➗ How Many TLC Plates Are Drivers Getting?
Previously planned 600:400 (individuals : business entities) split of 1,000 *NEW* FHV Licenses (a/k/a TLC Plates), getting increased attention ahead of final TLC guidance & vote
NYC TLC proposal to release 1,000 EV-only licenses is becoming contentious
Medallion owners & anti-congestion advocates believe focus should be on existing fleet, while some drivers want larger allocation of new plates
Revel, which has invested millions in NYC EV charging infrastructure, also likely upset about license politics
The announcements and hearings around the NYC Taxi & Limousine Commission’s proposal to issue 1,000 *NEW* EV-only TLC Plates continue to attract voices from all over the for-hire transportation industry.
From drivers arguing for a larger allocation (even publicly accusing large leasing companies, by name, of acting as a “mafia”) to medallion owners & anti-congestion advocates confused about any release at all to Revel, probably getting nervous (and/or annoyed), about their name constantly getting mentioned - there’s a lot of opinions.
While the TLC hasn’t officially shared and voted on their final proposal, everything seems to be coming to a head before an official Commission meeting (perhaps vote 🤷♀️) next Wednesday, January 25th.
While this publication suggested ‘business entity’ plate allocations should be auctioned, while individuals should only be subject to an application process and standard fees - we understand this topic is complex. There are many genuine and legitimate perspectives, which the TLC will need to balance before acting.
Arguments From 40,000 Feet
While some of our other pieces go into greater details, below we summarize some high level thoughts on the main industry perspectives.
🤔 NYC TLC Drivers
They’ll essentially be two broad driver contingents around the new EV-only TLC Plate proposal. One group that leases their vehicles and one that controls their TLC Plate. Based on our analysis of publicly available data, ~70% of all TLC Plates are driver-controlled, while the remaining ~30% are controlled by business entities.
Although the voices on public Commission hearings or among driver advocacy groups, imply that most drivers are upset by the status quo, that view is unlikely representative of the “Silent Majority” of NYC TLC drivers. Let’s be blunt, having 100 drivers (less than 0.1% of all TLC drivers) publicly defame companies by name and accuse them of acting as a “mafia”, a very serious accusation, is not constructive. Nor do we think their view is representative of the “Silent Majority”, because the majority of drivers already control their own FHV License.
In the same breath, we also think leasing companies should be subject to more regulations, similar to ones that exist in the taxi medallion industry. Yes, drivers who lease their vehicles at this point would prefer to have a claim on their own FHV license. It should also be noted that we, and many others, would also like to have acquired many taxi medallions in 1937 when they were available for $10.
Regulations are dynamic, they adjust with time and circumstances, drivers and companies must understand this. What was meant to be, may evolve into something else and that is how laws & regulations have organically, hopefully after much debate and consideration, developed for generations. Think about Manhattan “air rights”, even the most creative mind might not have seen such an asset arising, but that doesn’t mean it shouldn’t exist. In addition, and to the previous Mayor’s credit, if there was no TLC Plate Cap going into the pandemic, the entire TLC industry may have collapsed, think 💭 about this point.
That being said, in the future, when supply and demand dynamics inevitably shift, it might be the leasing companies arguing, incorrectly, to prevent more TLC Plates being released. As we’ve stated, while we believe the TLC leasing industry could use reforms, an embrace of a “one driver, one plate” policy would spell DISASTER for the taxi medallion industry and in turn the City, given the MRP loan guarantee (see Taxi Medallion Owners section below).
Base Owners & Fleets
Many non-HVFHS black car & livery bases (i.e., not Uber or Lyft) have been adamant for some time that their industry deserves more FHV Licenses (a/k/a TLC Plates). The Black Car News, a trade publication focused on the “traditional” black car & livery industry, has written extensively on why it believes “base-specific” licenses should be issued. We’ve also given our opinion on the subject.
Remember, all bases, including Uber & Lyft, are competing for the same driver (vehicle) supply pool given NYC TLC drivers (vehicles) can work across companies (known as “cross base dispatching rights”). It also, in our view, seems very unlikely that the TLC grants a “base specific” FHV exemption, when these same bases already have two distinct advantages vs. Uber & Lyft.
NYC livery bases are exempt from 8.875% sales tax
NYC black car & livery bases are not subject to TLC minimum pay standards
We’ve personally met and know many hardworking black car & livery base owners. We know many won’t be happy with the assessment above, but sometimes telling someone the truth is better than pretending and watching them struggle.
We WANT Uber & Lyft to have competition, we WANT TLC drivers to have more options to choose from. We WANT vibrant and financially sustainable local NYC bases. However, many NYC black car and livery bases cannot attract drivers because Uber & Lyft are outcompeting them. In the minutiae there are other reasons for sure, but this is the underlying issue.
— AutoMarketplace NYC, September 5, 2022
Taxi Medallion Owners & Anti-Congestion Advocates
A simple search of our archives will reveal this publication has covered the point NYC Public Advocate Jumaane D. Williams makes above several times.
Essentially, it can be distilled into the following bullet points:
If you add more TLC vehicles, you’ll add to City congestion. Arguments that the issuance of new EV-only TLC plates would not add to congestion because drivers who currently lease from companies, would simply switch (net zero impact), neglect the fact that there are more TLC licensees (as in commercially licensed TLC drivers) than there are NYC FHV vehicles. This is almost by design, to ensure driver earnings can be protected, while also incorporating natural labor attrition in the marketplace.
If an NYC FHV license is somehow not a scarce or limited supply asset, a taxi medallion will cease to have any value and NYC TLC driver earnings will collapse. While TLC drivers and other New Yorkers may take it for granted, a lot of people want to live and work in NYC 🌆. The NYC for-hire transportation industry is likely the MOST VALUABLE taxi and for-hire transport market IN THE WORLD. If there is no regulation on vehicle supply, then all sorts of chaos can arise from immovable traffic on streets to unsustainable “starvation” wages. (See our case study for more details).
Before we end this section, London, a comparable city to NYC, has taken a different approach by making it very hard to get a commercial driver’s license to drive a black cab (equivalent of a yellow taxi), via a test known as “The Knowledge”. There has been a lot of historical controversy around “The Knowledge” and it’s worth researching that before NYC driver advocates call for a similar regulatory regime here. Also, another set of licensing standards applies to London Uber & Lyft drivers, which has perhaps resulted in some bad outcomes for that market.
In our view, New York should not make the same mistakes London has. Those mistakes were creating an outdated test that prevented many drivers from entering the for-hire transportation sector (in turn, creating an artificial central London for-hire vehicle supply shortage pre-Uber/Lyft) and having two different licensing standards for essentially the same passenger base.
Revel & Some Thoughts
Finally, EV infrastructure & transportation company Revel, may be feeling a bit of heat these days, as its name keeps getting mentioned in public hearings. Many are pre-emptively and without evidence accusing the Company of “backroom” dealings to get a large allocation of the proposed 400 EV-only TLC Plates reserved for business entities. If one does not have evidence of said “backroom” dealings, in our opinion, it’s in very poor taste to keep making such accusations, especially in public hearings.
As we’ve reported, Revel continues to grow through acquisitions and/or partnerships, and is now a Top 5 NYC base! In fact, the the whole reason the EV exemption to FHV License Pause (a/k/a TLC Plate Cap) was removed, directly related to fears around Revel’s plan to use the EV exemption “loophole”, meant for independent TLC drivers, to launch a City-wide rideshare service. The TLC had fears that Revel had plans to potentially add hundreds, if not thousands, of additional TLC-plated vehicles to NYC streets.
“It is not sustainable to allow an unlimited number of new vehicles to the road in a city that is all too familiar with the choke of traffic congestion…What we will not allow is the opportunity for another corporation — venture capitalists or otherwise — to flood our streets with additional cars.” - Former TLC Chair Aloysee Heredia Jarmoszuk
The previous TLC Chair & Commissioner acted quickly and in our view correctly, even as Revel’s CEO & Co-Founder Frank Reig lodged many, unfortunately uninformed, public accusations. At the time Reig said removing the exemption would, “guarantee a monopoly for the Silicon Valley ride-share giants, the status quo of gas cars and drivers without rights.” He also addressed the concerns around the prospect of Revel adding thousands of cars.
“Revel isn’t going to flood the streets with thousands of cars at once, like other operators have in the past,…In fact, we literally can’t do that. The for-hire electric fleet needs charging infrastructure, and this city has none of that.” - Frank Reig, CEO & Co-Founder of Revel
Elon Musk even commented on Twitter, confused about the why Revel (& their Teslas) was being blocked, but likely not understanding the full regulatory backdrop.
While we think Revel has every right to operate its business, has a genuine passion around the EV transition, the Company likely shouldn’t have made such public accusations against the TLC, which in our view was taking an informed and correct proactive action given the history of “too many cars, flooding the streets”. Revel stirred unnecessary conspiracy and now it is the subject of one, likely just as uninformed.
With Revel’s recent announcement of more NYC charging hubs, including the “world’s largest charging hub in the Western hemisphere”, we also think Reig’s previous commentary about it being “impossible” to add too many cars because of the lack of charging stations kindof falls flat now. That all being said, we think Revel should be applauded 👏 for putting money where its mouth is. It’s actually building EV charging hubs ⚡ in NYC.
In conclusion, if 400 EV-only FHV Licenses are being allocated to business entities, we do not understand how any company or base, Revel or otherwise, can have access to all 400 on a “first come, first serve” basis. An auction should be held, to help raise money for the City and TLC, before any EV-only TLC Plates are released to any and all business entities. If Revel wins the entire business entity allocation in an auction, so be it, but at least money was raised.
As always, let us know your thoughts in the comments section below or by emailing us at info@automarketplace.com.
AutoMarketplace.com NYC covers the for-hire transportation industry and automotive news. Check out AutoMarketplace.com on YouTube ▶️
Revel will win if an auction happens. I just think it’s should be split very fairly with other bases. Revel is back by venture capitalists. It’s very easy for this industry to create a monopoly.
I am so much more informed since I get your AutoMarketplace NYC info! Thank You!