It’s Not Too Late to Fix Cuomo’s Awful Uber Bill

Photo: Shuggy/Flickr
Photo: Shuggy/Flickr

A bill that Governor Cuomo wants to enact in a special session presents a perfect opportunity to refine how New York regulates for-hire vehicles, but leaked details of the legislation suggest the administration is on the verge of letting it go to waste.

The bill aims to set up ground rules for companies like Uber and Lyft to operate in upstate cities. It’s a rare moment where the state has a lot of leverage to extract concessions, like making ride-hail companies release their trip data. What’s emerged so far, however, suggests the bill will instead be a hodgepodge of provisions to please and appease various interest groups in the for-hire vehicle industry.

While it’s late in the game, the bill appears to be in flux and there’s still time to fix it. Here are three ways in which the final product could and should serve the public interest.

Make Uber/Lyft trip data publicly accessible

Politico’s Dana Rubinstein reports that a provision in the bill will shield Uber and Lyft from the state’s freedom of information law. This would be a giant step backward and set a terrible precedent.

Origin, destination, and route data for Uber/Lyft trips is essential to smart regulation of the for-hire industry. With this information, cities can gain an understanding of:

  • How people use for-hire services and how changes in the for-hire industry affect the broader transportation network (e.g., is Uber increasing congestion?)
  • How to use pricing mechanisms to prevent Uber/taxi gridlock (especially useful for congested downtowns)
  • How to adjust bus routes to better align with travel demand
  • Where transit agencies might want to subsidize for-hire service to supplement fixed-route service

Transportation analyst Bruce Schaller told Streetsblog last year that without access to trip data, crafting good rules for the for-hire industry is like “throwing darts in the dark.”

And that’s how it will stay if Uber and Lyft get to keep their data out of public view forever.

Level the playing field between conventional taxis and Uber/Lyft

The for-hire industry will work better for customers if competing companies are regulated fairly, without giving some interests a leg up on others. In New York City, for instance, the TLC has imposed uniform licensing requirements for both yellow taxi drivers and Uber drivers.

The taxes and fees assessed on different types of for-hire vehicles are not level, however. In New York City, yellow taxis are subject to a 50-cent fee per trip, which is earmarked for the MTA. Uber, Lyft, and all black cars, meanwhile, do not pay the MTA surcharge, but are subject to city and state sales taxes that do not apply to yellow cabs.

A uniform system of taxes and fees should apply to companies operating in the same market, but according to the latest information available, Cuomo’s bill does not attempt this. Instead, black cars in NYC, including Uber and Lyft, would continue to be exempt from the MTA fee and subject to the sales tax.

Fix a broken MTA funding formula

The MTA fee on yellow taxi trips raises more than $80 million per year. But as Uber and Lyft take market share away from yellow cabs in NYC, budget analysts warn that they are destabilizing this source of revenue for the transit system.

The fee has also been set at a flat $0.50 since it was enacted in 2009, and inflation is eating away at its value.

There are different options for restructuring the MTA fee, including turning it into a variable fee that rises in congested locations. But an easier fix that could be enacted right now would be to simply raise the MTA fee to $1 per trip and have it apply uniformly to all for-hire trips in New York City.

  • ahwr

    But an easier fix that could be enacted right now would be to simply raise the MTA fee to $1 per trip and have it apply uniformly to all for-hire trips in New York City.

    Right now black cars pay sales tax of 8.5% combined to the city and state, and 0.3775% to the MTA. CBC says that sales tax worked out to ~$2.50 per trip in 2015. Are you asking to add on $1 to that, replace the ~10 cents per trip they paid to the MTA in sales tax, or replace the entire sales tax, replacing the 2015 $166 million tax bill, with $7 million going to the MTA, $75 million to the state, and $84 million to the city with a $66 million tax bill with all of it going to the MTA?

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  • Rob Black

    Lack of regulations – be it due to regulatory failure as in NYC, or lack of regulatory framework is NOT a competitive advantage and should not be considered as such.
    The table is tilted, folks.
    What cabbies are forced to pay in taxes, regulatory dues, business licenses is FAR MORE costly that what multi billion dollar Uber corporation is paying, which is – close to nothing. How can we talk about competition when the very basic requirements and dues are not the same? Add to this a FACT that taxi apps existed long before Uber was founded and you will start seeing the picture. Uber’s expansion is result of intentional regulatory failure and inaction allowing few billionaires to create yet another monopoly. This time in transportation.

  • ohnonononono

    Right, it’s unclear.

    I don’t see any reason why yellow cabs should be exempted from the normal sales and use tax that’s assessed on most other goods and services in New York. It seems odd to hear a lot of complaining that Uber doesn’t pay the 50 cent MTA fee while no one seems to question yellow cabs not paying the regular 8.8775% sales tax that all black cars– and by extension Ubers– have always paid, and which as you note works out to far more theoretical lost revenue. (Although the portion of that tax per ride that goes directly to the MTA is lower.)

    I think the best solution would probably be to have all rides in all vehicles subject to sales tax AND the 50 cent MTA fee. Requiring Uber to pay both the fee and sales tax while yellows only pay the 50 cent fee feels like intentionally demonizing Uber for their recent growth or something. Why advantage yellow cabs?

  • David Morris

    The more regulations you impose, the more prices go up, the harder it is to go carless. Keep Uber as free as possible.

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