Discover more from AutoMarketplace
🐙 Let There Be Ads!
Recent TLC warning to drivers & vehicle owners about using T-Mobile-owned Octopus Interactive tablets, should serve as inspiration to (once again) push for regulated, in-car ads in all NYC FHVs
A few days ago, the TLC sent an industry-wide email, warning against the use of T-Mobile-owned Octopus Interactive passenger tablets, that some drivers and vehicle owners attach to the back headrests of their vehicles front seats. Octopus essentially gives a cut of the ad revenue they generate to drivers and/or vehicle owners.
T-Mobile acquired Octopus’ “rideshare advertising” tablet network in early 2022. The concept is fairly straightforward, it’s a modern day version of a “Taxi TV” that you find in the back of many yellow cabs. While some passengers famously ignore, shut off or mute backseat screens, companies are willing to pay money for ads. T-Mobile US, which has over 100 million wireless customers, wouldn’t have bought Octopus if it didn’t think there was value in their rideshare tablet ad network.
“With this move, we’re expanding our toolkit for marketers, meeting the needs of advertisers and empowering brands to better connect with consumers, beyond linear and traditional digital channels…we’re committed to disrupting the ad tech space. We’re making good on that commitment through innovative solutions, like Octopus.”
- Mike Peralta, VP and GM of Marketing Solutions, a division of T-Mobile
Why Is This Illegal?
In one of our first articles, back in 2020, we covered the sale of NYC yellow cab roof rights to Google Ventures (GV)-backed startup Firefly. At the time, we also mentioned the deal came after the TLC banned display advertising on both the inside and outside of for-hire vehicles (excluding the medallion cab industry) in August 2019.
The ban was controversial and upset some drivers who lost out on a way to generate additional income.
“The TLCs actions to take away income from drivers is a slap in the face to hard-working New Yorkers who are already struggling to make ends meet. For some drivers, this is the equivalent of losing 10 percent of their salary. Drivers are telling us that without this additional income they will not be able to pay for health insurance for their family. It makes no sense why the TLC did this especially after saying it is serious about helping drivers earn a livable wage.”
- Brendan Sexton, Executive Director for the IDG
Explaining the decision at the time, then TLC spokesperson Rebecca Harshbarger said the public sphere and city landscape would be negatively impacted if too many cars had ads (at least exterior ads).
“The TLC had always prohibited advertising in for-hire vehicles, and this was upheld in a federal court decision last month. We’ve seen no evidence of drivers benefiting from advertising, and only 70 out of 120,000 for-hire vehicles have permits for exterior ads (which they received while our rule was temporarily enjoined in February).”
- Rebecca Harshbarger, TLC spokesperson
Explaining the logic behind allowing ads on the exterior and interior of yellow cabs, but not other FHVs, the TLC spokesperson further stated.
“Yellow cabs are permitted to have advertising because of the technology that taxis are required to have,” she explained, noting that taxis themselves currently facilitate credit card payments and collect data on each trip to help with enforcement, finding lost property and studying traffic patterns. “Advertising helps to defray the cost of the technology system in taxis. For-hire vehicles, such as black cars and livery cars, are not required to have this technology.”
According to Crain’s reporting at the time, City Councilman Ydanis Rodriguez, currently the Commissioner of NYC’s Department of Transportation (DOT) but then head of the City Council’s Transportation Committee, proposed a bill at the start of 2020 that would negate the TLC policy banning ads for Uber and Lyft vehicles. The legislation was reported to have stalled though after a tense hearing in which yellow cab drivers told the City Council that ads from Uber drivers would saturate the market.
Interestingly, Uber and Lyft are now making money advertising on top of yellow cabs 🚖! It also seems like Lyft has its own competing interior tablet (to be fair, we’re not sure if it’s authorized to be used in NYC FHVs).
Medallion Valuations
We probably overstated 😳 the impact of advertising rights on taxi medallion valuations in our 2020 article, but it’s fairly obvious taxi medallion owners, at this point, will fight for all and any rights they currently have, that other NYC FHVs do not. Of course, street hand hails are still the medallion’s exclusive right, but it appears they want to ensure exterior advertising, at the very least, is their exclusive right as well. You honestly can’t blame them, considering TLC continues to contemplate the release of *new* FHV Licenses (TLC Plates).
Former TLC Chair Daus Opinion Piece
In an August 2019 Black Car News piece, former TLC Chair & Commissioner Matthew W. Daus directly spoke to the issue around expanding NYC FHV advertising rights beyond taxis.
“Uber and Lyft drivers are still struggling despite the TLC’s minimum pay rules. The ads provide FHV drivers with upwards of $300 per month, which is what they earn from 12 hours of driving. To claim that rooftop advertising does not benefit FHV drivers is simply false. While the TLC wants the industry to believe that they are simply maintaining the status quo and have not changed their policy on FHV advertising, to countless drivers across the city, the reality is that the status quo threatens their quality of life and economic security. The TLC has the ability to continue to allow FHVs to display interior and exterior advertising, despite the court decision, and has actively chosen to do nothing to help drivers. Rooftop FHV advertising on FHVs had only just begun to ramp up before TLC pulled the plug on this new revenue stream for drivers.”
- Former TLC Chair & Commissioner Matthew W. Daus, Esq.
That’s pretty blunt 👀 and comes from someone who knows the NYC for-hire transportation industry extremely well, literally the former TLC Chair.
Black Car & Livery Task Force
It would also be remiss to not mention the Black Car & Livery Task Force’s 2021 findings that contemplated allowing “Black Car and Livery vehicles” to have rooftop and in-car advertising rights.
How Can Revel Advertise? Remember Juno?
Finally, with our recent reporting on Revel’s unusually large allocation of *new* EV-only TLC Plates, we once again find ourselves scratching our heads on how Revel has managed the improbable, by clearly advertising their service on the exterior of its affiliated base vehicles (see image below).
Is this not exterior advertising on a non-medallion FHV? If we sat in the Revel, would there be an interior screen, has the TLC checked? Yes, we know TLC rule §59A-29(e) states the TLC can authorize ads, but you’re honestly telling us $150 billion+ telecom giant T-Mobile can’t get that authorization, but Revel can? 🤷
Furthermore, who remembers Uber’s 2016 lawsuit against now defunct Juno, for allegedly advertising their service illegally in NYC via a driver’s smartphone (!), which is much smaller than a large tablet or Tesla center console screen.
“At least one Uber driver has been deactivated for “displaying advertising of other ride-sharing companies while on Uber trips,” according to a text sent to the driver from Uber, while others received renewed threats of deactivation from the company via text or email.
The TLC Rule 80-15G does in fact state that advertising to passengers while on a ride is prohibited.
“A Driver must not sell, advertise or recommend any service or merchandise to any Passenger without prior written Commission approval.”
- Vox
You really can’t make this up…
Our point here is not that Revel shouldn’t be allowed to advertise, but that the same rules need to apply to everyone. In our opinion, and many others it appears, the TLC should allow regulated advertising (at least interior ads) in all FHVs.
The taxi medallion industry will be upset, but to infer medallion rights included the exclusive, perpetual rights to both exterior and interior NYC for-hire vehicle advertising…is a stretch. However, we do understand their concern related to how losing these ancillary ad rights could hit medallion valuations further.
Perhaps exterior ads (“taxi tops”) are exclusive to medallions cabs, but interior, TLC authorized, advertising tablets can be allowed across all NYC FHV sectors. Also, if the TLC can definitively confirm medallion taxis have the sole right to exterior ads, if that’s what they want to do, that will likely help increase medallion valuations as well. By giving regulatory clarity, in some reasonable manner, it will help investors and lenders get comfortable investing again in the yellow cab industry - something they desperately need based on last weeks auction results.
Fundamentally, the TLC needs to ensure everyone is subject to the same set of standards and rules within a FHV sector & across FHV sectors.
As always, let us know your thoughts in the comments section below or by emailing us at info@automarketplace.com.
AutoMarketplace NYC covers the for-hire transportation industry and automotive news. Check out AutoMarketplace on YouTube ▶️