Experts: Exempting Yellow Taxis From Congestion Pricing Won’t Help Cabbies

Council Member Ydanis Rodriguez rallied at City Hall Tuesday to call on Gov. Cuomo to exempt yellow taxis from congestion pricing fees. Photo: Julianne Cuba
Council Member Ydanis Rodriguez rallied at City Hall Tuesday to call on Gov. Cuomo to exempt yellow taxis from congestion pricing fees. Photo: Julianne Cuba

A City Council proposal to exempt yellow cab drivers from the coming congestion pricing tolls is the wrong way to help suffering cabbies buffeted by a collapsing medallion market and competition from Uber and Lyft, experts told Streetsblog.

Manhattan Council Member Ydanis Rodriguez and his Bronx colleague Fernando Cabrera said Tuesday that Gov. Cuomo should immediately rescind a congestion surcharge that cabbies have been collecting since February — plus exempt yellow taxi drivers from paying the congestion pricing cordon fee once it goes into effect in 2021.

The council members’ press conference with cab drivers came two days after a blistering expose in the Times revealed the decades-long roots of the taxi medallion mortgage crisis and the city’s role in feeding it.

“The proposed solution does not match the problem,” said Ben Fried, communications director at TransitCenter. “Those fees are not going to have an impact on the financial hardships facing taxi drivers, who were victimized during this asset bubble. Once the cordon toll kicks in, taxi drivers should benefit because they will be able to complete more fares in a given amount of time. This exemption could actually come back to bite taxi drivers.”

Congestion tolls on drivers entering Manhattan’s congested central business district are expected to raise $1 billion to fund the MTA’s capital expenditures. Some limited carve outs have already been granted, but transportation experts and advocates warn that giving taxis one as well does nothing to solve their financial woes, and will only hurt already-struggling drivers even more by not eliminating congestion.

Traditional taxi drivers started charging $2.50 more per ride for all trips below 96th Street in February as part of a state effort to raise money for the beleaguered subway system (Uber and Lyft collect a $2.75 per ride surcharge, and shared pool rides collect a 75-cent fee). The extra charge is passed onto the passenger who gets into the cab, but the two pols and yellow taxi advocates say the extra fee is cutting into what drivers take home — since February, they claim their revenue has dropped 15 to 20 percent.

“Our taxi drivers, many of whom are immigrants, are suffering from already imposed congestion pricing that went into effect in February,” he said. “The taxi industry is already doing their contribution. We have a moral obligation to call for an exemption on taxi drivers from congestion pricing.”

Despite the cabbies’ complaints that their revenue is down, trips made since February have actually gone up, according to the Taxi and Limousine Commission. There were 247,315 trips on the average day in February, 2019, when the surcharge kicked in. But by April, daily averages had risen slightly to 252,634. Those numbers are still far below daily averages in the days before competition from Uber, Lyft and other disrupters.

So the surcharge isn’t the culprit claimed by Rodriguez and Cabrera, who, it should be noted, opposes congestion pricing overall and may be seeking a back door for larger toll exemptions for cabbies — what transportation expert Charles Komanoff calls the “mother of all carve outs.” Taxis of all kinds contribute mightily to traffic — with yellow taxis making up 20 percent of the vehicle miles traveled in Manhattan’s Central Business District and Ubers, Lyfts and the like comprising another 27 percent, Komanoff has said. Congestion zone surcharges on yellow taxis and Ubers could generate $500 million or more per year, in addition to the $1 billion to be generated by cordon fees on cars and trucks, he added.

Without proposing an alternative revenue source to fill in for the yellow cab exemption, Rodriguez’s proposal should be dead on arrival, said transportation expert, Bruce Schaller.

“It’s political grandstanding unless you have an alternative revenue source you’re willing to propose,” said Schaller, who has long analyzed Uber and Lyft’s impact on the city. “It’s a non-starter. What he’s saying is defund the MTA.”

Komanoff argued back in January for a five-point plan to address congestion while taking into consideration taxi drivers’ financial struggles — including calling on Albany to rescind its flat-fee congestion surcharges on for-hire vehicles until the full congestion pricing toll goes into effect. But exempting yellow taxis entirely from congestion pricing would be a huge mistake, he said.

“I agree with the injustice of charging yellow taxis before the cordon toll, but once we’ve done the cordon toll, yellows have to be surcharged along with Ubers and Lyfts,” said Komanoff.

But Rodriguez — who told Streetsblog back in February when he ran for Public Advocate that his “top transportation priority will be to reduce the number of vehicles on our streets” — wasn’t biting at that either. He insisted that yellow taxis must be exempt from all tolls since they have already contributed their fair share to the cash-strapped MTA, and have already seen declining revenues since the surcharge kicked in this winter.

“We have a moral obligation to call for an exemption on the taxi drivers from the current surcharge as well as the one to come,” Rodriguez said when asked by Streetsblog if he would support Komanoff’s plan to rescind the surcharge only until congestion pricing goes into effect. “Our drivers, many of whom are immigrants, are suffering from the already imposed congestion pricing that went into effect in February.”

Rodriguez’s proposal to exempt yellow taxis from congestion pricing tolls is so far the only concrete idea being floated to help struggling taxi drivers in the wake of the Times’s story. Other politicians have ordered up investigations: Mayor de Blasio, who ran the city as the taxi medallion crisis exploded with bankruptcies and suicides; and Attorney General Letitia James, who was public advocate during much the same period, are now saying they’ll pursue remedies.

And Council Speaker Corey Johnson, who had shut down the committing overseeing the industry, announced he’d soon appoint members to a new task force to study it.

  • Larry Littlefield

    How about Chapter 11 bankruptcy? It worked for the airline industry. The income from driving no longer covers the inflated debt on the medallion, so write it down for individuals — but not for those who tried to corner the market.

    The city could organize the mass chapter 11 and help fund the lawyers.

    How about Chapter 11 for the MTA, NYC, NJ, CT, those with excess student loans etc. etc. etc.

    There is so much excess debt that has been run up to support this unsustainable economy that the choices are defaulting it away, inflating it away, or facing perpetual stagnation.

    But special interests always want to socialize the losses after the gains have been privatized, so they get to keep the full value of those pieces of paper that theoretically entitle them to a huge share of everyone’s future work. If the rich robbed the future from the serfs, why can’t we do it too?

  • Zero Vision

    Ydanis is no friend to safe streets. He stands up and calls for more bike lanes and car-free days, but caved in the face of opposition to the Dyckman bike lane in his own backyard. He wants to give more placards to the press, who will only use them to block bus stops and bike lanes. And now this. Pick a position, sir, and stick with it! You can either have fewer cars in this city and more bike lanes OR you can exempt cabbies from congestion pricing and reporters from parking rules.

  • Joe R.

    Good ideas. Also, I think it’s funny how Elizabeth Warren’s plan to wipe out most student loan debt has come under such heavy criticism, and yet we bailed out rich people who made highly speculative investments after 2008, and who would still have been rich even if we didn’t. At least with mass student loan forgiveness, that money would be pumped right back into the economy, probably over time generating as much in taxes as it cost. Sadly, it seems to rub people in power the wrong way whenever we even think of doing anything which benefits the common people.

    There is so much excess debt that has been run up to support this unsustainable economy that the choices are defaulting it away, inflating it away, or facing perpetual stagnation.

    Off all three choices, defaulting it away is the least painful for a bunch of reasons. In many cases, those who lose by defaulting it away are rich corporations and individuals who will just be made less rich. In a sense their wealth was made off the backs of underpaid workers and by underpaying taxes, so they’re really just giving back some of what they took.

  • iSkyscraper

    Oh look, Fernando Mateo’s two puppets are talking.

  • iSkyscraper

    The Dyckman fiasco is his front yard more than his back yard, and he caved to opposition that came solely from business owners demanding double parking and not his actual constituents.

  • Larry Littlefield

    “We bailed out rich people who made highly speculative investments after 2008, and who would still have been rich even if we didn’t.”

    Don’t underestimate what might have happened in 2008. Still, I wonder if we might have been better off now if it did.

  • Daphna

    Even if it would help cabbies to give them an exemption to congestion pricing, this should definitely not been done. If cabbies get an exemption, then all Uber/Lyft/Via/etc drivers should also get the exemption. The first iteration of congestion pricing did not have an added fee for cabbies or ride hail app drivers. This would bring in less revenue but has certain merits, as well as cons.

  • JarekFA

    I thought Charles had a much more sophisticated approach for tolling taxis/FHV that was based on the amount of time idling/driving in the CBD. So instead of a flat fee, it’d be .$0X per minute or something like that?

    A flat fee or a one time per day fee doesn’t seem to be particularly well targeted. But of course FHV’s need to be tolled for this. They’re the single biggest contributor to our congestion crisis even if they have a useful purpose.

  • John Smith

    The number of yellow cab Medallions (13,000) is based on congestion studies. They have actually lost 2,000 Medallion cabs to foreclosure in the same time period Uber et al added 170,000+ cars. That’s 11,000 yellows vs 170,000 Ubers. It’s madness and extremely cruel to even consider charging yellow cabs a ‘congestion fee.’ And btw, they cannot avoid the CBD and make a living. It’s literally not possible.

  • John Smith

    Putting aside the price of Medallions, they were sold as the exclusive right to street hails. It’s insane to tell Medallions owners or fleet drivers they have to avoid the area where all the business is. I can tell you from experience it is not possible to make a living driving a yellow cab outside the CBD. You won’t even cover your expenses.

  • Liam Hanley

    I think we have listened to so-called experts for long enough. They have completely mismanaged the Uber situation in NYC and other cities. I think it’s time to listen to the people who actually do the work, the immigrant mainly English as a second language drivers who are being starved. Eliminate the surcharge and give them a fare raise.

  • Larry Littlefield

    Everyone deserves to put in less and take out more, if you ask them.

    These surcharges are in part to pay for 30 years of that in New York. Perhaps you might say that immigrants who are not allowed to vote are less to blame for it than younger people who moved here in the past 20 years and either did not vote, or voted based on tribalism (pro-Democrat here, pro-Republican elsewhere) without looking at the fine print of what was being done to their future.

    The situation is Chapter 11, as a class, with the city organizing it.

  • Daphna

    It is unfair already that the ride hail app rides cost an extra $2.75 when below 96th Street and that taxis rides cost $2.50 extra in the same area. There should not be that $.25 difference. The fees should be the same for taxi and ride hail drivers. In my opinion, this fee should be lower such as $1 per ride for all. But it would not be right to exempt yellow taxi rides but not ride hail app rides.

  • Daphna

    Uber/Lyft drivers are immigrants too. Many Uber/Lyft drivers are former yellow taxi cab drivers who could make a better living driving their own vehicle for an app instead of renting a yellow taxi from the medallion owner $200 plus per shift plus paying half of their fare revenue to the owner. Now there is a smaller pool of drivers wanting to rent yellow taxis from that medallion owners because they can get their own green outer-boro taxi or drive for an app instead.

  • Daphna

    Originally there was no fee for trips that started and ended within the CBD and did not cross a toll. Then there was a version of congestion pricing that factored in an appropriate fee for such trips: 30% (or 33% ?) of the cost of the ride, not a flat fee, and was planned to be imposed when the cordon tolls began.

    But Cuomo did not use that plan. Cuomo ignored those well researched plans by experts with fees rationally and fairly constructed. Instead Cuomo dreamed up his own congestion pricing plan and that is how it became a flat fee $2.50/trip/taxi, $2.75/trip/ride-hail-app that was imposed years in advance of the cordon tolls.

  • Larry Littlefield

    Right. The focus is on the individual yellow cab owners, but the propaganda is being put out by the medallion monopolists.

    As for the individual owners who paid $1 million for a medallion worth $150,000, see below.

  • Larry Littlefield

    Here is the issue with Warren’s plan, and similar plans.

    Lots of people who ran up that debt were frankly irresponsible, as were some of the institutions of higher learning that jacked up prices based on the availability of irresponsible loans. You provide blanket wipe out, the cost is shifted to those who were responsible, and attended a state school (or none at all) because they couldn’t afford it.

    On the other hand, the mortgage bailout attempted to separate the responsible from the irresponsible, and that turned out to be so complicated that in the end very few were helped.

    Meanwhile, with TARP in 2008 every big bank got huge money — even those that did not want it — to make sure the most irresponsible didn’t get that scarlet letter. And by avoiding the bankruptcy process, everybody at the top got their bonuses too.

    The equivalent is to have a bailout in which the big medallion monopolist benefit more than the clueless immigrants, in exchange for campaign contributions. With a deal at 3 am, and a claim the whole thing “cost’s nothing.” That would be the NY Democratic Party thing to do.

    That’s the situation responsible serfs are in. Screwed or screw more, this way or that way. Whether bailout or bankruptcy is chose, I want a “Truth and Reconcilliation Commission!”

  • Andrew

    It is unfair already that the ride hail app rides cost an extra $2.75 when below 96th Street and that taxis rides cost $2.50 extra in the same area.

    Allow me to take that a step further.

    It is unfair already that congestion pricing applies to taxi and TNC rides today, while people driving their own cars into the same congested area are exempt from congestion pricing until 2020.

  • Joe R.

    One thing to keep in mind regarding student loans versus other types of debt are the predatory collection agencies, plus the way your payments are applied. When you make a payment, first it’s applied to outstanding interest, then to collection fees, and finally to principal. Loans which default often have substantial amounts of interest and collection fees. Each time the loan goes into default, another collection fee of 25% to 40% is often added, and the entire amount (i.e. previous interest, principal, and collection fees) is capitalized, meaning interest accumulates on the entire amount, not just on the amount originally borrowed. As a result of all this, there are people who already made more than sufficient payments to have paid off their loans in full if the payments were applied the same as to other types of debt (i.e. a portion of every payment goes to principal, and the rest to interest, with no collection fees of any type), and yet these people might still owe several multiples of what they originally borrowed.

    Maybe instead of outright forgiving every single loan we should first recalculate the balance owed like I said, based on payments already made. In many cases not only would the loan have been long paid off, but the borrower may be due a refund of excess payments. Who should pay for all this? For a start, all the student loan collection agencies who charged these exorbitant fees in the first place. Going forward, when students start repaying their loans a portion of every payment, starting with the first payment, should be applied to principal, regardless of how much interest has accrued. By paying off part of the principal with every payment, the interest on the remaining balance will accumulate more slowly as interest is calculated only on the remaining principal. And of course there should not be collection fees. People often default on student loans not by choice, but because they lose a job, or can’t find one in the first place. Hitting them with collection fees just compounds the problem. Unfortunately, it seems to me the current system isn’t designed to help people pay off their loans. Rather, it’s designed to use collection fees to ensure the person is giving these collection agencies an income stream for the rest of their lives. No other type of debt has such an onerous collection system.

  • Larry Littlefield

    My take on student loans is here. Prior generations abused the system, so now the system is abusing this generation of borrowers.

    https://larrylittlefield.wordpress.com/2014/01/08/generation-greed-and-student-loans/

    One thing the student loans and taxi loans have in common is government involvement. Lots of those taxi loans were backed by the Small Business Administration.

  • Joe R.

    I graduated in 1985 and didn’t even have the option of a no interest deferment. In fact, I didn’t even get the 9 month grace period before my payments started like my promissory note said I should. I did get a hardship deferment but eventually the loans went into default. I eventually made a deal to pay $50 a month, which was all I could afford. That barely covered the interest, so for the next 20 or so years, my balance neither went up nor down. Then for some reason the loans were assigned back to NYSHESC for collection. They immediately added collection fees to the balance (on top of the 25% collection fees which had already been added), and applied a portion of every payment to my collection fees. They also increased my monthly payments to $105, then to $200, without my consent. Of course, I couldn’t afford that at the time. I might miss a payment or two, then when I got work I doubled or tripled up on the payments. Unfortunately, when I missed 3 consecutive payments the loan went into default again in 2012. The part I really found galling was after several years of increased payments, I actually owed them more than before.

    After this I started reading up a lot. Of course, the collection fees NYSHESC had added were illegal per my promissory note, which specified a maximum of 25% in collection fees, which had already been added to the balance a long time ago. I haven’t made any payments since 2012 because based on all the violations by the people collecting the loan it should invalidate the entire agreement, and hence any obligation I have. Also, the amounts I’ve paid thus far would be more than sufficient to retire the loan if part of my payments from day 1 were applied to principal, and no collection fees were added.

    Anyway, had I known I would have gone through all this if I couldn’t make payments I never would have taken out loans. Now I recommend against it. If students have to borrow to get through school, let their parents take a home equity loan or get a bank loan or any other type of loan. At least the terms are far less onerous. And yes, I do vividly remember some of my teachers espousing exactly what you said. They were telling students to take loans and not worry about them. If they couldn’t pay them back after graduating they usually stop bothering you after a few years. Well, maybe that worked for them, but as you said the system changed on account of this type of abuse.

  • John Smith

    There are 2,000 fewer yellow cabs on the road now than when Uber et al were let in. There are currently 170,000+ Ubers vs 11,000 yellow cabs. Yellow cabs should not pay a dime, they added no congestion whatsoever and pay a lot of money for street hail rights. The limited Medallion numbers are literally based on congestion studies. Yellows already had .80 on the meter, it’s actually now $3.30 on taxis and $2.57 on Uber.

  • John Smith

    Of course it will help cabbies. There’s no way to justify charging yellow cabs a fee for doing their job. They CANNOT stay out of the CBD, it’s SICK to suggest they should. They cannot make a living without waiting on taxi lines and cruising the CBD, period. Uber et all added nearly TWENTY TIMES the number of cars to NYC. That would have continued forever if the city council hadn’t finally stepped in after EIGHT SUICIDES. London exempted black cabs from the fee.

  • ohmymy

    But cabs don’t pay congestion surcharge in London. Aren’t they our shining example?

  • ohmymy

    It’s all about driver income. By imposing this additional tax on riders, fewer will take cabs. The irony is that the added tax does nothing to reduce congestion but rather results in more empty cruising cabs.

  • Larry Littlefield

    Man, you were screwed. And a few years earlier — literally a few years — people were just walking away.

    The back end of the Baby Boom and Gen X really got the short end, but most ended up OK in the short run, so they didn’t do anything, and the millennials ended up even worse off.

    Wait to people in our generation hit retirement (age). That early death rate is going to soar.

  • Joe R.

    One thing which I see hitting our generation really heard is when they start deducting student loan debt from Social Security benefits. Sad to say, unless something is done, it looks like quite a few in our generation, and those that follow, are going to hit retirement age with student loan debt. That will directly impact health if it means eating cheaper but less healthy foods, or going to the doctor less often, or not buying medications you may need.

    And yeah, I was screwed. That’s why I’m fighting this. I have a list of about 7 or 8 things they did which were illegal, with the documentation to back it up. When NYSHESC was handling my payments, they couldn’t even get the amounts right but I have all my canceled checks as proof of payment. They claimed I paid about $2,000 less than I actually did. If nothing else, I want to see major reforms which put all these shady collection companies like NYSHESC out of business.

  • Larry Littlefield

    Older people trying to help their screwed kids also borrowed student loans, and they may end up in the same boat.

    Basically, average pay fell by lifestyles didn’t — they expanded. Parent college saving disappeared — despite the addition of stuff like the 529 plan to induce it. That and divorce cut back cash college assistance from most parents. Teenage work also disappeared — plenty of adults available to do it, at a falling minimum wages.

    These are unspoken factors in the student loan crisis.

  • John Smith

    There’s no way they could apply this cruel and nonsensical additional tax on the riders.The drivers will have to pay it. Say it’s a once-a-day $15 punch in the gut for being in Manhattan below 61st, Yellow drivers can’t merely charge the first passenger below 61st $15, and you have no way of knowing how many trips per day you’ll do at the start of the day, so it can’t be divided up.

  • John Smith

    Exactly.

  • kevd

    “They were sold as the exclusive right to street hails”
    They still are (below 96th street in Manhattan)

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