ππ That's Good, Right? NYC FHV & Taxi Congestion Toll Outlook
MTA's Traffic Mobility Review Board (TMRB) looks to increase passenger congestion surcharge vs. making driver responsible for new congestion tolls. Yellow cab industry wanted complete exemption
Under latest proposals, NYC for-hire vehicles (FHVs) and yellow cabs will NOT be exempt from congestion tolling, but effectively have the current PASSENGER PAID congestion surcharge increased
4 new scenarios range from peak tolls of $1 to $2 per trip, with potential non-peak hour discounts
With pre-existing congestion surcharges of $2.50 and $2.75, passengers will often be paying more than $4 per trip in congestion fees π!
If Uber, Lyft, base or taxi garage does not remit *new* congestion surcharge, then driver technically still has to remit payment in a similar manner to other E-ZPass tolls
Administrative, but not financial, burden might still fall on TLC-licensed driver and/or vehicle owner
Base congestion toll could be ~$15, according to MTA leader Janno Lieber
Another way to view new MTA proposals is 3 to 5 for-hire trips would raise the equivalent of one private vehicle congestion toll
App-based FHVs and yellow cabs average between 6 to 12 daily trips involving Manhattanβs congestion zone, according to NYC DOT
Government entities might be collecting more money than Uber & Lyft on many NYC trips, under new proposals
Congestion tolling could be in place by April 2024
The six-member Traffic Mobility Review Board (TMRB) held a public hearing yesterday and presented four new pricing proposals related to how final NYC congestion tolling might look. The new pricing proposals indicated that FHVs and yellow cabs would not be exempt, but rather a congestion surcharge, IN ADDITION to the one that currently exists, would be paid for by the passenger.
Below, is a screenshot of the proposals (βscenarios"β) from yesterdayβs over one hour public meeting.
NYC Taxi & FHV Specific (Congestion Tolling Proposals)
(Note: Scenarios below EXCLUDE existing congestion surcharge of $2.50 and $2.75 for NYC taxis and app-based FHVs, respectively)
Emoji Key
π = NYC Taxi, Green Cab, traditional black car & livery sector
β«π£ = NYC Uber & Lyft (high-volume βapp-based FHVsβ)
Scenario #1
π: $1.50
π: $0.75 (9pm to 6am)
β«π£: $2.00
β«π£: $1.00 (9pm to 6am)
Scenario #2
π: $1.00
π: $0.75 (8pm to 10pm, 5am to 6am)
π: $0.50 (10pm to 5am)
β«π£: $1.50
β«π£: $1.13 (8pm to 10pm, 5am to 6am)
β«π£: $0.75 (10pm to 5am)
Scenario #3
π: $1.00
π: $0.25 (10pm to 5am)
β«π£: $2.00
β«π£: $2.75 (trip within CBD)
β«π£: $0.50 (10pm to 5am)
β«π£: $0.69 (10pm to 5am, trip is within CBD)
Scenario #4
π: $1.50
π: $1.13 (8pm to 10pm, 5am to 6am)
π: $0.75 (10pm to 5am)
β«π£: $2.00
β«π£: $1.50 (8pm to 10pm, 5am to 6am)
β«π£: $1.00(10pm to 5am)
As a quick reminder, since the Federal Highway Administration (FHWA) has now approved NYCβs congestion tolling, the TMRB is tasked with developing recommendations for toll rates, as well as any credits, discounts, or exemptions and then present the recommendations to the MTA Board for consideration before the program is implemented.
Therefore, the two key decision making bodies for NYC congestion pricing are:
The 23 member MTA Board
The 6 member Traffic Mobility Review Board (TMRB), which includes current and former MTA Board members
βThe TMRB will take into consideration traffic patterns, traffic mitigation measures, operating costs, vehicle types, public impact, public safety, peak and off-peak rates and environmental impacts. Accompanying their recommendations, the TMRB will provide a reportβ¦Ultimately, the MTA Board will determine the final toll structure after the TMRBβs recommendations. The recommendations must ensure collection of annual net revenues and fees necessary to fund at least $15 billion for the MTAβs 2020 to 2024 capital programβ
- MTAΒ Β
Hearing Highlights
To make it easier for our readers, weβve condensed the over one hour meeting (click here to view the full hearing) into a 10 minute highlight reel just related to NYC for-hire vehicles and taxis. In our view, itβs important to hear the discussion directly without our commentary, so you may also judge it for yourself.
β[NYC yellow cabs] typically are making, on average, 12 trips a day that in some way touch the the CBD, while for FHVsβ¦itβs about half that amountβ
- Will Carry, Assistant Commissioner for Policy, NYC Department of Transportation
Based on the above quote, if a yellow cab π made 12 trips during congestion hours, the collective congestion surcharges, if Scenario #1 was implemented, could illustratively look like this:
(Status Quo) $2.50 * 12 trips = $30 per day of congestion fees collected from passengers
(Status Quo + New Congestion Tolling) ($2.50 * 12 trips) + ($1.50 * 12 trips) = $48 per day of congestion fees collected from passengers
Finally, we conclude the article with some brief thoughts.
Government βTake Rateβ
In the investment world, a βtake rateβ is a common financial metric used to measure the network effect and pricing power of a marketplace business. For example, Airbnb takes X% of a booking, or Amazon takes Y% of a third party sale completed on its website. The more powerful and valuable a service, the higher take rate a marketplace, or market maker, can demand.
Uberβs 20%+ take rate is often criticized, rightly so in some cases, by drivers and policymakers. However, with this new congestion pricing proposal, the government, at this point, might be making more money (as a % of the total passenger fare) than Uber & Lyft does from trips the companies originate!!! π€
This isnβt hyperbole, take a look a NYC yellow cab or Uber receipt, and then add the newly proposed, additional congestion tolling.
To be frank, and now is the time for absolute frankness, we have a class of policymakers and politicians who are not in the habit of balancing budgets, this dynamic cannot last forever and it should be a nonpartisan issue.
In fact, the MTA is an embarrassing City, state and national poster child of budget mismanagement, so of course itβs only appropriate that itβs this very organization thatβ¦needs more money π€. Having a best in class mass transit system and balancing the budget without raising taxes or surcharges, are not mutually exclusive goals. The MTA has a long, documented history of being financially irresponsible, so before they are granted more money, we perhaps should all pause and reflect.
Itβs quite ironic that so many of our elected officials, their staffers, their lobbyists and their appointees criticize Uber and Lyftβs historically unsustainable cash burn, while they are doing the same thing with taxpayer money! This is simply, to us at least, an unacceptable political and budget dynamic that must change.
The formula looks something like this - need more money? Raise taxes, raise surcharges, demonize the business people who help build this City and attract talent to it and then look at cost cutting later. Our domestic state and city rivals continue to gain ground on New York. For example, Floridaβs workforce ended the year larger than New York's for the first time ever! Many of our business & financial elite, plus consequential taxpayers, have departed to South Florida or Texas. The writing is clearly on the wall π§±.
To say the driver does not pay for these congestion tolls while technically correct, is ignorant to the obvious fact that if trips are more expensive, perhaps less people will take taxis/FHVsβ¦but perhaps thatβs MTAβs goal in a way. MTA capital spending plans from a pre-pandemic era where work from home (WFH) was non-existent, must also obviously be revised downwards.
Furthermore, the Cityβs / TLCβs inability to help the taxi medallion industry recover quicker is concerning, especially given the City loan guarantee on restructured medallion debt (fyi, 4,000 medallions * $170,000 = $680 million). Once upon a time, the City had this amazing tool (taxi medallion auctions) that helped it raise billions for the budget.
Does the City have no interest in reclaiming this mechanism? In seeing the turnaround through? In ensuring that the City does not default on its obligation related to the City loan guarantee on restructured medallion debt?
As over 4,500 taxi medallions sit in storage and the TLC considers initiatives to (re)issue *new* FHV Licenses (TLC Plates), we are entering peak City politics. In one breath we are arguing the City has too much congestion and we must pay for it (including outerboroughs btw, has anyone driven in Brooklyn, Queens, Bronx latelyβ¦), in another weβre arguing for MORE TLC-plated vehicles? To achieve what exactly, increased NYC FHV electrification to lower emissions via increasing congestion?!
Some other questions to think about?
Are non-NYC for-hire vehicles exempt? For example, will a Newark cab, New Jersey OL-plated vehicle, Westchester / Nassau County-TLC vehicle be subject to the standard congestion base toll (i.e., $15 toll to cross into central Manhattan)?
Is Uber and Lyft remitting the congestion surcharge, if itβs NOT on the driver? For example, will the E-ZPass readers recognize that a NYC TLC-regulated vehicle is passing the zone and send bill to driver or vehicle owner or will Uber, Lyft, base, taxi garage be responsible to remit? Currently, bases remit congestion surcharges.
EV exemption to congestion tolling? Wouldnβt this be a way to drive electrification in the NYC TLC fleet?
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 βΆοΈ
Nyc sold the yellow taxi madallions for the public and to the public after check department of Environment and Department of Traffic they issued the madallions to the public and for the public and city of newyork collected billions of dollars by selling the nyc madallion taxi rights so Each Madallion is the part of the nyc same as MTA Buses so we paid all the money to be in the nyc dear politicians and law makers please Exclude the NYC Taxi Cabs from the current congestion tax and any future tax do the right thing you officers if u believe in the legal system of nyc taxis r ur own sold franchise god bless
That is the way I thought it was going to go but itβs still NOT GOOD for drivers due to the reduction in demand a price increase will incur, even if itβs an extra dollar or two. If I were Uber and Lyft, Iβd be fighting this tooth and nail to reduce the per passenger rate to a figure as low as possible. What a shame to throw this at an industry that is still recovering from the pandemic and where workers have not fully (nor may they ever) returned to the office. Itβs shocking really. Itβs the proverbial kicking a man while he is down scenario.