📈⚡🚖 NYC TLC Fleet Rips Past 108,000 Vehicles, As EV TLC Plate Decision Looms
Non-taxi TLC Fleet surges past 108,000, as last of *new* EV TLC Plates become active. Looming EV exemption decision(s) will be major industry inflection point
Non-taxi NYC for-hire vehicle (TLC) fleet has tipped over 108,000 vehicles, we estimate ~1,500 *new* EV TLC Plates still need to become active
Over 4,000 taxi medallions still remain inactive, as industry recovery was crushed by release of new EV TLC Plates
FHV License Review report should be published within next 4 to 6 weeks, coinciding with February 14th NYTWA vs. TLC lawsuit hearing on legality of EV exemption decision
NYC’s for-hire transport industry is oversaturated with vehicles, threatening all driver earnings, yellow taxi medallion industry & small leasing companies
⏲️ Estimated time to read article: ~8 minutes
On November 1st, we published an article when the non-taxi NYC for-hire vehicle (FHV or TLC) fleet hit 100,000. It was the first time, post-pandemic, the TLC fleet had hit 100,000 non-yellow cab for-hire vehicles (FHVs). Then on January 24th, we published an article about the TLC fleet surging past 106,000.
Now, a mere 2 weeks later, we’re talking about a non-taxi FHV fleet that’s tipped over 108,000. This was expected, but ~2,000 *new* NYC FHVs actually being added in only two weeks is still astonishing to observe in real-time. To provide further context, the last time there were over 108,000 NYC FHVs, pre-pandemic, was in late April 2018, a little over three months before the City Council passed its original legislation creating the TLC Plate Cap in August 2018.
As many of our readers know, the primary reason for this explosive growth was the surprise reinstatement (temporarily paused due to a New York Taxi Workers Alliance (NYTWA) lawsuit) of the electric vehicle (EV) exemption to the FHV License Pause (TLC Plate Cap). Furthermore, wheelchair accessible vehicles (WAVs), which remain exempt from the TLC Plate Cap, only accounted for about 0.6% (~540 vehicles) of the 8%+ total growth in the TLC Fleet over the last 13 weeks.
WAVs
Of the 108,123 active non-taxi TLC-plated vehicles (as of February 6, 2024) 6.7%, or 7,200, are wheelchair-accessible vehicles (WAVs). It’s noteworthy that the recent pace of WAV growth seems to be slowing. This observable dynamic does seem to support accessibility advocates criticism of the TLC incentivizing drivers to buy EVs. vs. WAVs, by reinstating the electric vehicle exemption to the TLC Plate Cap.
“When there’s the option to choose anything besides wheelchair-accessible vehicles, drivers will choose that other option…Especially since drivers are expected to cover the cost of new vehicles and maintenance.”
- Christopher Schuyler, New York Lawyers for the Public Interest (NYLPI) staff attorney (comments made to Spectrum News NY1)
EVs
Of the 108,123 active TLC-plated vehicles (as of February 6, 2024) 8.9%, or 9,638, are battery electric vehicles (BEVs, commonly referred to as EVs).
~1,500 More EV TLC Plates Coming?
Based on AutoMarketplace analysis and previous TLC disclosure about the number of EV TLC Plate applications submitted before the EV exemption was temporarily paused related to NYTWA’s lawsuit, we believe ~1,500 *new* EV TLC Plates are still due to become active over the next several months.
This will push the TLC Fleet close to 110,000 vehicles!
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Thoughts
Not to repeat ourselves too much, although sometimes it’s necessary , we believe the surge in drivers rushing to buy EVs, although the charging infrastructure clearly didn’t/doesn’t exist in NYC, was driven by “TLC Plate speculation”.
Now that a large majority of ~10,000 *new* EV TLC Plate applications have been processed by the TLC, we’re coming up to a big moment, which can be summarized by a simple question.
What happens if EV TLC Plates open again?
If (1) NYTWA loses its lawsuit re. legality of reinstating the EV exemption to the FHV License Pause and/or (2) the TLC’s once a year February FHV License Review (TLC Plate Cap report) determines that more EV TLC Plates can be issued - that’s going to have a major impact on the NYC TLC market. Well beyond the current damage already done.
Firstly, and fundamentally, if a driver can buy an EV and get a “free” TLC Plate, why would they buy a ~$100,000 taxi medallion and then a $70,000+ wheelchair accessible Toyota Sienna or Chrysler Pacifica? Remember, don’t shoot the messenger.
To be clear, this doesn’t mean a taxi medallion is worth $0, it just means it’s worth less than today’s prices and more downside price discovery will happen. Sure, two or three years from now when/if many other things play out (i.e., congestion exemption, Uber/Lyft waitlist gets very long, certain % of market share is street hand hails) medallion valuations might recover with an EV exemption remaining. However, it would be recovering from a much lower valuation, with much less market liquidity vs. a world where the EV exemption to the TLC Plate Cap doesn’t exist.
Right now, over 4,000 taxi medallions are inactive. Why do people think that is? Why aren’t drivers flocking to buy a taxi medallion for $100,000, which is 90%+ off all-time highs? Is it really about financing not being readily available? Furthermore, why aren’t many financial institutions willing to lend to the industry again?
Think about taxi medallion valuation from “First Principles”. There is a value of cash flows (driver earnings), but that’s relative to if other market alternatives exist that can also generate similar earnings for a driver. For example, if a driver buys an EV (or WAV) and then TLC Plates the vehicle, what is the upfront/ongoing cost, what is the earnings potential (“return on investment”)? Versus buying a taxi medallion, buying a WAV, etc.?
Let us be simple, if a TLC driver can buy an EV and get a “free” TLC Plate then the perceived scarcity value attached to a taxi medallion is significantly impaired.
This is all observable and can at least be partially explained by several discussion points above. Yet, the regulator and City wants to issue more TLC Plates? 4,000+ inactive taxi medallions, but we need more TLC Plates? 🤔 We will use the TLC’s own words from 2021 to argue against the TLC of 2024. TLC vs. TLC.
“As charging infrastructure is constructed throughout the City and as BEVs become more commercially available, TLC anticipates the number of applications for a new FHV license under the BEV exemption will likely increase exponentially. In order to prevent what was meant as a limited exemption to the FHV licensing pause from subverting the goals of the original pause, these proposed rules eliminate the exemption for battery electric vehicles…”
- NYC Taxi & Limousine Commission (June 22, 2021)
Over the last months, we’ve come to the conclusion that the TLC and Mayor might not actually understand current market dynamics vs. purposely acting against the taxi medallion or other parts of the FHV industry. The road to hell is paved with good intentions.
Do we think making the TLC fleet zero emission is a noble goal (& a big business opportunity)? Yes.
Do we think creating a mechanism(s) to protect TLC drivers from unfair leasing arrangements is warranted? Yes.
Do we think charging infrastructure for the foreseeable future is woefully inadequate to support even 10,000 EV FHVs in NYC? Yes.
Do we think drivers entering into financial arrangements to buy EVs, they otherwise wouldn’t have if “free” TLC Plates weren’t on offer, will eventually cause them major financial issues? Yes.
Do we think shocking people with policy is constructive? No.
If it is determined that drivers (or fleets) can once again acquire FHV Licenses by simply buying an EV, the same TLC Plate speculation that we detailed previously, will begin again. Yes, a lot of the speculation has already played out, but enough remains that was prevented due to NYTWA being granted a TRO.
Many, not all, NYC TLC drivers unfortunately will be forced to do the honest ownership math of running an EV in NYC and, as with most speculation, it’ll end badly for many. However, keeping the EV exemption will also drag down many other parts of the TLC industry with it, from taxi medallions to driver earnings to small local “mom & pop” leasing companies.
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 ▶️
Facebook is flooded with drivers saying how slow it is and with insurance on the rise its only a matter of time till u see drivers turning in their plates.