My Outer-borough taxi solution

I wrote this as an op-ed about a month back. But it went unpublished:

In recent months, Mayor Bloomberg has proposed allowing livery cabs to accept street hails in New York City’s outer boroughs—an idea that has been broached an rejected several times over the decades. Just this week, the City Council passed a plan to increase the fines on cab drivers who refuse outer borough fares.

Both plans are designed, it is said, to improve taxi service outside of Manhattan. But both ignore the realities of the taxi industry. Any real solution must acknowledge how the taxi business works in New York: It’s a three-tier system, and yellow cabs are just one part.

The city’s 13,000 yellow taxis tend to go where the money is: Manhattan south of 96th Street and the airports. This is old hat.

Complaints about refusals are likewise commonplace. Even as someone who has defended taxi drivers accused of refusing service, I concede that it’s a real problem, though one that tends to be wildly overstated.

But the key fact is that in addition to yellow cabs there are livery cabs and black cabs. Black cabs are taxis that service employees of (mostly large) businesses through expense accounts. Livery cabs mostly service the outer boroughs. They are required to accept passengers by pre-arrangement only and may not accept street hails—though in fact many do. Given the existence of liveries—which outnumber yellow cabs—the idea that the outer boroughs have no taxi service is simply false.

The reason yellow cab drivers can be reluctant to take fares to Brooklyn or the Bronx is two-fold. Cabbies have concerns for their safety. Some of these concerns are imaginary, but some are very real: Taxi drivers are more likely to be killed on the job than police or firefighters. The second concern is economic: When a taxi does travel to an outer borough, it is likely to have to return to Manhattan empty.

Neither concern permits a cab driver to refuse, of course. But while beating up on taxi drivers may be good politics and favorite sport, it does not really address the problem.

Taxi drivers—mostly immigrants, all independent contractors—have never had much voice in corridors of power. But taxi fleet owners do. They will yell loud and long against any plan to allow livery cabs on their turf.

And the taxi owners have a point. The mayor’s plan to let liveries accept street hails would permit the dilution of their monopoly—a monopoly not granted for free, but bought and paid for. It is represented by taxi medallions, which are licenses that sell for as much as $750,000. People buy them based on what they represent: An exclusive on street hails in New York City. The medallions are leased in turn to taxi drivers for as much as $129 per shift.

While the creation of a property right to taxi licenses might not be a perfect system, it has become entrenched over decades. Owners will right fight to protect those rights. Drivers, meanwhile, will protest their loss of business—and ultimately will not be willing to pay as much to lease medallions. Over time, drivers will become less willing to leave Manhattan than ever. In short, by letting liveries take their turf, the city would have changed the deal.

There is, however, a better way: The city should give everyone who owns a medallion another license (or two or three) for free. The second license would apply to a new class of taxi that would be permitted to accept street hails outside Manhattan. This would open up yellow-cab type service in neighborhood where it exists barely or not at all. Perhaps these cabs could be painted a distinctive color of their own, say, lime green.

Permitting green cabs would, of course, dilute the value of the yellow taxi medallions. But since the owners of yellow medallions would be given the green medallions, they would be compensated for their loss. Simply letting current liveries accept street hails, by contrast, would injure the yellow cab owners without compensation.

By attaching a green license to every yellow license, the city could add thousands of cabs if that’s what it wants. And it would do so without causing a loss to those who have borrowed and saved to purchase medallions. The yellow cab industry would be much more likely to accept a plan that protects their rights. And New Yorkers far and wide would have more and better taxi service than they have now.
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