Empty Uber & Lyft Vehicles in Manhattan May Face NYC Taxes
A new report commissioned by City Council suggests charging Uber and Lyft 11 cents per minute when drivers don't have passengers during peak hours and 5.5 cents per minute during off-peak hours
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A City Council-supported report by transportation and traffic analyst Charles Komanoff suggests charging Uber and Lyft a per minute tax for idling vehicles in Manhattan’s main business districts. The report concludes rideshare companies are partially responsible for increasing congestion in Manhattan due to the addition of thousands of for-hire vehicles that idle while they wait for ride requests. To combat the congestion, Mr. Komanoff suggests charging high volume ride-hail companies, such as Uber, Lyft and Via (note: not drivers), 11 cents per minute when driving without a customer during peak travel hours and 5.5 cents per minute during off-peak hours in central Manhattan. Komanoff believes that the surcharge would reduce vehicles in Manhattan’s core “taxi zone” by 10% and add up to $80 million to the City budget. The rules would not apply to yellow cabs.
“Stockpiling empty for-hire vehicles in Manhattan is a classic ‘externality’ that gives a slight convenience to Uber and Lyft customers by taking time and efficiency from the public…The modest empty-vehicle charge proposed in the report is an equitable way to fix this imbalance.” - Charles Komanoff, transportation and traffic analyst commissioned by City Council in 2019 to come up with a way to reduce the stockpile of unoccupied for-hire vehicles in the main taxi zone of Manhattan
Crain’s New York also revealed some interesting data related to Uber’s impact on the for-hire transport market in NYC. For example, in 2017 alone Uber cars traveled nearly 35 million miles across four Midtown transportation zones, including 8.4 million miles of cruising without passengers. Today, according to Crain’s, FHVs associated with the rideshare apps account for 32% of miles traveled in Manhattan’s Central Business District (CBD) with taxis only accounting for 19%. However, that figure should be put into context given there are currently over 80,000 FHVs primarily used for NYC rideshare vs. 13,587 yellow cabs.
“They’re like that movie, The Blob, the pink stuff eating away at everything”- Christopher Lynn, TLC Chair from 1996 to 1998
City Council Speaker Corey Johnson voiced support for the idling tax, with an Uber spokesperson arguing the policy already effectively exists and a Lyft spokesperson stating the policy is not representative of the market given the impact of COVID 19.
“As we gear up for the implementation of congestion pricing and continue to fight for safer streets, we need experts like Komanoff to be on the forefront of policy design to ensure the city’s efforts are both effective and enforceable, without burdening drivers struggling to make ends meet” - City Council speaker Corey Johnson
“The City Council already passed this policy nearly two years ago, and it puts the money into drivers’ pockets” - Uber spokesperson Harry Harfield
"This particular study is outdated and doesn't reflect the impact COVID-19 has had on NYC, which is why we encourage the city to better understand how existing rules are impacting New Yorkers before enacting more regulations" - CJ Macklin, Lyft
Our Thoughts
If the idling tax is adopted it will continue the trend of “re-professionalizing” the NYC for-hire transport industry. Unlike other markets, where rideshare companies essentially created a new ubiquitous taxi service, NYC has always been a market where taking a taxi was a norm. Outside of the ability to hail a taxi on your smartphone, one of Uber and Lyft’s biggest disruptions to NYC’s for-hire transport market was their ability to change a highly regulated industry, consisting of mostly full-time professional drivers to one that looked more similar to an unregulated rideshare market.
What do I mean by this? Before Uber and Lyft came to NYC, most TLC drivers were full-timers and could earn a healthy middle-class wage due to the medallion system (i.e. limits on vehicle supply), commercial licensing requirements, and the need to commit to the industry full-time (i.e. would be difficult to find a garage that leased a yellow cab for only a day). When rideshare companies came to NYC, the generous driver and passenger incentives, the ability to own your own vehicle, and the flexibility to work whenever you wanted essentially led to the creation of a large number of part-time drivers. Given the tremendous demand growth, in part driven by fare subsidies, many drivers only worked a few days or less than 15 hours per week. The rise of the part-time driver led to a surge in for-hire vehicles as many bought the vehicle for both personal and commercial use (i.e. only worked Uber on Saturday night).
With the cap on FHVs, driver minimum pay requirements, and now a potential tax on idling rideshare vehicles you are basically seeing the City and TLC create a system that promotes the full-time driver (this is what I mean by “re-professionalizing”). Before the pandemic this was already unfolding, when Uber and Lyft stopped accepting new drivers due to the minimum pay laws. The companies, as any TLC driver will tell you, effectively began rewarding drivers based on the number of trips they completed (i.e. incentivizing full-time work so they could meet the new pay requirements). Finally, there also appears to be some politics at play given yellow cabs are excluded from the rules. It’s not immediately obvious why yellow cabs should be given the right to idle vs. other FHVs, except to specifically help the yellow taxi industry recover.
Link to Crain’s NY article
AutoMarketplace.com NYC covers the for-hire transportation industry and automotive news. Check out AutoMarketplace.com on YouTube ▶️
Empty Uber & Lyft Vehicles in Manhattan May Face NYC Taxes
Yellow cab do not sit idle on the streets of new york. Yellow cab cruise for fares. Unlike FHV where they sit on every corner like cockroaches. Parked in no standing, hydrants, turning lanes. Basically everywhere. All the city has to do is enfore there own laws - like anti idling laws
The New York City Administrative Code, Title 24, Section 24-163 establishes that no person should allow the engine of a motor vehicle to idle for longer than three minutes while parking, standing, or stopping. ... Vehicles whose engine is used to operate a loading, unloading or processing device.