In a surprise move, The Taxi and Limousine Commission (TLC) decided not to vote today on a set of rules that would limit the way that For-Hire Vehicle services operate in New York, as BuzzFeed News reported on Wednesday.
The public hearing — which saw representatives from Lyft, Uber, Uber Drivers Network of New York, individual Lyft and Uber drivers, the Livery roundtable and the Black Car Assistance Corporation — was entirely devoted to statements of the parties involved, a testimony to the complexity and importance of the issues at stake in the coming vote.
The intention of the rules is to protect drivers — and guarantee insurance for drivers through the Black Car Fund or the Livery Fund. Under the proposed rules, companies can no longer dispatch drivers from bases that the drivers are not affiliated with unless the two companies have some type of agreement. Furthermore, and perhaps less divisively, the proposed rules would also require bases to submit trip logs for all rides dispatched.
Uber and Lyft opposed the new rules, whereas livery and black car services that appeared approved — and in some cases expressed their gratitude for — the move to change the rules as they stand.
However, among the parties affected, it became clear that Lyft — which only has 10 drivers affiliated with its own base — stands to suffer the most under the new rules.
As David Estrada, Lyft's vice president of government relations, argued to the TLC, if the one-base rule is instated, Uber would be incentivized to use its plentiful resources to pay to lure drivers away from other bases:
"Here's what I think is going to happen. We are going to be forced to go lure the drivers to leave their affiliated base and go work with us, so we go and we lure these drivers with bonus payments...At the end of the day, the largest player — I will not name names — who is the most well capitalized even though they don't like this rule, they're incentivized by this rule to pay very, very large bonus payments to get enough drivers to affiliate with them."
In effect, Estrada argued, Uber would eventually monopolize the industry.
"That is a company that wants to grow and grow and grow like we all do and if you want to grow and grow and grow, ultimately you want all of the drivers," he said.
Given the implications of the proposed rules, the TLC's choice not to vote in the face of heavy opposition comes as a victory for Lyft, and to a lesser extent, Uber. David Mack, Lyft's director of public affairs, said he felt "very good" about the outcome of the hearing and the commission's decision not to vote on the rules.
Though Uber agrees with Lyft — a rare occurrence — on its stance against the proposed ruling, Uber's general manager in New York, Josh Mohrer, had different reasons for his opposition to the new rules. First and foremost, Mohrer argued that 1/3 of Uber's thousands of drivers in New York only drive for Uber part-time. Mohrer, who took the podium first, came prepared with a packet of papers that listed the names and information of drivers who were using Uber as a source of supplementary income.
"The proposed rules would not only prohibit black car drivers from using Uber without written consent from their base but would also prohibit livery drivers entirely because of the restriction on cross-class dispatch," Mohrer said to the TLC. "Prohibiting cross-class affiliation would also eliminate our ability to dispatch almost 2,000 street hail livery drivers that currently use the Uber app."
Mohrer's second argument — one that Estrada said Lyft did not agree with — specifically disputed the proposed rule that would require all for-hire services to submit their trip logs electronically. According to Mohrer, the act of providing a computer file — rather than a paper document — would allow for a third-party to mine the file for information, a practice that could qualify as disclosure of trade secrets.
This particular argument was met with a great deal of skepticism from the commissioners. LaShann M. DeArcy, a business lawyer by trade, asked why Mohrer felt the FOIA laws that protect against disclosure of trade secrets (if in fact the information qualified as trade secrets) was not a sufficient protection.
"You're not a lawyer so I'm not going to hold you accountable to understanding the laws regarding what rises to the level of trade secret," DeArcy said, "But I will tell you that your example likely would fail miserably."
Cira Angeles, president of the transportation, home and business insurance firm LA Riverside Brokerage, said mandatory trip logs paired with the requirement that a dispatching base establish an agreement with the affiliated base, would ensure accountability on all sides. Without these rules, passengers with complaints or serious issues will not know who to turn to to rectify these issues. Further, the affiliated base is left to the virtually impossible task to track down who dispatched which driver and when.
The Uber Drivers of New York also took to the podium. Organizer Abdoulrahime Diallo echoed the same sentiment he did in the conference call he organized with the rest of the Uber Drivers Network earlier this week: without a one-base rule drivers are treated as cheap and easily replaceable commodities.
But according to Mack, a one-base rule would be a detriment to the drivers' income, rather than protecting it. HIs reasoning being that bases operate based on geography. If a driver finds himself in a location outside of the parameter of his own base he can no longer accept rides and will remain idle until he reenters the the boundaries of his affiliated base.
In fact, many drivers that spoke independently of any organization or network that work for more than one company agree that the current rules afford them the freedom and flexibility they find necessary to make a livable income. While others, who use Uber or Lyft as a primary source of income, still agree with Diallo and the Uber Drivers of New York that the market would be over saturated and they would get fewer requests and in turn less income if the proposed rules were not passed.
If the turn out at the public hearing was any indication of the larger picture, it seems wise that the TLC opted not to vote definitively on the rules. The positions of representatives of the respective contingencies affected by these rules are either on one extreme or another, with very few moderate opinions. It may have been seen as premature to vote given the divisiveness of the topic.
Johana Bhuiyan is a tech reporter for BuzzFeed News and is based in New York. Bhuiyan reports on the sharing economy with a focus on ridesharing companies.
Contact Johana Bhuiyan at firstname.lastname@example.org.
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