TLC Confirms "Plate Cap" Extension & Calls Out Illegality of Selling FHV Licenses
Previously announced September decision regarding FHV License Pause extension sent out in official email blast to TLC drivers. TLC makes clear it's illegal to sell an FHV License
AutoMarketplace.com NYC covers the for-hire transportation industry and automotive news. Check out AutoMarketplace.com on YouTube ▶️
As I highlighted a few weeks ago, the FHV License Pause (aka TLC Plate Cap) was officially extended until (at least) March 2022 by the NYC Taxi & Limousine Commission (i.e., when the next FHV License Determination report is due). Today, an official TLC email ‘blast’ confirming the decision went out to all TLC licensees, so more drivers may have become aware of the decision made one month ago.
“Over 30,000 existing For-Hire Vehicles did not provide passenger service in July 2021, even though they are licensed to do so, representing a large pool of vehicles that could return to the road and provide service” - NYC TLC
Given the underutilized for-hire vehicle supply and ongoing medallion crisis we believe the ‘TLC Plate Cap’ will be in place for several years and have published a few articles laying out our logic (links below if interested).
NYC TLC Votes to Remove EV Exemption, But Drivers Still Want Ability to Own Their Own Car (AutoMarketplace, June 23 , 2021)
NYC TLC Extends Plate Cap As Senator Schumer Wants More For The Medallion Industry (AutoMarketplace, September 16, 2021)
New TLC Office Will Regulate NYC Taxi Medallions. What This May Mean for Medallion Values (& TLC Plates) (AutoMarketplace, September 30, 2021)
The Wheelchair Accessible Vehicle (WAV) exemption still remains, allowing individuals or corporations to add TLC-plated WAVs. However, it’s my belief that similar to the recently removed battery electric vehicle (BEV) exemption to the FHV License Pause, the WAV exemption may be removed if too many cars are added to the TLC fleet. As regulations become clearer (i.e., plate cap here to stay for a while), there could (presumably) be a surge in WAV applications and its something we will keep track of.
TLC Plates Are Not Transferable
For the observant, you may have noticed an interesting callout in the TLC email today, that wasn’t in previous updates about the FHV License Pause.
My best guess is:
The TLC is reminding drivers who have a claim to a FHV License that they do not have a transferable asset (they don’t have a taxi medallion)
That there may be incidences of illegal ‘TLC plate sale’ transactions and the TLC is warning drivers against engaging in them, either as seller or buyer
As we mentioned previously, FHV Licenses (aka TLC plates) acquired via a corporate entity could technically be sold via the sale of a business, but our research indicates a large majority (~75%) of plates belong to individual TLC drivers. Given business sale transactions of corporate-acquired TLC plates require more capital (i.e., purchase of 5, 10, 20, 50 vehicles) the risk of individual operators having the capital to speculate seems low.
That being said, many NYC TLC drivers, especially those that rent a TLC car, aren’t blind to what such a dynamic could lead to and are calling for a “One Driver, One Plate” rule. Their arguments are honestly somewhat valid as you have a few well known mega fleets (i.e., thousands of FHV licenses) that maybe able to wield significant pricing power, leading to price gouging.
While many TLC drivers think current rental rates (i.e., Camry goes for ~$400 per week) constitute price gouging, an honest financial analysis seems to indicate otherwise. However, that doesn’t mean there doesn’t exist a future where price gouging does occur. This is why I believe you’ll see more regulation around corporate-owned TLC plates whether that comes in the form of lease caps or other regulations.
For full disclosure, although it’s no longer our core business, AutoMarketplace parent company HFW has a medium sized TLC fleet. When we started the leasing business in late 2016, we didn’t foresee/bet on the plate cap dynamic that played out and were focused on leasing out UberBlack-qualified cars (i.e., BMWs) at competitive rates. In fact, AutoMarketplace (launching soon) is born from the experience of owning and operating an NYC fleet (i.e., lessons/tips around saving on auto repair & maintenance, tires, etc).
It’s hard to be be completely unbiased as I write about this subject, but at the same time I can understand multiple sides of the story (business, politics, etc. is very rarely black and white). There is definitely a risk of price gouging by certain bad actors in the TLC leasing industry and there should be reasonable (key word) regulations around that. At the same time, unless the TLC wants to completely collapse the medallion market, it cannot in good conscious open up FHV Licenses for quite some time.
As always, let us know your thoughts below!
AutoMarketplace.com NYC covers the for-hire transportation industry and automotive news. Check out AutoMarketplace.com on YouTube ▶️
TLC Confirms "Plate Cap" Extension & Calls Out Illegality of Selling FHV Licenses
Selling a business is not illegal. The industry goes through mergers and acquisitions all the time and that includes tlc plates tied to corporations. TLC is overreaching here and they have no right to devaluate an asset because the original owner wishes to sell their business. Especially if they won’t issue new plates to that Corp that will have a new owner. It’s simply a transfer of ownership. Even bases can be sold and transferred (there’s an application process and a $500 fee for that) and some bases own tlc plates. Even if it’s one plate tied to Corp, it’s perfectly legal to sell that business, even if it doesn’t come with a book of clientele.
TLC made it big mistake.they should do it 6 years ago .Nyc streets flooding with car’s already.this is Nyc TLC mess and they’re responsible ,and they must clean up their mess.not honest hard working drivers.