In 30 years as a livery-cab driver, Edison Ormeno has had his share of headaches. But few of them compare to what happened when the city stopped issuing for-hire-vehicle licenses a year ago to reduce congestion in Manhattan.
The targets of the moratorium were Uber and Lyft, the ride-hail giants that have put more than 80,000 cars on New York City streets. Ormeno drives for El Barrio’s Car Service, an operator based in an East Harlem walk-up that, pre-Uber, dispatched about 325 vehicles. Today it has 106
Last summer, just as the cap took effect, Ormeno’s daughter-in-law borrowed his 2004 Lincoln Town Car—and totaled it. Without his wheels, his income plunged and he couldn’t afford the insurance required to keep his vehicle license. Under the city’s policy, he couldn’t get a new one.
Ormeno’s troubles are among many besetting livery cab and traditional black-car businesses, which for years have been battered by deep-pocketed, app-based competitors. Livery owners say a policy aimed at Midtown traffic is particularly misguided when it comes to them, as their riders are largely above 96th Street and in the outer boroughs.
They say their already-thinned ranks are being dangerously depleted by the new-license freeze—whether through normal attrition or mishaps like Ormeno’s—just as they are seeing a chance to make a comeback. City regulations have slowed growth for Uber and Lyft, which are losing money and are no longer aggressively recruiting drivers.
In fact, drivers are returning to liveries, or at least wanting to, especially as some bases add lucrative medical-transportation work, including rides paid by Medicaid.
What’s killing the liveries is a paucity of drivers, not a lack of customers. Their cash-paying clients often lack credit cards and don’t have accounts with Uber or Lyft. But the driver shortage pushes up wait times, and operators fear a downward spiral as riders look elsewhere.
Livery owners and their traditional black-car allies are now asking the city to create a license that would be restricted to their categories. It would let them begin restoring their driver numbers, they say. Drivers who obtained the license would affiliate with a livery or traditional black-car base and would not be able to transfer the vehicle, as they can now, to Uber or Lyft.
“The city has taken a blanket approach to the congestion problem,” said Jose Altamirano, president of the Livery Base Owners association and owner of El Barrio’s, which was founded by his parents more than 30 years ago. “We started this fight, even though it’s an uphill battle, because we have this group of drivers who want to work [and don’t have a proper license]. A lot of bases are in this position, where they want to add drivers so they can grow, but can’t.”
Adding drivers would go straight to the bases’ bottom line: Their income depends on the roughly $85 per month drivers pay to affiliate with a base.
Stuck in the middle
Traditional black-car operators, which primarily serve corporate clients, say they are endangered too.
“Right now, when Uber and Lyft’s prices are high, we lose our drivers. When they are low, we lose our customers,” said Diana Clemente, president of both Big Apple Car and the Black Car Assistance Corp., an industry group. “It’s a recipe to put us out of business.”
She said her members’ business is down more than 20% since the moratorium began in August 2018, mainly because the app-based services “have offered monetary incentives to lure drivers.” What’s more, luxury-car drivers who want to work with Uber Black have been required to switch their base affiliation and carry the Uber logo. That makes the drivers unsuitable for traditional black cars, which specialize in prearranged rides and now struggle to handle spur-of-the-moment requests.
Customers are sometimes left waiting up to 30 minutes—they used to wait about 10—for a car. Clemente said the result has been that those “live” ride requests are down dramatically.
El Barrio’s vehicle count has dropped by one-third during the moratorium, which last month was extended for a second year and has no end in sight. Although Altamirano said he expects the roster to increase in the fall, when drivers return from vacation, it might not be sustainable.
He said that last year nearly 20 of his drivers lost their TLC vehicle license—known as a diamond—including those who went back to their native country for the annual summer break. The sojourn typically involves giving up the diamond and the monthly insurance payments that go with it. This time, however, the drivers couldn’t retrieve their license when they returned.
Some have not come back to work, while others are paying $400 per month to lease a licensed car from a fleet owner. Ormeno is one of them. He said he is forking out double what using his own car would cost.
“If I could get my diamond back, that would be a godsend,” he said in Spanish. “Right now, I’m just trying to survive.”
Altamirano and others from the livery industry plan to present their case at a City Council transportation committee hearing Sept. 10. But so far they have made little headway with the city agency that oversees the industry.
The Taxi and Limousine Commission points out that, with drivers lured by the prospect of making more money from Uber and Lyft, liveries have been losing drivers to the Silicon Valley giants for years. The moratorium, the regulator claims, has not made the declines measurably worse. In May there were 10,735 vehicles working with livery bases, down 24% from a year earlier—compared with a 28% plunge in the preceding year, before the license freeze.
The regulator questioned the livery industry’s proposal for a restricted license that would not be subject to the moratorium.
“We’ve spoken to many drivers and have never heard this be advocated or brought up as a solution,” a spokeswoman said. “We want to make sure that drivers have the flexibility to maximize their earnings by working in different sectors.”
She pointed out that the for-hire industry has 120,000 vehicles and 200,000 licensed drivers who could sign up to work for a livery if they wanted.
Other observers are concerned that Uber could use the restricted license to add drivers through its own livery bases. They also say that although a regulation telling drivers where they could and could not work would represent a degree of control appropriate for employees, drivers are independent contractors.
The issue of employee classification, always controversial for the ride-hail companies, is especially so now, as the California Legislature prepares to vote on a bill that would classify gig workers as employees.
A not-so-unified front
Backers of the restricted license, who do not agree on all specifics, see ways around the criticisms.
Avik Kabessa, chief executive of the Carmel car service and a board member of the Livery Round Table trade group, wants the high-volume services—including Uber and Lyft—forbidden from dispatching rides to vehicles with the restricted license. In addition, base operators would have to agree to dispatch to each other’s restricted-license cars. He said that was how the industry used to work before the Taxi and Limousine Commission established new rules in 2014.
Kabessa added that the problem of Uber poaching his drivers through its livery bases has gotten worse with the license cap.
“A driver can be en route to pick up my customer and is suddenly being offered a triple-price surge fare by Uber, and he will just take the Uber fare and tell me he cannot do mine,” Kabessa said. “It happened before the cap, but I could recover better before.”
Altamirano and Clemente say requiring agreements between base operators for dispatching restricted-license vehicles would be impractical and reduce drivers’ flexibility. But they agree that the commission could make use of its high-volume category, created last year to regulate Uber, Lyft, Juno and Via, and simply prohibit those operators from working with vehicles with the restricted license.
Some mom-and-pop operators say the restricted license would not only help them recover but allow them to serve new areas. It also would make up for the fact that most livery and traditional black-car bases have no budget for attracting drivers through marketing or bonuses, as the app-based operators have traditionally done.
“I can’t afford to run a commercial on the major television channels,” said Albert Williams, owner of northeast Bronx–based livery car service Best Deal. “I run commercials on local News 12, but that’s more for customers than for drivers.”
Best Deal has been growing rapidly in the past few years, providing transportation for Montefiore Medical Center, Albert Einstein College of Medicine and passengers making Medicaid-funded trips. Drivers serving that segment can pick up more than one passenger at a time, with each fare running from $15 to $18 and sometimes adding up to more than $30 per hour over a shift. The base keeps 20% but does not charge drivers a weekly base fee as long as they complete at least 60 trips within seven days.
Gregory Barrett, a new father of twins, began working for Best Deal in the fall. Working long hours and scoring multiple pooled rides, he has grossed as much as $2,500 in a week, although $1,500 is more typical for 40 to 50 hours of driving. But, lacking a TLC vehicle license, he pays $400 each week to drive a licensed minivan.
“I am literally giving away $1,600 a month to someone else,” Barrett said.
The number of drivers willing to do that is limited, Williams has found. Before the cap, he was signing up five to seven drivers per week. He now averages one. “We can’t grow organically,” he said.
He is eyeing more business in the medical sector. “But I can’t go after it,” he said, “when there’s a limited driver pool.”
Uber And Lyft Drivers Slow Down NYC Traffic To Protest App Changes
Traffic was backed up on the Brooklyn Bridge and FDR Drive on Tuesday when hundreds of Uber and Lyft drivers conducted a “slow vehicle procession” toward Gracie Mansion to protest new changes to the companies’ apps. Drivers are arguing that the companies are preventing them from earning a living—and want the Mayor and City Council to step in.
According to the Independent Drivers Guild, “Starting on Tuesday Uber will enact new policies to kick drivers off the apps between trips and in areas of lower demand in order to avoid paying drivers as required by New York City’s pay regulations. Lyft enacted a similar policy earlier this summer to protests from the Drivers Guild. The New York City Taxi and Limousine Commission has failed to take action, so the Drivers Guild is calling for the Mayor and City Council to stop the apps from violating the pay rules in an attempt to scam drivers out of fair pay.”
In June, Lyft changed its policy to comply with minimum-wage laws. As Crain’s explained it, “The new payment formula looks at how much of the time a driver cruises with an empty car. The more cruising a driver does, the more fare revenue the app-based company needs to share to ensure the driver makes at least $17 an hour after expenses. App-based services with a high ‘utilization rate’—meaning their drivers are ferrying passengers nearly 60% of the time—can contribute less to the driver’s pay. To reduce congestion in Midtown the Taxi and Limousine Commission wants fewer empty cars.”
Now Uber is following suit, not that it nor Lyft want to; Lyft had filed (and then dropped) a lawsuit challenging the minimum wage rule, while Uber said in a statement on Monday, “Time and again we’ve seen Mayor (Bill) de Blasio’s TLC pass arbitrary and politically-driven rules that have unintended consequences for drivers and riders.”
The Independent Drivers Guild argued, “By logging drivers off the app and requiring them to travel to an area of higher demand in order to pick up their next trip, Lyft would be shifting the costs of travel and waiting time onto the drivers and in so doing, violate this commission’s rules.”
NYC’s own yellow cab industry is in crisis, in part because of increased competition from the app-based services. The IDG has asked for a Drivers’ Bill of Rights, which would prevent the apps from deactivating drivers without a stated cause, among other guarantees.
Uber to limit drivers’ app access to comply with NYC regulation
Uber on Tuesday will begin limiting drivers’ access to its app in New York City to comply with regulation aimed at boosting drivers’ pay and easing congestion in Manhattan, laws that Uber says will have unintended consequences.
Uber Technologies Inc’s move to lock out drivers at times and in areas of low demand comes just months after rival Lyft Inc implemented similar measures in response to city regulation.
Both companies oppose the unprecedented rules, saying they will prevent drivers from earning money and cut off low-income New Yorkers in remote areas not serviced by regular taxis, a claim the city rejects.
“Time and again we’ve seen Mayor (Bill) de Blasio’s TLC pass arbitrary and politically-driven rules that have unintended consequences for drivers and riders,” Uber said in a statement on Monday.
New York City’s Taxi and Limousine Commission (TLC) last year implemented several laws challenging the way ride-share companies operate in North America’s largest city, one of the industry’s largest markets.
The agency’s acting commissioner, Bill Heinzen, in a statement on Monday defended the laws, saying they held companies accountable and prevented Uber and Lyft from oversaturating the market at drivers’ expense.
New rules cap the number of app-based, for-hire cars and established minimum pay for the city’s 80,000 ride-share drivers based on how much time they spend transporting passengers.
The laws also limit the time drivers spend “cruising” – driving to or waiting to pick up new passengers. Starting in February, ride-share companies have to reduce cruising rates by 5% and later by 10%, down from currently 41%. Non-compliance can result in fines or even the inability to operate in the city.
The rules are aimed at reducing congestion in Manhattan, where ride-share vehicles make up close to a third of peak time traffic, according to the TLC.
Uber said there was no evidence showing the steps would ease congestion. The company supported a $2.75 congestion surcharge implemented for Manhattan ride-share trips earlier this year.
Lyft in June changed its app to lock out drivers during low demand. The company said it supports drivers during the change, for example by showing them areas with high demand or times during which restrictions are lifted.
The New York Taxi Workers Alliance, a union representing taxi and app-based drivers, said the companies were trying to scare drivers.
“Uber is now spreading fear and disinformation to New York drivers, attempting to convince workers that rules protecting their livelihoods are to blame for Uber’s greedy policies,” the union said in a statement.
Plans for Melbourne’s flying taxi service get serious as Uber Air head appointed
Uber has announced the appointment of Natalie Malligan as the new head of Uber Air for Australia, charged with getting the company’s flying taxi service off the ground in Melbourne.
Announcing the appointment in a blog post late Monday, Uber Australia said Malligan will be responsible for making Uber’s ambitious urban aviation plans a reality, working alongside the Victorian government, Melbourne Airport, federal aviation agencies, and Melbourne communities.
Uber Air has been touted by the company as an “urban aviation ride-sharing product”, which it hopes will ease traffic congestion on the ground.
Melbourne in June was announced as the third pilot city for Uber to trial Uber Air, and the first outside of the United States.
Test flights have been pencilled in for next year, with plans for commercial operations to commence from 2023.
“In the long term, the vision is for safe, quiet electric vehicles transporting tens of thousands of people across cities for the same price as an UberX trip over the same distance,” Uber said in a statement when announcing the initiative down under.
The company in August last year announced five possible markets to launch its pipedream: Australia, Brazil, France, India, and Japan. It also confirmed that from 2023, customers will be able to get a flight on-demand in Dallas and Los Angeles.
Uber had in February told an Australian House Infrastructure, Transport and Cities Committee that it was keen to trial Uber Air in either Melbourne or Sydney and that it just needed Australian governments to work alongside the Silicon Valley darling to make that happen.
In announcing Uber Air was coming to Australia, the company announced partnerships with Macquarie, Telstra, and Westfield-operator Scentre Group, and said it would work with existing partners including Melbourne Airport to develop the infrastructure and telecommunications needed to create the aviation network.
Malligan was previously Uber’s head of cities for Australia and New Zealand.
She previously worked as a manager in Bain and Company’s Private Equity practice in San Francisco and Sydney and holds a combined Bachelor of Commerce and Law degree from the University of Sydney, and a Master of Business Administration from Columbia University in New York.
Meanwhile, Airbus is working on its own air taxi product, Vahana, with the company in July showing off a full-scale demonstrator vehicle that recently completed a full transition flight.
Vahana has undertaken more than 80 flight tests since last year, which the company said help to validate the overall design and configuration. The lessons learned from Vahana, Airbus said, will enable Airbus Urban Mobility to develop a future market-ready electric vertical take-off and landing (eVTOL) vehicle.
Airbus also has a partnership with Audi.
In the eVOTL space, there’s also competition coming from NFT with its Aska dual-purpose vehicle designed both to drive on roads and to fly through the air; Kitty Hawk, funded by Google co-founder Larry Page and led by self-driving car pioneer Sebastian Thrun; Ehang from China; Terrafugia, which hopes to sell its flying car in 2019; and AeroMobil in Slovakia, which like NFT, hopes for a hybrid flying-driving vehicle.
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