A taxi commissioner bets against rules allowing taxi apps in New York City

Hailing a cab in New York City. (Linda Beaverson via Flickr)
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Tomorrow, the city's Taxi and Limousine Commission is poised to vote on new rules that would, for the first time, allow New Yorkers to hail cabs by tapping their iPhones or Androids, rather than simply relying on the old-fashioned, hand-in-the-air method.

Taxi app developers like Hailo and GetTaxi have been eager to break into the New York City market, and these rules would enable them to do that.

If these rules pass, that is, which they very well might not.

"I foresee the rules as written not passing," Frank Carone, one of nine voting commissioners told me. "And I’m so confident of that, that I don’t think they’re going to come to the floor. If the tea leaves suggest what I am suggesting, a prudent chairman wouldn’t put them on the floor."

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Carone is one of five commissioners on the nine-member body who was chosen by the City Council. The other four members were appointed by the mayor.

Under pressure from taxi app developers, in October, the city's Taxi and Limousine Commission released a proposal for new "e-hail" rules that would legalize hailing-by-smartphone.

A full description of the rules can be found here.

The fact that the city would need to establish new rules for this sort of thing is a reflection of the peculiar makeup of the New York City livery industry.

In the city, the taxi and limousine is split between those who can respond to pre-arranged requests for service—livery and black car companies—and yellow taxi drivers, who are only allowed to pick up street hails.

It wasn't always like this. Before the Koch administration, yellow taxi drivers could respond to both phoned-in requests and street hails.

But following complaints that it was hard to find cabs on the street, Koch limited yellow cabs to street-hail service.

The livery and black car industry sprang up to offer the pre-arranged service that the yellow cabs could not.

Today, the livery industry in New York City is at a crossroads.

Yellow cab drivers like Melissa Plaut, who works with Hailo, argue that taxi apps will allow drivers to get more fares.

"If you an get an extra two passengers a day or night, that's a huge boon," she told me.

The Taxi Workers Alliance, the closest thing drivers have to a union, is also generally supportive.

But livery car businesses are fiercely opposed, because they believe that e-hails will undermine their very business model.

If a New Yorker can request a cab by tapping her smartphone, isn't that merely pre-arranged service by another name? And if taxis can now offer pre-arranged service, then how will livery car companies, which exist for that very reason, survive?

Or so the argument goes.

Carone is sympathetic. He says he'll vote against the e-hail rules because part of his charter-mandated mission, as a taxi commissioner, is to ensure the financial stability of industry licensees.

"The value of this app does not outweigh the risks inherent to hurting the businesses that already exist," he said.

Carone also worries that passengers without smartphones will be put at a disadvantage.

The best course of action, as per Carone, is launch a one-year pilot program instead.

While all of the mayor's appointees are on board with the new rules, the opposition is likely to come from the Council appointees, who constitute a majority.

The commission had no immediate response to Carone's statements.

But today, the Bloomberg-appointed Taxi chairman, David Yassky, ran an op-ed in the Daily News in which he argued that customer service trumps concerns about the health of the livery industry.

"If some passengers do choose to e-hail a taxi rather than call a car service, that means those passengers prefer the e-hail service," wrote Yassky. "That’s how the market works—and just as the purpose of government regulation mustn’t be to push customers from one business to another, neither should regulators stop customers from picking one business over another."

"We’re lucky to have the best taxi service in the country," he wrote. "And we remain the only U.S. city in which every cab accepts credit cards. But there’s room for improvement. When new technology comes along, we should embrace it."