🔷 Revel Might Need A NYC High-Volume Base License & Why It's A Big Deal!
Revel's NYC base Electric Peppers LLC suddenly stopped dispatching trips in November 2023 after getting closer to 10,000 daily trip high-volume (HV) for-hire services "base" threshold. We explain.
All pre-arranged or e-hailed NYC for-hire trips must be dispatched by a TLC-licensed base
TLC-plated vehicles (FHVs) must also be associated with a base although FHVs can be dispatched by other bases, known as “cross-dispatching” rights
When a company passes 10,000 daily trips threshold, TLC requires them to apply for a high-volume for-hire services “base” (HVFHS) license, which is subject to additional regulations, including driver minimum pay and utilization rate (UR)
Currently, only Uber and Lyft have HVFHS base licenses
We believe Revel crossed 10,000 trips per day threshold and nothing indicates W2 employee-driver model would exempt it from needing HVFHS license
Revel 🔷, the all-electric rideshare and EV infrastructure company, continues (fine, appears) to be a company that doesn’t need to follow rules everyone else is subject to. We’re not sure whether its significant lobbying efforts has allowed it to operate in this way and/or whether its electric vehicle (EV) & infrastructure focus has granted it a favored political status.
All EV ⚡ = All Good ✅
Ask questions about forced EV adoption ✋ = climate change denier 😥
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The company, a venture capital-funded enterprise reliant on investor and government subsidies to survive, has been a consistent subject of controversy since launching its NYC moped service, which it has now shutdown. When the company launched its employee-only, all-EV rideshare service in 2021, it was a battle from the start. Revel co-founder Frank Reig, a capable operator, comes off as the “second coming” of infamous, but also extremely capable, Uber co-founder Travis Kalanick.
He appears to be both in the taxi is an “asshole” camp, but at the same time thinks Uber and Lyft are also assholes that underpay their drivers. The irony of course, as is the case with many “disruptive” tech founder statements, is Revel usually pays its drivers less than Uber and Lyft in NYC and offers less flexibility (i.e., you must be their employee and work a shift). Again, this is all quantifiable and people can check our claims which are based on direct conversations with drivers who’ve worked for both Revel and Uber / Lyft NYC.
“Our ability to operate doesn’t depend on the Commissioner’s opinion—it depends on us taking the steps laid out by law to complete the administrative licensing process, which we’ve done since the start…Right now we are exactly where we need to be as we look towards putting Revel rideshare vehicles on the road in May.”
- Revel CEO & Co-Founder Frank Reig (quote from April 28, 2021 The Verge article)
“One thing that gets my blood boiling is the Prop 22…everyone knows when you use those apps, engaged time is probably 40%-50%. So your point is literally you admitting you’re paying your people less than minimum wage. And that’s like, your big program. What? How do you even fall for this? It’s ridiculous.”
- Revel CEO & Co-Founder Frank Reig (interview with Smart Cities Dive, January 19, 2021)
Whether it’s a probabilistically improbable TLC plate allocation or its CEO scoring speaking time (🤔) during the Mayor’s shock announcement reinstating the EV exemption to the TLC Plate Cap last October or its unexplained ability to advertise on the exterior of its vehicles (clearly in violation of TLC rules), Revel has always been able to pull a rabbit 🐇 out of the proverbial hat 🎩. Maybe in a “young Uber” fashion they just don’t think the rules apply to them or they don’t think the City / TLC will ask them to follow them.
We respect the hustle to some degree, that’s the nature of the game. Creating a company from scratch ain’t easy. Keeping a company alive ain’t easy, it can be extremely painful. We’ve spoken to people at Revel and they are genuinely very nice and intelligent. However, after a while the ability to constantly circumvent, or quickly change, regulations starts to look and feel more like corruption than disruption.
The latest Revel observation we want to speak to our readers about is the company’s ability to operate without a high-volume for-hire services (HVFHS) “base” license. This license is required when a company starts dispatching more than 10,000 trips per day in NYC. As we’ve covered, although Revel has now partnered with other TLC fleets, even if a vehicle is affiliated with another base (i.e, Uber USA, LLC), all passenger trips marketed under the Revel brand are viewed as one operating entity in TLC’s eyes (see screenshot below).
Furthermore, although all of Revel’s drivers are W2 employees, there is nothing in TLC rules, at least in our reading, that indicates a company that employs drivers is exempt from HVFHS rules. Happy to be proven wrong if someone can point us to where it says companies that employ a W2 employee-driver model are totally exempt from HVFHS rules.
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Why We Think Revel Has Met HVFHS Threshold?
Let’s start with some basic facts. In January 2024, Revel stated it employs 1,500 employee-drivers focused on the NYC TLC market. If Revel is not conducting over 10,000 daily trips with 1,500 employee-drivers, that would be surprising.
“Revel operates a fleet of over 500 electric vehicles (EVs) — including Tesla Model Ys and Model 3s and Kia Niro EVs — delivering rides in all five boroughs, parts of northern New Jersey, and to-and-from the three major airports. Revel employs about 1,500 drivers as W2 employees who have guaranteed hourly wages and access to benefits like healthcare, paid time off and 401(k) retirement planning. Revel also covers all vehicle costs like leasing, maintenance and charging.”
- Revel press distribution (January 17, 2024)
To be more specific and technical, if you go to NYC Open Data and download the FHV Base Aggregate Report, you’ll get a monthly breakdown (until January 2024) that summarizes for-hire trips in NYC by base and operating entity (DBA = Doing Business As). We’ve sorted the below list from largest to smallest under the ‘Total Dispatched Trips’ column from January 2023 to December 2023.
Outside of Uber and Lyft, you can see a base named Electric Peppers LLC had multiple months where it was the third largest dispatching base and growing rapidly from roughly 1,600 average daily trips in January 2023 to nearly 6,000 average daily trips in October 2023. This base almost 4x’d its trip volume in 10 months! The DBA name of Electric Peppers LLC should show as Revel and many of the company’s vehicles are still affiliated with this base.
What’s noteworthy is Revel’s base Electric Peppers disappears after October 2023, going from the third largest base in NYC with 181,264 trips (or ~5,847 average daily trips) across 505 vehicles to ZERO trips 💀 in November and December 2023! This obviously can’t be the case as Revel is still dispatching trips everyday in NYC.
Now, your first thought might be AutoMarketplace they might have changed the name (!!!) of their base. Below, we’ve sorted the same list from largest to smallest under the ‘Total Dispatched Trips’ column for November 2023 and December 2023. It’s not obvious at all where Revel’s dispatches disappeared. For reference Bee-Bee Car Service, Agape, Riverside Radio, Allstate Private Car & Limo and TWR Car & Limo had similar trip volumes from January 2023 to October 2023.
Finally, if we check the latest (May 13, 2024) active for-hire vehicle database, we still see many active TLC-plated Teslas, including those owned by several Revel fleet corporations and Hertz, are still affiliated with the base Electric Peppers LLC. Remember, this excludes vehicles our previous analysis has identified as working on the Revel platform, but being affiliated with Uber’s base (i.e., TLC-plated vehicle that has cross-dispatching rights).
Why It’s A Big Deal?
Revel is still picking up and dropping off passengers in NYC, but according to City data it’s not dispatching any trips. Something is off. Our opinion (*Note: opinion) and guess is Revel might be gaming how dispatches are reported because the company realized it was rapidly approaching 10,000 average daily trips and then would be subject to onerous HVFHS rules. Whether the TLC is complicit or being duped is anyone’s best guess.
Let’s, for a minute, give a massive benefit of the doubt to all parties and say there is simply an error in data reporting, but Revel is doing more than 10,000 average daily trips and is in the process of applying for an HVFHS license (i.e., no conspiracy theory, our analysis missed something). Remember, the utilization rate (UR) is based on an industrywide metric of all NYC high-volume bases (currently only Uber and Lyft).
A part of us thinks Revel’s UR might be really high actually, so it may help out the rideshare companies (no “free rider” problem). Another part of us thinks Revel simply can’t afford to pay its drivers the TLC driver minimum pay-equivalent required by HVFHS “bases”, given the company’s rideshare business is still dependent on investor subsidies and it manages its own fleet.
However this plays out, we are sticking with our original thesis that Revel will shutdown its rideshare offering to focus on its infrastructure business. NYC TLC drivers who work for Revel should consider our perspective🔺.
With cornering at least 15% of all NYC lobbying dollars I just can’t see how you can not be benefiting from some favoritism (eh, corruption). Coupled with the smoke of corruption (where there’s smoke there’s fire) at the Adam’s Administration and it looks like Revel has been enjoying a pretty cozy relationship with local government not enjoyed by other entities. It’s only a guess but why do Federal authorities keep doing search warrants to Adams’ electronic devices and government/political friends? This would also pretty well explain why the TLC was so rash in doling out EV licenses last autumn from which Revel greatly benefited. At this juncture there is still no logical explanation for that impromptu EV-license issuance.