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The Race for E-Hailing

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City Council Proposes Bill Targeting Uber and Other “E-hail” Services.

March 6th 2018

new cars close up

The NY City Council has proposed a new bill targeting Uber, Lyft and other app.-based car services, Crain’s reported.

The bill was written by the new “For-Hire Vehicle Committee” of the City Council and will include tighter regulations and higher fees, including a new $2000 yearly fee for each car. App.- based drivers work independently using their own vehicles and obtain passengers via a smart phone app.

These services are also referred to as “e-hail” since the one requesting the car simply goes online to do so instead of hailing a cab in the street.

The fee is designed to slow the growth of these services, essentially pricing out some drivers. The app-based companies have come under scrutiny as their rapid growth has contributed to record levels of congestion in Manhattan while undermining the traditional hired-car industries, Crain’s reported.

Taxi medallion values have also plummeted. In the past selling taxi medallions was a giant industry in NYC, where dealers would sell medallions for as much as a million dollars. The number of medallions is capped at 135,000 in NYC, however with Uber there is no limit as basically any driver with a good automobile and driving record can sign up and jump on the app for passengers.

Many long time New Yorkers look at this effort as a “protection scheme” designed to protect the profits the City makes from the limited amount of Taxi medallions. Others point out the black car or TLC industry floods the street with cars, just as the app.-based drivers do, yet no new regulations are being proposed on the TLC industry.

The price of taxi medallions has dropped drastically in NYC; currently the price is around $186,000. Mayor de Blasio in his recent budget included $1.2 billion in expected money to be obtained by auctioning 1,650 taxi medallions from fiscal years 2019 to 2023. That’s an average price of $728,000. Most analysts believe those numbers are unrealistic as recent auctions only managed to pull $186,000 or so for each medallion.

One can speculate the regulations proposed have alternative reasoning beyond “traffic congestion”.

The bill proposes also that any new license for an app-based service base would also have to meet city environmental requirements, which essentially mimics the standards of taxi-cabs. It must be noted that every car in NYC driven by anyone already has pass emissions inspections to receive a registration sticker.

One final proposal, would force app.-based drivers to be attached to a single base. Currently, an e-hail driver working for Uber can respond to a dispatch from any Uber base. This basically would change the entire business model.

“I have seen how Uber is not regulated—that what is being demanded of other members of the industry is not demanded of Uber. The point is to make it equal and fair”, Crain’s reported Councilman Ruben Diaz Sr., chairman of the new committee saying.

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