drivers shouldn’t have to pay a fee for this," said Bhairavi Desai, the alliance's executive director.

The livery industry has other concerns.

If passengers can "hail" cabs using their smartphones, then what possible use could they have for livery car businesses that explicitly exist to provide prearranged service?

"We do believe the bases downtown will be the most affected if the yellow industry [is allowed] to do prearranged, versus just the street hail," said Cira Angeles, a livery base owner.

To which the Taxi and Limousine Commission says: the customer comes first.

"Arguably, some of that business may be affected if we make it easier for these passengers to hail taxis," said Chhabra, speaking generally of the livery and black car sectors. "That is a consideration, but it cannot be our overriding consideration."

One industry group recently argued that allowing taxi apps will undermine the street hail entirely, favoring smartphone-owners over those who don't have them, and sending the city back to a time when hailable cabs were more difficult to find.

Certainly, the Bloomberg administration does seem to be veering back in the direction of what's known in the industry as a "dual-use" system, one that allows all drivers to both pick up hails off the street and offer prearranged service.

The city's borough taxi plan, now held up in litigation, would allow up to 18,000 livery car drivers in the outer boroughs and upper Manhattan to offer both prearranged and street hail service.

Taxi apps, meanwhile, would enable yellow cab drivers to offer something akin to prearranged service, something they haven't been able to do in the '80s.

Taxi historian Graham Hodges, a professor at Colgate University, wonders whether some of the same issues that cropped up back then, like discrimination against black riders and general taxi unavailability, will start to re-emerge.

"Sometimes it’s very hard to get a taxi," he said. "And if they’re all prearranged, then you’re really out of luck."

How the Taxi and Limousine Commission plans to deal with these, and other concerns, should become more apparent as it embarks on what Chhabra described, in his testimony, as an "expedited" rulemaking process.

"We will solicit the input of each of our regulated industries, passengers, technology providers and the Council in that process," said Chhabra. "And in the course of those conversations, no doubt, other concerns will come to the surface and we will address them together and in a constructive way."