📈🚖 NYC TLC Fleet Surges Past 106,000 Vehicles, With 3,000 More FHVs Coming
In less than 3 months, the non-taxi NYC for-hire vehicle fleet has grown 6%+ (25%+ annualized growth), with ~3,000 more EV TLC Plates set to become active. How many TLC Plates does NYC need?
The non-taxi NYC for-hire vehicle (FHV or TLC) fleet has grown beyond 106,000 vehicles, with ~3,000 *new* EV TLC Plates yet to become active
NYC’s for-hire transport industry is oversaturated with vehicles, threatening all driver earnings & the yellow taxi medallion industry
FHV License Pause (TLC Plate Cap) report should be published within 1 to 2 months, potentially coinciding with next NYTWA vs. City/TLC lawsuit hearing date
⏲️ Estimated time to read article: ~10 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).
Now, not even three months later, the TLC Fleet has grown over 6% and stands at 106,331 🙄. Put another way, if NYC’s non-medallion FHV fleet grew at this pace for the next 12 months, there would be over 134,000 TLC-plated vehicles by next January!
As many of our readers know, the primary reason for this explosive growth was the surprise reinstatement (temporarily paused due to a 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 0.4% (~400 vehicles) of the 6% total growth in the TLC Fleet over the last 3 months.
To provide further context, the last time there were 106,000 NYC FHVs, pre-pandemic, was in early April 2018, only months before the City Council passed its original legislation creating the TLC Plate Cap in August 2018. The notable difference this time, excluding discussions about trip share lost by the traditional black car & livery sector and green cabs, is that there are 28% fewer active taxi medallions today than there were in April 2018.
Of the 106,331 active TLC-plated vehicles (as of January 24, 2024) about 6.6% are wheelchair-accessible vehicles (WAVs).
Of the 106,331 active TLC-plated vehicles (as of January 24, 2024) about 7.6% are battery electric vehicles (BEVs, commonly referred to as EVs).
~3,000 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 a New York Taxi Workers Alliance (NYTWA) lawsuit, we believe ~3,000 *new* EV TLC Plates are still due to become active over the next several months. If this proves true, EVs will roughly represent 11% of the total non-taxi NYC FHV Fleet.
Green Rides Benchmark?
In addition, if our assumption that ~3,000 more EV TLC Plates are coming online is combined with the current WAV figure, ~17% of total NYC FHV supply will be either WAV or Zero Emission (ZEV) by the end of first half of 2024. This implies the 2025 Green Rides benchmark of 15% WAV or ZEV high volume for-hire trips is likely to be met this year.
Whether these benchmarks are thoughtful or realistic, is a topic for another time
NYC Yellow Cab Fleet
Discussing the above numbers, without discussing the NYC yellow cab fleet, would be incomplete. Based on the latest TLC Factbook data, there are still over 4,000 inactive medallions. For example, in April 2018 there were 12,381 working yellow cabs vs. 8,826 in October 2023 (note: by law, there are only 13,587 issued NYC taxi medallions).
As could be expected from the vehicle supply data, there are 40% fewer total yellow cab trips vs. pre-pandemic and 60% fewer taxi trips vs. April 2018, or the last time the non-taxi NYC FHV fleet passed 106,000 vehicles (pre-pandemic).
Thoughts
In his November 2023 Commissioner’s Corner column, published in the Black Car News, TLC Chair David Do predicted the following related to the, then recently announced, reinstatement of the EV exemption to the TLC Plate Cap.
“Some have predicted that this will create a flood of new vehicles on our roads, exacerbating congestion. I don’t believe that to be the case. We saw no such flood when the same exemption existed back in 2021, and given the city’s limited charging infrastructure, most TLC drivers will wait.”
- TLC Chair David Do
As we covered recently, the surge in drivers rushing to buy EVs, although the charging infrastructure clearly didn’t exist, was driven by “TLC Plate speculation”. This was very predictable. We said reinstating the EV exemption was a bad idea back in October and we weren’t surprised by either the immediate consequences of the policy or the subsequent lawsuit brought by taxi driver advocates from NYTWA.
Ultimately though, “what’s done is done”. What we can say now is that we urge the TLC, City Council Members, and the Mayor to learn from policy mistakes to (1) protect all TLC-licensed driver earnings and (2) promote a healthy taxi medallion industry.
TLC Driver Earnings
We mention TLC driver earnings and the health of the taxi medallion industry for a pretty easy to understand and related reason - if NYC for-hire vehicle (FHV) supply is growing faster than trip demand or if vehicle supply & trip demand are not allowed to become more “balanced” - TLC driver earnings will suffer across all for-hire transport sectors.
For the “but Uber & Lyft have a minimum pay formula” argument, many still do not fully understand that if utilization rates go down related to vehicle supply and/or trip demand imbalances, much hated driver “lockouts” will reappear. We’ve already seen Uber & Lyft NYC driver waitlists return, which we understand take more than 6 weeks now to get off of (this will likely only increase with time).
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Taxi Medallion Industry
The perceived scarcity value of a taxi medallion if one can get a “free TLC Plate”, in addition to reduced driver earnings power, will undoubtedly hit taxi medallion values. We aren’t saying anything controversial, this is fairly obvious - supply and demand, TLC 101, taxi medallion 101.
For those who don’t believe the taxi medallion system should exist we do not have a time machine to undo or rewrite history and we’re not sure what is being suggested?
That after driver suicides, hundreds of millions of debt forgiveness and a City Loan guarantee that we now eliminate the NYC yellow taxi medallion system? Here’s the thing, the City has decided the taxi medallion system should exist (for several reasons), therefore policymaking must now clearly support it. Of course policies should balance all stakeholder demands, but clearly taxi medallion owners and lenders from (individual drivers to investors) represent significant industry stakeholders.
TLC Plate Cap Determination & NYTWA Lawsuit
Finally, it’s worth mentioning that the, now once a year, For-Hire Vehicle (FHV) License Pause report will likely be published in the next one to two months. This report is also commonly referred to as the “TLC Plate Cap” report, where the regulator determines whether there is a need to issue more TLC Plates.
The TLC decides whether to issue more FHV Licenses (TLC Plates) by assessing factors, including:
Trip volumes
Vehicle supply
Traffic congestion levels
Driver earnings
License attrition rates
Outer borough service
Electric vehicles & charging infrastructure
The TLC Plate Cap report used to be published twice a year, one report based on January data and the other report based on July data, but the rules were changed in early January 2023 to make it a once a year report, issued in or shortly after the month of February.
The last FHV License Determination “February 2023” report was published nearly 8 months after February 2023, and coincided with the passage of the Green Rides Initiative. Remember, the February 2023 report, published in October 2023 and based on January 2023 figures, was the technical mechanism that allowed the TLC to reinstate the EV exemption to the TLC Plate Cap.
That this report was published 8 months late, using January 2023 data, is extremely controversial in our view.
Furthermore, reading a Court transcript of the ongoing lawsuit between NYTWA & the City / TLC, New York State Supreme Court Judge J. Machelle Sweeting also seems to have taken notice of potential issues related to NOT setting, up front, a fixed number of TLC Plates to issue (vs. unlimited), given how the FHV License Pause report is created.
For example, if the TLC studies lagging indicators to make its determination on whether to issue more TLC Plates, while having an unlimited EV TLC Plate policy, by the time the TLC gets around to studying the impact, the regulator might not realize FHV oversaturation had already occurred, after the fact. It might be analogous to starting a race, but not establishing an exact finish line.
Finally, given Judge J. Machelle Sweeting is set to hold a hearing on the case again on February 14th, we might expect the judge to delay a final ruling until TLC issues its February 2024 TLC Plate Cap report or the TLC might have the report ready by that hearing date (Note: this is pure speculation on our part).
That being said, even if the TLC removed the EV exemption to the TLC Plate Cap, the issue around whether the TLC can make an “unlimited” EV TLC Plate issuance policy without going through a formal City Council (“CAPA”) process, as was done with WAVs, or hold a public hearing, will still need to be decided.
From the NY Supreme Court transcript (see attachment below for full transcript):
THE COURT [NY Supreme Court Judge J. Machelle Sweeting]: And if it is annual, is the next study February of 2024?
MS. SELVIN [City/TLC Attorney]: I believe so, Your Honor, but I can verify that as well. So that would be in a little over three months. Let me just verify that for you, Judge.
MR. SOLEIMANY [NYTWA Attorney]: And you know on this point, Your Honor, I think it bears noting that this -- the so-called February 2023 report was not published until October 18th when the announcement was made. So we don't really know when we might expect the next 12 month --
MS. SELVIN [City/TLC Attorney]: Judge, they have confirmed that it will be February 2024 is the next study.
…
THE COURT [NY Supreme Court Judge J. Machelle Sweeting]: But here's the thing, why not -- if not a thousand because based on the study a thousand wasn't enough, so you double it, and you say 2,000 or 3,000, you come up with some number because could not TLC find itself in another predicament, which is if the unlimited universe of eligible applicants, interested applicants were to apply and there is no cap and everyone who applies is eligible, you then have by the time you've done the study, the study may come back and say there's not now an oversaturation, what do you do then? Hypothetical.
MS. SELVIN [City/TLC Attorney]: No, I appreciate what you're saying, Judge.
As always, let us know your thoughts in the comments section below or by emailing us at info@automarketplace.com.
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There are gonna be many bankruptcies coming soon, my personal earning have declined 20%, if this keeps on I will have to jump ship.
I read the entire transcript from the court, the tlc attorney said that most applications are not from corporations but from individual people who want to be an owner operator, but the truth is that insurance is cheaper on an individual, this is only the reason why people file an application on an individual, look at Facebook, how many tesla for rent, more than regular cars. if all people who bought tesla work on its by itself there has no so many tesla for rent. this all looks like a corruption scheme, they sold ev cars to people from all over New York, which had been sitting at dealerships for several years, were not provided with chargers, in the summer they ask people to turn off their air conditioners because the city can’t cope with the load, how do they want to charge 75k ev cars, business has dropped for everyone , before, even when people rented cars, they still earned money, and the rental companies and drivers, and now neither one nor the other, everyone thought that I would take my car and earn the same amount as before, but they did not take into account that there are many such people, and the market sank, Uber also created a waiting list for drivers, insurance companies don't take new drivers, they also raised insurance prices, TLC hit this business hard with its decision, they say that before covid there were 120k cars, I remember that time, every the second car on the street had TLS license plates, now there will be about 110k of them, and the city will also be stuck in traffic jams.