For 80 years Yellow Cabs have been uniquely successful in New York City, that is until Uber, Lyft and the other app-based networks undermined the industry. This is a huge loss. A street-hail cab system that offers prompt transportation in safe, inspected, insured cabs with a meter and fixed fee is a huge public service. This is especially true in the dense business districts and transportation terminals like the airports. App-based services have no advantage at these locations.
Some changes favorable to Yellow Cabs have been made. Mayor de Blasio lifted an $1100 fee only paid by Yellow Cabs, and the New York City Council is acting to equalize the commercial motor vehicle tax so that Yellow Cabs will not have to pay more than black cars. Still the Yellow Cabs pay fees that no other car services pay: a 50 cent per ride MTA tax, a 30 cent assessment per ride to support accessible taxis, and Yellow Cab riders also pay the $2.50 MTA tax. The result: the meter registers an off-putting $3.30 in taxes before the cab has moved an inch.
The Yellow Cab monopoly that justified those taxes and fees has ended. The MTA surcharge should be removed immediately to begin to address the broken economics of the Yellow Cab industry. The City, after all, fostered the medallion system and benefited directly by selling medallions at inflated prices. Five to ten billion dollars of medallion value have been lost. The City bears major responsibility for these losses and should now help stabilize the industry by removing monopoly-based taxes.
The City should also help to improve Yellow Cab service. Uber, Lyft and the app-based services have changed the expectation of customers. Customers expect more, but the City does little to enhance the Yellow Cab customer’s experience. City-fostered cab lines at Grand Central, Penn Station and other locations are poorly located, under supervised, and create traffic jams. Passengers stand in all kinds of weather. Empty cabs have to fight to get to the curbs, and starters are often absent. Bus stop shelters are more attractive and better managed.
Changes need to occur even though they will not bring back the value of the medallion or the lives lost to suicides. But changes made now will begin to help preserve the Yellow Cab industry.
Ross Sandler (Director of the Center for New York City Law and former Commissioner of the NYC Department of Transportation (1986-1989)).