Cuomo’s “Upstate” Uber Bill Could Flood NYC With Illegal Ride-Hail Traffic

Ubers and yellows — always competing. Photo: Max Pixel
Ubers and yellows — always competing. Photo: Max Pixel

Don’t call it an “upstate” Uber bill.

Lax rules laid out in Governor Andrew Cuomo’s bill enabling companies like Uber and Lyft to operate outside the five boroughs could end up flooding New York City with illegal ride-hail trips, according to an industry expert who served as the top taxi regulator under Mayor Michael Bloomberg.

The legislation lacks key mechanisms that the Taxi and Limousine Commission uses to regulate the livery industry in New York City. Without changes to the bill, warns former TLC commissioner Matthew Daus, vehicles affiliated with livery bases outside the city could easily make pick-ups inside NYC, increasing traffic and undermining a recently-enacted rule to open up data on ride-hail trips.

The bill, which Cuomo tried and failed to rush into law in December, is now a centerpiece of his 2017 agenda [PDF]. While the bill is being framed as legalizing ride-hailing services in the 57 counties outside of New York City, its effect within the city could be substantial.

Taxi regulators in New York City, Nassau, and Westchester currently allow livery drivers to travel between jurisdictions as long as trips are pre-arranged and start or end where the vehicle is based. As a result, an impossible-to-enforce e-hail “black market” flourishes in Nassau and Westchester, where the services are technically still illegal.

A good regulatory regime would legalize ride-hailing outside New York City while applying a consistent set of rules and enforcement practices throughout the state. But Cuomo’s bill fails to complement NYC’s existing rules and threatens to weaken the city’s current regulatory framework.

Once Uber and Lyft can be legally based in Nassau and Westchester, for instance, it will be difficult to prevent them from picking up passengers in the city, especially since unlike their NYC counterparts, who have special TLC plates, upstate ride-hail drivers would only be required to have a removable decal on their windshield.

That would thwart the city’s ability to enforce illegal pick-ups and regulate the number of for-hire vehicles on NYC streets, says Daus, a former TLC commissioner who is currently a partner at the law firm Windels Marx. (Daus says his firm has no ties to the taxi industry and is not lobbying for or against any livery bills.)

An Uber spokesperson emphasized that the bill does not allow ride-hailing companies licensed by the state DMV to do pick-ups in the city. Rules enabling pre-arranged trip providers in the counties to pick up and drop off in the city, and vice versa, would not apply to upstate ride-hailing drivers. But the letter of the law is not in dispute. What’s lacking is an adequate system to make sure the companies and their drivers comply with the law.

“The reality is that the Ubers and Lyfts are going to pick up in NYC and nobody is going to stop them,” Daus warned. “They’ve done this on purpose, they do not want there to be any enforcement.”

The TLC employs 175 enforcement agents but would need more to handle an influx of cars coming from outside the city.

In Cuomo’s bill, the agency tasked with enforcement is the DMV, which has much less capacity to regulate ride-hailing companies than the TLC. The bill doesn’t change that. “They did this on purpose so [the ride-hail industry] won’t be regulated,” Daus said. “It’s de-regulation and self-regulation in disguise.”

The bill has several other troubling provisions. Trip data, which the TLC recently required for ride-hail vehicles based in the city, would not have to be disclosed in Cuomo’s bill. Instead, the state DMV could only “visually inspect” a “sample” of ride-hail companies’ data at a physical location.

And the records that companies do give over, including those pertaining to criminal investigations, would be exempt from the state’s Freedom of Information Law.

Some parts of the bill have drawn criticism from upstate lawmakers, who worry that the insurance mandate is insufficient. Upstate taxi industry groups have also criticized the bill’s scant background check requirements, which do not include fingerprints.

What’s drawn less attention is the effect on New York City’s transportation system. Just as the city is poised to get a better understanding of how the burgeoning ride-hail industry is affecting streets and traffic, Cuomo’s bill could deliver a major setback.

Correction: This post originally stated that the bill only requires insurance coverage while a passenger is in a TNC vehicle. The bill in fact requires coverage “while the TNC driver is logged onto the TNC’s digital network” and “while the TNC driver is engaged in a TNC prearranged trip.” The copy has been removed from the post.

  • com63

    Seems like the apps should have built in geofencing and that would solve this problem. If your car was registered in Westchester, you could only make pickups in the city who were going back to Westchester. You would not even be given the option of picking someone up in the city that was going to another city destination.

  • Rob Black

    Geo-fencing must be added otherwise Uber will monopolize the whole industry because it is not operating by same laws and regulations as taxis do.
    People don’t realize that this “legalization” is in essence allowing Uber to operate outside of the existing regulatory and legal framework forced upon taxi drivers and local car services.
    When you have unfair competition, you in fact are enabling monopolization.

  • Chuck Cotton

    This bill is rigged and tainted like other state bills that have been passed. The bill violates the NY State Constitution and severely conflicts with the existing state transportation statutes as well as the NYC’s TLC rules and regulations.
    Rideshare drivers first must have a Federal Motor Carrier # and a PRIMARY commercial public auto liability insurance policy on their vehicle. The USDOT/FMCSA laws are clear and supersede all State laws. Rideshare drivers are NOT taxicabs as they only use sedans and SUVs. Taxicabs are exempted from Federal regulations. Such rideshare drivers are independent small businesses who operate their private vehicle as a livery vehicle for hire. Uber and Lyft are cyberspace app companies who sell subscriptions to both the driver and the passenger to use the app. The app matches driver and passenger. The driver is clearly the motor carrier and subject to all existing livery transportation laws. He pays 25/30% of the fare to the app company. The passenger pays the gross fare.
    Uber and Lyft fraudulently controls all portal to portal operations and really is the motor carrier but disguises themselves as a non-transportation carrier. This scheme is to circumvent all taxes, employment benefits, providing a PRIMARY insurance policy on each vehicle. all police vetting of drivers, city controls in regulations and enforcement, driver physical and drug exams and I-9 registration with Uber and Lyft.
    Obviously, the app company’s lobbyists and attorneys have gotten to the Governor and the legislators. If they pass this bill, then the whole livery industry will self deregulate.
    The livery situation will worsen as the passengers are not protected as there is no legitimate livery insurance to cover them.
    The so called policies issued by private carriers such as Farmers, State Farm, Geico, Erie, USAA and Allstate are clearly invalid. NO INSURANCE COMPANY CAN ISSUE A COMMERCIAL LIVERY PRIMARY PUBLIC AUTO POLICY TO A NON-PERMITTED DRIVER AND VEHICLE. iNSURANCE FRAUD IS A FELONY.

    The Uber/Lyft bluff of the past six years is over as America and world cities have awaken to the worldwide scam. Now rideshare insurance scams will quickly be eliminated.

  • Christina

    This is a shame so many people are losing their jobs to these companies. I don’t understand how people can trust these companies after all the crimes that have happened. I use the taxi app E-HAIL ( same convenience but trusted drivers.

  • cjstephens

    I’m not saying I like any of these companies (Uber, Lyft, etc.), but frankly the alternatives are just as bad, if not worse. If the cab companies hadn’t abused their monopoly in New York and other cities, no one would need the likes of Uber.

  • cjstephens

    I get that the details of the proposed bill are probably terrible (because Albany, right?), but it is high time ride-hailing, or whatever we’re calling it, comes upstate. I was seriously considering taking a job in Buffalo recently, and as a car-less New Yorker I was attracted by the possibility of living and working downtown without a car. There still aren’t any grocery stores in downtown Buffalo, and I thought I could simply Uber once or twice a week for groceries and still be ahead of the game when it comes to the expense of owning a car. Except there is no Uber in Buffalo (or Lyft or whatever). Living at the mercy of crappy cab companies is yet another way (albeit a small one) that state government is keeping cities upstate from recovering. The governor has no problem throwing the “Buffalo Billion” at his cronies, but something that could help ordinary people get around? Well, he has his troopers to drive him everywhere, so what does he care?

  • Rex8976

    Look anywhere Uber and Lyft have invaded to see how well TNCs comply with whatever watered down regulations come their way. They do what they want, when they want.

    No matter your opinion of taxis, explain the logic of flooding any market with vehicles. None of the drivers are able to thrive since the pie never gets any larger, just the numbers of hungry mouths.

    Yes, the public wants this because of cheaper rates. Uber does not have any skin in the game, no cars to maintain. Their rates make it unsustainable to operate a vehicle for hire. Annual maintenance for a taxi is roughly $5,000.00. It doesn’t matter what, if anything, is painted on the outside. Miles are miles. Tires wear, brakes wear, parts wear.

    “It’s what the people want,” is an oft heard refrain. If that’s the case, I’d like to set up kiosks in all high schools to sell beer and weed. After all, it’s what those people want.

    Every time an Uber driver picks up a passenger, insurance fraud is committed.

    One more thing, when (not if) Albany gives TNCs carte-blanche the taxi companies and their drivers will still be locked into the same regulations that make it impossible to compete.

  • Dan Nitescu

    UBERr it is already flooding NYC with illegal Ride-Hail traffic. Large number of UBER drivers pickup passengers outside UBER platform bypassing the company.

  • Richard Saporito

    If an uber passenger takes a ride illegally from an uber driver operating in an area where unlicensed:

    Is this passenger still covered by insurance in case of an accident?


Ubers and yellows — always competing. Photo: Max Pixel

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