Written by Bruce Schaller
Published by the New York City Taxi and Limousine Commission
February 1993.
The author of the For-Hire Vehicle Fact Book, Bruce Schaller, is now Principal of Schaller Consulting, which addresses the need of city officials and the travel and hospitality industry to improve taxi and for-hire services. You can learn more about Schaller Consulting, our Taxicab Regulation and Policy consulting area and how we could help your city improve its taxicab and for-hire services.
The full text of the FHV FACT BOOK follows below as published in 1993, with the addition of hypertext links. Some charts from the original publication have been omitted from this on-line version but this material is summarized in the text.
See also recent information at Taxi and Livery Fact Books.
Note: Italicized references in brackets describe or refer to sources. See the Appendix for published sources. [Admin.] means that the information is derived from TLC administrative records, special projects and information from other agencies, and has not been published elsewhere.
When the receptionist in a Brooklyn doctor's office asks a patient if she would like "a cab" to go home, both know that they mean a vehicle that is neither yellow nor likely to spend much time traversing the streets of Manhattan. But the semantic distinction between a "car service" and a yellow medallion taxicab is of little interest to either patient or receptionist, for the patient will receive traditional telephone-arranged, door-to-door taxcab service. The patient, like hundreds of thousands of other New Yorkers, depends on the transportation services of a class of cars that municipal law inelegantly names "for-hire vehicles."
For-hire vehicles (FHVs) serve an array of customers, neighborhoods and needs that reflect the full diversity of New York. FHVs include neighborhood car services that take residents to a myriad of everyday destinations such as doctor and hospital appoint' ments, work, shopping and the airports. FHVs also include "black cars," a more expensive, premium service catering to Manhattan business clientele. Finally, FHVs include limousines, the most luxurious end of the market.
There are 30,000 licensed FHVs operating out of 600 base stations throughout the five boroughs of New York City. FHVs are limited by law to serving passengers by prior arrangement; by contrast, yellow medallion taxicabs serve street hail customers exclusively.
This NEW YORK CITY FOR-HIRE VEHICLE FACT BOOK provides a wide-ranging profile of this important industry. The FACT BOOK profiles the customers and operations of each major industry segment. It describes the industry's cars, types of insurance and accident levels. The FACT BOOK also features maps showing where neighborhood car services are most and least prevalent in the city, and highlights geographic variations in the car service industry. A timeline showing the development and evolution of the FHV industry over its 40 year history is also included.
Finally, the FACT BOOK highlights key issues facing the industry and regulators, such as competition from unlicensed "gypsy cabs," the cost and availability of automobile liability insurance, the goals and methods of City regulation and the effectiveness of various enforcement tools.
GLOSSARY
THE PATRONS AND PROVIDERS OF FHV SERVICE
Role of for-hire vehicles in transportation system; size of the industry; base dispatching, base size, car ownership and industry operations; comparison of car services, black cars and limousines; profile of customers, trip purposes, fares, how fare is paid; what are "gypsy cabs"
CAR AGE, ACCIDENTS AND INSURANCE
Makes, model years and age of neighborhood car service cars, black cars and limousines; FHV accidents; insurance issues; levels of insurance coverage and premiums
Neighborhood variations in the size and character of the car service industry; characteristics of areas with many cars, few cars, average number of cars; comparison of number of FHVs and taxis in New York and other cities
Legal framework for regulating FHVs; TLC's approach to regulation; major TLC rules; licensing trends; enforcement, seizure and padlocking
DEVELOPMENT OF THE FHV INDUSTRY
History from the 1937 Haas Act to Mayor Dinkins's 1992 proposals; growth of the FHV industry; advent of the black car segment
Appendix A: Car service and area characteristics
Appendix B: References
TABLES
FHV base size, by industry segment
Number of FHVs affiliated with bases of different sizes,
by industry segment
Profile of for-hire vehicle services
Characteristics of the for-hire vehicle industry, 1992
Number of taxicabs, relative to population, in selected
cities
MAPS
1. Car service bases by Community Board, 1992
2. Car service vehicles by Community Board, 1992
3. Neighborhoods with many car service cars
4. Neighborhoods with relatively few car service cars
5. Neighborhoods with an average number of car service cars
BASE: A business that dispatches for-hire vehicles, generally via two-way radio.
BLACK CAR: A segment of the for-hire vehicle industry; primarily serves busi-ness clientele with luxury cars.
COMMUNITY BOARD: New York City is divided into 59 Community Board districts. The districts are generally drawn along neighborhood lines and are coterminous with districts used by City agencies for the delivery of services.
FOR-HIRE VEHICLE (FHV): Defined in City law as a vehicle seating fewer than nine passengers (in addition to the driver) and providing service after prior arrangement. Under local law, FHVs are prohibited from picking up street hails.
NEIGHBORHOOD CAR SERVICE: A segment of the for-hire vehicle industry; primarily serves local area residents.
TAXICAB: Defined in City law as a vehicle seating fewer than nine passengers (in addition to the driver) and permitted to pick up street hails. TLC regulation prohibits taxicabs from pre-arranging service through two-way radios. Number of taxicabs is limited by law to 11,787. All taxis are painted yellow. Often referred to as "medallion cabs."
TAXI AND LIMOUSINE COMMISSION (TLC): City agency that regulates the for-hire vehicle and taxicab industries. TLC rules are adopted by a nine-member Commission, eight of whom are part-time and unsalaried. A full-time, salaried Chairman both heads the Commission and is responsible for administering the agency.
The "for-hire vehicle" (FHV) industry is as sprawling and diverse as the city it serves. FHVs, generally sedans or station wagons providing door-to-door service after prior arrangement, serve all social and economic classes in neighborhoods and business districts throughout the five boroughs. They take patrons to doctors, hospitals, stores, places of employment and entertainment, business appointments, the airports, and such special events such as weddings and proms.
For-hire vehicle service is a vital part of the transportation network in New York City. The industry serves a city where only half the households have a car of their own, and where yellow taxi service can be found readily only in Manhattan and at the airports. FHV service complements the City's bus and subway system, servicing trips where the use of public transit is impractical due to the need for convenience, speed, protection from inclement weather, transportation of packages or luggage, or where transit is too distant.
The FHV industry is characterized by the same diversity as other providers of consumer goods or services. Like grocery stores that range from the corner bodega to block-size supermarkets, some FHV bases operate a handful of cars while others dispatch several hundred cars. Like clothing stores that range in specialty from manufacturers' closeout clearances to the latest designer fashions, some for-hire vehicles are late-model luxury sedans or stretch limousines while others are 12-year-old cars that show their age. Likewise, patrons can pay a few dollars for a short trip or several hundred dollars for a day's limousine service.
Overall, the FHV industry is quite large, with 30,000 licensed cars dispatched from about 600 base stations. (Note that the numbers of cars refers to the number licensed in a recent 12-month period; not all are necessarily operating during any day or week.) Although other measures of size are difficult to estimate, the following data give a sense of the amount. of service provided and revenues received:
For-hire vehicles are operated from "base stations." Customers call a base to arrange service; the base sends a nearby car to the customer's home, office, etc. Most bases have two-way radio contact with their vehicle fleets. The base can advise the customer of the fare to be paid and how soon a car will arrive. Bases are responsible for resolving any service complaints.
There are three main segments in the industry, differentiated by the cost of service, the types of vehicles used, trip purposes and how fares are calculated and collected. (Note that a number of FHV bases, while primarily offering one category of service, also provide service in other categories. For example, a car service base may dispatch a few limousines as well. The three segments discussed here are distinct from unlicensed "gypsy cabs", see below.)
Neighborhood car services provide mostly local trips to area residents and visitors, though the airports and longer trips are also served. The fares are relatively cheap and usually paid in cash. The cars range from aging, inexpensive cars to newer cars similar to black cars, but most are older. This is both the largest and most diverse of the three industry segments.
Black cars primarily serve Manhattan businesses, providing a premium service at premium rates. Cars are not all black in color, but are luxury cars, such as Lincolns and Cadillacs. Passengers pay by voucher and clients are billed periodically. Most trips begin in Manhattan or at an airport.
Limousine and other premium services are the "high end" of the industry. They use late-model luxury sedans and stretch limousines, serve both business customers and individuals, and charge the highest fares.
Table below profiles the customers, trips, fares, vehicle characteristics, number of cars and bases in each industry segment and gives trip and revenue estimates.
The distinctions between the three industry segments have blurred somewhat, particularly during the current recession. For example:
| Car services | Black cars | Limousine/premium services | |
| 1-19 cars | 49% | 0% | 56% |
| 20-49 | 27% | 13% | 33% |
| 50-99 | 16% | 16% | 6% |
| 100+ | 9% | 71% | 5% |
Total |
100% | 100% | 100% |
Bases by # of vehicles affiliated with each, by industry segment. Data are for bases and vehicles licensed from May 1991 to April 1992.
| Car services | Black cars | Limousine/premium services | |
| 1-19 cars | 13% | 0% | 25% |
| 20-49 | 21% | 3% | 35% |
| 50-99 | 28% | 7% | 16% |
| 100+ | 39% | 90% | 23% |
| 100% | 100% | 100% |
Number of vehicles affiliated with bases of each size, by industry segment. Data for bases and vehicles licensed May 1991 to April 1992.
| CAR SERVICE | BLACK CAR | LIMOUSINE | |
| CUSTOMERS | Primarily residents of area served | Primarily business clients | Mix of business and personal trips |
| TRIP PURPOSES | To and from work, medical appointments, shopping, eating out, visiting friends, other social activities | To and from work, especially from work to home in the evening; business appointments; airport trips. | Traditional limousine work: weddings, proms, theatre, etc. as well as business trips similar to black cars. Vehicle stays with customer throughout the engagement, waiting until return trip to home/office. |
| HOW FARES ARE COMPUTED | Geographic zones | Geographic zones | Hourly, generally with one or two-hour minimum. Charge is incurred from time limousine leaves garage to time it returns. Per-mile charges are used for longer, out-of-town trips. |
| TYPICAL FARES | Local trips: $3-10 Airport trips: $15-45 |
Overall average fare about $30-35 Intra-Manhattan trips: $11-20 Between Manhattan and airports: $24-55. |
$30-55 per hour for stretch limousines; less for sedans. |
| MINIMUM FARES | $2-5 | $11-13 | Minimum charge of one or 2 hours. |
| HOW FARE IS PAID | Cash, Medicaid voucher, some credit cards, some business vouchers | Business vouchers; some credit cards. | Business vouchers, credit cards, charge accounts. |
| CARS IN USE | Chevrolet Caprice, Oldsmobile. Some Buick Skylark, Cadillac and Ford LTD. Cars are usually bought used. | Lincoln Town Car, Mercury Grand Marquis, Cadillac. Cars are bought used or new. | Lincoln, Cadillac. Cars are bought new. Both sedans and stretch limousines. |
| CAR AGE | Most are 3 to 12 years old; average age is 8 model years. | 2 to 6 years old; average age is 4 model years. | Traditionally, late-model. Average age is 2 model years. |
| OTHER COMMENTS/RECENT DEVELOPMENTS | Some bases also operate a few limousines. Car services have increased voucher and credit card work; taking on some black car business. | Most black car bases are organized as franchises; some bases are also
owned cooperatively by drivers.
Cars are becoming older; business is badly hurt by [early-1990s] recession. Many bases have shrunk, merged or folded. |
Limousine bases are using more luxury sedans and fewer stretch limousines. Some bases provide service charged by the trip as well as by the hour. Limo segment is becoming less distinct from black car services. |
Operating Characteristics of the For-Hire Vehicle
Industry, 1992.
(Information Is based on [Taxicab EIS, 1989] and interviews with FHV
base owners.)
| CAR SERVICE | BLACK CAR | LIMOUSINE | |
| LICENSED BASES AND VEHICLES (1) | 477 bases; 19,559 vehicles | 45 bases; 7,968 vehicles | 63 bases 1,591 vehicles.(2) Includes bases operating a "premium" service that combines limousine and black car-type services. |
| BOROUGH: (3) The Bronx Brooklyn Manhattan Queens Staten Island |
Veh Bases
|
Veh Bases 489 2 2,467 13 1,144 11 3,868 19 0 0
|
Veh Bases 32 2 134 5 611 25 682 23 40 4
|
| TRIPS SERVED (4) | 150,000-275,000 trips/day | 20,000 to 30,000 trips/day | n/a |
| GROSS REVENUE | $250-600 million/year | $200-275 million/year | n/a |
| PCT. OF NYC TRAVEL (5) | 4.3-7.7% | 0.5-0.7% | n/a |
| WHO OWNS THE CARS | 75% of cars are owned by drivers; rest owned by bases. | Almost exclusively by drivers | About half by drivers, half by bases |
| FINANCIAL ARRANGEMENT BETWEEN BASE AND DRIVER | Where base owns the car: commission basis (driver keeps a percentage of fares) or lease (driver pays flat rate for the shift). Where owner-driver: commission basis or weekly/monthly fee to receive radio- dispatched calls. | Generally commission basis (driver keeps a percentage of fares) | Commission basis or salary |
| VOLUME OF TRIPS (6) | 7-25 trips/car per shift | 6-12 trips/car per shift | n/a |
| ESTIMATED DRIVER EARNINGS | $40-100/shift | $75-125/shift | n/a |
| AVERAGE BASE SIZE | 41 cars | 177 cars | 31 cars for strictly limousine bases; 25 when "premium" bases that combine limousine and black car-type services are included. |
(1) Number of TLC licenses Issued from May 1, 1991 to April 30, 1992. Excludes bases with no cars or known to be out of business as of April, 1992.
(2) Well under half of these vehicles are stretch limousines. Most are sedans operating on a limousine basis, e.g., hourly charges and the vehicle remains with the customer throughout the customers' excursion.
(3) Data reflect the number of bases, and vehicles affiliated with them, in each borough. FHVs affiliated with out-of-town bases are not included in borough data.
(4) Trips per year, gross revenue and percent of NYC travel are estimated using a range of assumptions for how many trips each car provides each day, number of days in operation, and average fares. Data are provided to given an overall sense of the size of each industry segment.
(5) Percent of all bus, subway, taxi and for-hire vehicle trips.
(6) N.B.: Volume of trips and estimated driver earnings vary widely by driver, base, season and other factors. Figures shown cover the most commonly-experienced values.
The industry segments profiled above are licensed, legal, legitimate FHVs. Though years ago the term "gypsy cab" was used to refer to legitimate car services, the term now refers to unlicensed operators. Unlicensed cars are not formally part of the for-hire vehicle industry, but they compete with FHVs, particularly car services, and divert potential business from them. A description of unlicensed FHVs is thus important to a profile of the FHV industry:
One of the primary goals of FHV regulation is to assure that each vehicle is properly insured. Liability insurance is critical for the safety of FHV passengers, pedestrians and occupants of other cars, as well as FHV drivers. Lack of insurance has been a major and difficult issue to resolve because c)f the risks inheretit with for-hire operations, the cost of insurance and the specialized nature of FHV insurance.
Insurance issues begin with availability and proceed to cost. Most FHVs cannot find an insurance company that will voluntarily issue them an insurance policy. They are therefore forced into the "assigned risk" plan, formally called the New York Automobile Insurance Plan. Under the Auto Plan,,insurance carriers in the state are randomly assigned cars whose owners are unable to obtain insurance in the voluntary market. Premiums are set uniformly for all cars in a.given Auto Plan classification.
As TLC began regulating for-hire vehicles in 1987, the insurance system was working poorly for FHVs. For-hire insurance (both taxi and FHV) is a specialty business, different from most car insurance just as insuring a day care center is different from insuring a family's private home. FHVs operate as businesses, the cars are constantly on the road, and the incidence of accidents is much higher than for personal cars. An insurance carrier must be familiar with the specific circumstances of for-hire operation in New York City to rate and service this risk properly. Yet insurance policies for most FHVs were assigned to companies that were located outside New York City and had few for-hire policies because the carrier insured no FHVs voluntarily. These companies were ill-equipped to handle the needs of the FHV industry.
Figure 5. Persons injured in accidents involving for-hire vehicles,, 1991. (Accidents involving licensed FH.Vs or other vehicles with T&LC plates and reported to State Motor Vehicles Department. Source: DMV.)
These problems were further compounded by abuses of the insurance system, marked by deliberate falsification of insurance applications to obtain a lower premium.
The result of this situation in the mid-1980s was high premiums for FHVs in the assigned risk plan, much fraud, and a system that rewarded schemes to lower an operator's premiums rather than safer operations. One scheme used to obtain a lower rate involved car owners claiming that only the car owner or certain named drivers with good driving records were driving a car, whereas in fact there were other drivers. If this tactic failed, some car owners would repeatedly submit insurance applications until they were assigned to a company that accepted their representations at face value. Another (and continuing) problem was that vehicle owners failed to make premium payments, which results in insurance cancellation (and also revocation of the vehicle license).
After extensive consultation with TLC, the FHV industry and insurance companies and brokers, including the administrators of the assigned risk plan, the State Insurance Department designed a series of changes to for-hire assigned risk policies. The changes, which took eff ect in 1988 and 1989, included a simplification of the system of classifying risks, a premium payment plan that allows payment of annual premiums in 7 installments, a more realistic system of surcharges and discounts, and assignment of policies to companies familiar with for-hire operations.
These reforms were successful in holding down rate increases. The large majority of FHVs are owner-drivers who elect to take the minimum coverage required by State law. For this group, premiums were almost exactly the same in 1992 as in 1988. (By comparison, premiums for yellow taxicab owner-drivers insured voluntarily rose by 20% between 1988 and 1992.)
(This section is based on information from for-hire insurance carriers that together issue the large majority of for-hire insurance policies, and from TLC licensing data.)
Owners of three or more cars in the "all other" category are given sizable debits and credits depending on the accident histories of their cars.
Neighborhood car services are the largest segment of the FHV industry, with about 20,000 vehicles. This chapter describes this variegated segment in more detail, using six statistical measures: the number of neighborhood car services bases; the number of cars affiliated with bases; the number of cars adjusted for neighborhood population; car age; base size and whether cars are owned primarily by bases or drivers.
These data show a tremendous range in the size and character of the industry in different parts of the city. The data also sketch the relationship between industry size and neighborhood characteristics such as population density and car ownership.
This statistical picture illuminates a variety of issues: the quantity and quality of service provided New Yorkers, the industry's impact on traffic congestion, neighborhood quality of life issues, TLC enforcement needs, and ultimately, how best to regulate and promote safe, reliable and good quality FHV service.
The number of car service bases varies from zero in two community boards
to a high of 22 bases. Most districts have between 4 and 15 bases.
(Number of car service bases in each Community Board district.)
Interpreting the maps in this chapter
The map above and those that follow show the tremendous geographical variation in the size of the car service industry and the age of car service vehicles In New York City. Using the number of licensed car service bases and affiliated vehicles in each Community Board district, the maps depict basic measures of industry size. These measures correlate with industry and neighborhood characteristics, as discussed in the text.
Several cautions in interpreting the maps should be noted. The number of vehicles does not translate directly into the number of trips provided to residents in the area, or other indicators of the exact size of the industry, for several reasons: (1) Many vehicles provide service outside the Community Board district in which their base is located. Although the overlap of vehicles from neighboring districts cancels out in some cases, it does not for all districts. (2) The number of trips provided by each car varies widely within the industry. (3). Vehicle owners may have changed their base affiliation without notifying TLC and now operate elsewhere in the city. (4) Some vehicles left the industry before their licenses expired.
The licensing data used for the maps do not include unlicensed cars and thus understate the total amount of for-hire activity in many areas. But TLC enforcement experience is that unlicensed activity tends to concentrate in those areas with many licensed cars, rendering little change in the picture presented here.
Finally, as counts of existing bases and cars, :the maps do not show the level of customers' demand for service nor whether the amount of service is adequate, too great or insufficient.
The maps utilize Community Board district boundaries because these districts generally correspond with neighborhoods and because population data are available for each Board. Vehicle and base counts reflect licenses issued from May 1991 through April 1992. Bases licensed in this period, but known to have gone out of business by April 1992, are not included. Black car and limousine bases are not included: because their vehicles tend to operate citywide and/or outside the bases' area. Appendix A displays the data upon which the maps are based, and selected neighborhood information for each Board district.
The number of car service vehicles affiliated with bases in each Community
Board district varies from 24 cars to 2,400. Most districts have between
100 and 600 affiliated vehicles.
(Number of for-hire vehicles affiliated with car service bases in each Community Board district, for FHVs issued licenses from May 1991 to April 1992.)
How neighborhoods differ: Neighborhoods with many
car service cars
(Community Board districts with a large number of car service cars relative to population (generally more than 2.9 cars/1,000 residents). See text and Appendix A.)
(Community Board districts with comparatively few car service cars relative to population (generally less than 1.34 cars/1,000 residents). See text and Appendix A.)
Remaining areas of the city have an average number of cars per 1,000 residents: between 1.34 and 2.9. These districts are divided into two groups:
(Community Board districts with average number of car service cars relative to population (between 1.34 and 2.9 cars/1,000 residents). See text and Appendix A.)
(Source for other cities: ITLA, 1991.)
TAXICABS PER 1,000 POPN. New York City 4.3 a Atlanta 3.7 New Orleans 2.9 Boston 2.7 Dallas 2.0 Newark 1.8 Chicago 1.7 Baltimore 1.5 San Francisco 1.2 Houston 1.0 Philadelphia 0.9 Los Angeles 0.4
Within New York City:
Manh. business district
daytime popn. 8.2 b Upper Manhattan 6.O c Other 4 boroughs 2.6 d
a Both taxis and FHVs Included for NYC.
b Manhattan daytime popn. includes all persons working in Manhattan below 11Oth Street; vehicle count includes all taxicabs, all black cars, and those car services based in Community Board districts 1-8. This accounts for the large number of commuters using taxis and FHVs in Manhattan, and enhances comparability with other data in table.
c Reflects residents and car service cars based in Board districts 9-12.
d Reflects residents and car service cars based in Brooklyn, Bronx, Queens and Staten Island.
For-hire vehicles have been regulated by the New York City Taxi and Limousine commission since passage of Local Law 76 of 1987, which took effect in March 1987. The purpose of regulation is to protect the safety of the public, promote the improvement of for-hire service, and to establish standards for service, insurance and for the licensing of operators engaged in providing such services. [See New York City Charter, §2300] This chapter describes relevant laws and rules, TLC's approach to regulating the industry, the licensing of bases, vehicles and drivers, and the key task of enforcement.
The Administrative Code (the local laws) of New York City defines what is a for-hire vehicle, sets licensing and other requirements, and sets licensing fees. Main provisions of law are summarized below.
TLC regulations carry out the law and establish minimum criteria for safety and accountability.
Focus on licensing: TLC regulation has focused getting all bases, vehicles and drivers licensed and in compliance with minimum standards. The primary reasons for this approach are:
"Base accountability" is another tenet of TLC regulation. TLC requires that each vehicle be affiliated with a base, and seeks to hold bases responsible for their affiliated vehicles. This approach is intended to support the management role of FHV base owners. This approach is also a matter of efficiency; 600 bases can be regulated more readily than 30,000 vehicles.
Advisory Board: One important channel of communication between TLC and the industry is the Livery Advisory Board. The L.A.B. is appointed by the TLC Chairman and is composed of base owners, many representing local or citywide industry associations. The L.A.B. meets with the Chairman and TLC staff regularly to discuss problems facing the industry and specific programs and rule changes. The L.A.B. provides the industry with an organized way to bring its concerns to the Commission, and for the Commission to communicate with the industry and maintain an ongoing dialogue.
Drivers must be licensed by TLC, and must have the appropriate New York State license. Drivers are also checked for any criminal background.
The central role of enforcement
The continuing problem of unlicensed operators makes TLC enforcement pivotal to achieving its regulatory objectives. The range of enforcement tools has been augmented to increase the effectiveness of TLC in addressing this difficult problem:
| 1937 | Haas Act approved by the City Board of Aldermen, capping the taxicab industry at the number of taxicabs then in service (at the time, 13,595, and, by the early 1950s, reduced through attrition to the present number of 11,787). Established the Police Department's Hack Bureau as the regulatory body. |
| 1950s | In response to the need for additional transportation service, neighborhood car services began to operate in New York City's lower-income neighbor-hoods. Car services primarily served local trips for shopping, doctor visits, recreation, business and employment. Though not regulated by the City government, these operations were legal provided they operated only by prearrangement. Many cars also picked up street hails, however, a service that local law reserved to medallion taxicabs. |
| 1960s | Neighborhood car services established themselves as the primary means of for-hire transportation in the City's outer boroughs and northern Man-hattan. Medallion cabs primarily served trips originating in the lower two-thirds of Manhattan and the two airports. [Lindsay Panel, 1966, Rogoff, 1980, page 7.] |
| 1966 | Mayor John V Lindsay's Taxi Study Panel issued a report finding that
because of a shortage of medallion taxis, approximately 4,000 private liveries
serviced passengers who telephoned central dispatchers, mainly servicing
boroughs other than Manhattan. [Lindsay Panel, 1966, p. 61 The panel recommended
that car services be regulated and licensed, be limited to providing prearranged
service, and be painted a uniform color other than yellow.
The panel also recommended that the Hack Bureau be replaced by a Taxi Commission to perform planning and broad policymaking functions, set taxi fares and integrate taxi service into the city's overall transportation policy. |
| March 1971 | Local Law 12 enacted, creating the Taxi and Limousine Commission and
establishing it as the regulatory body for both medallion taxis and "limousines."
Limousines are defined as 'a motor vehicle carrying pas-sengers for hire
in the city, designed to comfortably seat a maximum of eight passengers ...
and not permitted to accept hails from prospective passengers in the street.
" [Local Law 12 of 1971, now §2302(g) of NYC Administrative
Code]
Local Law 12 required that TLC investigate the increasing problem of "gypsy" cabs. The Council attributed the. proliferation of gypsies to the lack of "adequate taxicab service in certain areas of the city, particularly those containing heavy concentrations of Blacks and Puerto Ricans. At the same time we find that gypsy cabs frequently operate illegally by . . . picking up passengers on the street [and that] gypsy cabs do not meet the high standards of licensing which govern drivers of medallion cabs." [Local Law 12 of 197 1, now §2322 of the Administrative Code.] Local Law 12 was ambiguous as to whether it applied strictly to limousines, or also included neighborhood car services. Attempts to bring car services under local regulation were unsuccessful. Representatives of yellow taxi owners and drivers opposed regulatory proposals, feeling that formal recognition of car services would cut into taxicabs' business. Car service base owners initially agreed to submit to regulation in exchange for recognition that they hoped would lead to increased revenues. But the collapse of licensing efforts led base owners to announce in 1972 that they would no longer voluntarily submit to TLC's supervision. [Rogoff, 1980, pp. 7-8] TLC did regulate limousines that could seat eight passengers. Fares were not regulated but had to be filed with TLC and could be rejected. |
| 1981-82 | After unsuccessfully pursuing a variety of reforms to the taxi industry,
Mayor Koch created an independent committee to conduct a thorough review
of taxi and livery regulation. The committee, headed by Richard B. Smith,
a partner at a large Manhattan law firm, recommended a wide range of regulatory
changes. Their keystone was a proposal for "green stripe" nonmedallion cars.
Among the 73 recommendations were these:
|
| 1981-82 | Many of the Smith Committee's taxi-related recommendations were adopted, such as centralized inspection of taxicabs, installation of electronic taximeters and establishment of a taxi driver training institute. But the Green Stripe proposal foundered because of projected environmental impacts and because of opposition from the taxi industry, which feared the loss of street hail business in Manhattan to nonmedallion cars. |
| February 1982 | TLC allowed the 3,200 medallion taxi owners belonging to two-way radio dispatch associations to transfer their radios to nonmedallion vehicles. The nonmedallion cars would service radio calls, freeing medallion taxicabs to serve street hails exclusively. This action created the "black car" industry. (See box on black cars at the end of this chapter.) |
| Mid-1980s | City Council approved legislation to give TLC jurisdiction over nonmedal-lion
vehicles. Because of the way the bills were worded, however, courts limited
TLC jurisdiction to stretch limousines seating eight passengers. In Fiscal
Year 1985, 7,200 black cars registered with TLC, but enforcement was minimal
and the large majority of neighborhood car services remained unregulated.
City and State legislation was also adopted to simplify the procedures to adjudicate summonses issued to car owners for unlicensed activity, and to file money judgments against owners who fail to respond to TLC summonses. |
| 1987 | City Council approved Local Law 76, giving TLC jurisdiction over all
nonmedallion vehicles seating fewer than nine passengers. Law created the
term "for-hire vehicles", defined as "a motor vehicle carrying pas-sengers
for hire in the city, designed to seat fewer than nine passengers, other
than a taxicab, coach or wheelchair accessible van." [Administrative
Code, Section 19-502(g)] This definition clearly applied to neighborhood
car services as well as limousines. The law prohibited for-hire vehicles
(FHVs) from picking up street hails.
TLC adopted rules for vehicle owners, base owners and drivers. Each must be licensed and vehicles must be affiliated with a base and inspected three times a year. Fares were not regulated. Roof lights were prohibited. TLC began to license for-hire vehicles (FHVs) when the law took effect on March 15. Street inspectors distributed flyers informing drivers and base owners of the need to be licensed and began issuing summonses for unlicensed operation later that year. The focus on bringing unlicensed operators into the regulatory fold continues to this day. (See chapter on Regulation.) |
| November 1989 | City Council adopted legislation allowing TLC to seize unlicensed vehicles operating for-hire, and to padlock unlicensed bases. These powers enhanced enforcement effectiveness. |
| October 1992 | Mayor David N. Dinkins announced a proposal to expand the availability
of outerborough service and increase enforcement against unlicensed operators.
Under the proposal:
This proposal was never adopted. |
HOW LARGE IS THE INDUSTRYThe size of the legitimate car service industry has long been a subject of guesstimation, the imprecision outmatched only by estimates of the number of illegal "gypsy operators. Available estimates, however, do make clear that the industry grew from a few thousand neighborhood car service cars in the early 1960s to over 20,000 in the early 1980s. The number of neighborhood car services has since leveled off, while the black car Industry added to the overall ranks of what we now call "for-hire vehicles." Published estimates are shown below. 1966: 4,000 neighborhood car service vehicles working from base stations 1971: 9,300 neighborhood car service vehicles, plus 4,400'"gypsies " working from the street full-time and several thousand more part-time. 1983: 21,300 neighborhood car service cars dispatched from 735 bases; also 14, 000 "gypsies." 1992: 20,000 licensed neighborhood car service cars dispatched from 477 bases, 8,000 licensed "black cars" dispatched from 45 bases, and 1,600 vehicles working out of 6 7 bases offering limousine and other premium services. Sources: Lindsay, 1966, Lazar, 1971; Green Stripe DEIS, 1984. 1992 data from TLC licensing records. |
Formation of "Black Cars"Black cars are luxury vehicles, such as Lincoln Town Cars and Cadillacs, that primarily service business accounts in Manhattan. The black car industry (so named because many of the cars were originally painted black) was formed from medallion radio cabs in the early 1980s. Origination of radio cabs ...Starting in the mid-1960s, some taxi owners formed radio associations and began serving customers by telephone prearrangement as well as by traditional street hall. Most radio cabs were operated by taxi owner-drivers. Radio service was provided to passengers who simply telephoned in a service request and paid the meter fare in cash, and to businesses who had accounts with the radio group. Business-ac-count trips were concentrated in the evening, as businesses provided workers with free transportation home. [Hale Russell, 1979, pp. 7, 28 and 62] As of 1979, 25% of radio cabs' overall time was devoted to serving business accounts. and 12% to cash-paid radio calls. [Cambridge Systematics, 1979, p. 9] Radio work proved popular with. drivers because it provided a regular flow of business and, in the drivers view, prearranged trips posed less of a safety risk than street halls. The demand for prearranged service and particularly charge-account business grew as the city economy recovered from the deep local recession of the mid-1970s. The number of radio cabs grew steadily, reaching over 25% of the industry in 1982 (about 3,200 cabs in 13 radio associations). [Admn.; Smith Committee report, p. 24 of issues papers section] ... led to shortages of street hail cabs The growth in radio work created a problem for passengers trying to hail cabs from the curb. Since the number of taxis was capped, hailers grew increasingly frustrated at lines of cabs passing by with their roof lights indicating "on radio call." Converting to nonmedallion radio cars To address the shortage in street hail service, TLC at first allowed, and then mandated, that radios be moved from medallion to nonmedallion cars. The first radios were transferred in March 1982 in two companies, Intaboro and Dial. by April 1983, an estimated 900 radios had been switched out of the 3,200 that had been in taxis. [Commission minutes, April 13, 1983.] In converting to nonmedallion radio cars, a taxi owner-driver generally bought and drove the luxury black car. He or she either leased his medallion cab to other driver(s) or sold the taxicab license. Black cars initially charged metered fares, but eventually all black car companies switched to flat fares based on a zone system. Flat fares let corporate customers readily determine the correct fare between any two points. Initially, radio associations dispatched both medallion cabs and nonmedallion vehicles. In February 1985, TLC voted to require that all remaining two-way radios be removed from medallion taxis by March 1987. Since that time, medallion taxis have exclusively served street hail customers. To serve the booming business community in the 1980s, the original black car companies grew and additional companies were formed as offshoots of existing companies or from scratch. by the early 1990s, about 8,000 cars were licensed to 45 black car companies. [Admn.] |
CAR SERVICE INDUSTRY INFORMATION NEIGHBORHOOD INFO.
Affiliated cars Pct. cars % house
per Ave. owned Avg. holds
Community # 1,000 base by model 1990 Popn. with
Board Bases Total popn. size bases year popn. density no car
Citywide 477 19,559 2.6 40 24 83.0 7,322,091 40 56
DISTRICTS WITH MANY AFFILIATED CARS PER RESIDENT (MAP 3)
Bronx 03 3 243 4.2 81 12 82.5 58,345 58 84
Bronx 04 7 510 4.3 73 13 83.1 118,779 91 79
Bronx 05 6 1,086 9.2 181 6 81.8 118,435 136 80
Bronx 06 4 451 6.6 113 8 82.3 68,061 69 77
Bronx 07 8 662 5.1 83 9 82.2 128,588 107 69
Bronx 09 15 618 3.7 41 20 82.4 165,743 54 59
Bronx 12 13 796 6.1 61 6 82.3 129,620 36 44
Brooklyn 03 6 376 2.7 63 5 82.1 138,696 73 731
Brooklyn 05 13 610 3.8 47 18 81.9 161,350 45 60
Brooklyn 07 14 384 3.7 27 12 82.4 102,553 38 61
Brooklyn 08 8 303 3.1 38 8 82.3 96,896 92 72
Brooklyn 09 10 585 5.3 59 2 82.0 110,715 110 64
Brooklyn 17 12 531 3.3 44 13 81.9 161,261 75 53
Manhattan 09 4 416 3.9 104 7 82.3 106,978 111 82
Manhattan 11 8 323 2.9 40 5 82.6 110,508 78 84
Manhattan 12 16 2,314 11.7 145 10 82.0 198,192 105 77
Queens 01 22 1,027 5.4 47 36 84.0 188,549 51 55
Queens 02 15 622 6.5 41 14 83.0 94,845 29 54
Queens 03 14 537 4.2 38 14 82.9 128,924 71 48
Queens 04 15 846 6.2 56 23 83.5 137,023 90 51
DISTRICTS WITH RELATIVELY FEW AFFILIATED CARS PER RESIDENT (MAP 4)
Bronx 08 1 37 0.4 37 92 89.2 97,030 44 45
Bronx 10 3 59 0.6 20 80 86.3 97,863 24 36
Brooklyn 11 11 125 0.8 11 58 85.3 149,994 60 46
Brooklyn 12 21 190 1.2 9 28 84.6 160,018 69 53
Brooklyn 15 16 357 2.5 22 55 85.0 143,477 45 41
Manhattan 01 4 24 0.9 6 29 86.5 25,366 23 63
Manhattan 02 2 30 0.3 15 3 86.9 94,105 95 78
Manhattan 04 2 50 0.6 25 0 87.6 84,431 63 84
Manhattan 06 5 106 0.8 21 9 85.8 133,748 152 76
Manhattan 08 4 47 0.2 12 26 87.6 210,880 166 71
Manhattan 10 2 48 0.5 24 8 82.6 99,519 1ll 85
Queens 06 2 94 0.9 47 93 87.5 106,996 57 43
Queens 07 8 200 0.9 25 39 84.3 221,763 27 29
Queens 09 10 210 1.9 21 66 85.4 112,624 45 35
Queens 10 5 72 0.7 14 11 81.8 107,768 27 21
Queens 11 2 39 0.4 20 92 86.8 108,056 18 13
Queens 12 11 164 0.8 15 45 85.4 201,270 32 38
Queens 13 6 44 0.2 7 58 85.3 177,535 22 15
Queens 14 8 ill 1.1 14 17 82.5 100,596 17 44
SI 02 4 114 1.0 29 95 83.7 113,944 8 15
SI 03 3 30 0.2 10 90 84.4 126,956 9 10
DISTRICTS WITH AN AVERAGE NUMBER OF AFFILIATED CARS PER RESIDENT (MAP 5)
Bronx 01 4 124 1.6 31 34 81.6 77,214 44 84
Bronx 02 2 80 2.0 40 6 81.6 39,443 29 82
Bronx 11 7 225 2.3 32 85 84.5 98,299 43 45
Brooklyn 01 10 237 1.5 24 8 82.6 155,972 49 69
Brooklyn 02 6 126 1.3 21 4 83.7 94,534 49 67
Brooklyn 04 7 245 2.4 35 11 81.9 102,572 78 72
Brooklyn 06 13 147 1.4 11 37 82.8 102,228 46 59
Brooklyn 10 13 255 2.3 20 30 84.5 110,612 42 47
Brooklyn 13 9 198 1.9 22 29 83.7 102,596 47 60
Brooklyn 14 10 215 1.3 22 2 83.3 159,825 85 57
Brooklyn 18 12 432 2.6 36 31 82.7 162,428 27 29
Manhattan 03 10 447 2.8 45 23 83.6 161,617 144 84
Manhattan 07 6 473 2.2 79 4 82.9 210,993 156 76
Queens 05 4 198 1.3 50 48 83.2 149,126 31 38
Queens 08 6 205 1.6 34 30 83.8 130,396 28 27
SI 01 14 275 2.0 20 57 83.2 137,806 15 28
DISTRICTS WITH NO CAR SERVICE BASES
Manhattan 05 0 0 43,507 42 81
Brooklyn 16 0 0 84,923 69 73
Sources: Data on car service bases and vehicles are from TLC licensing files for cars
and bases licensed from May 1991 through April 1992. Bases that had apparently gone
out of business by the end of this period are not included.
Pct. of cars owned by bases is estimated, based on name of vehicle owner. Cars owned
under corporate names, and where an owner has two or more vehicles, are assumed to be
base-owned. Others are assumed to be driver-owned.
1990 population, population density (in persons per acre) and pct. of households with
no car of their own are from 1990 U.S. Census of Population. Data published by
NYC Department of City Planning.
Cambridge Systematics, 1979
Cambridge Systematics, Inc., Report to the New York City Taxi and Limousine Commission, An Economic Analysis of Two-Way Radio Operations, November 16,1979.
City Planning, 1992
NYC Department of City Planning, The Newest New Yorkers: An Analysis of Immigration into New York City During the 1980s, June 1992.
Grava, 1987
Sigurd Grava, Elliott Sclar and Charles Downs, The Potentials and Pitfalls of Private Sector Transportation Services: Activities in the New York Region, Division of Urban Planning, Columbia University, January 1987.
Green Stripe DEIS, 1984
Proposed Changes to New York City Taxi Regulations, Draft Environmental Impact Statement, prepared for the Taxi and Limousine Commission by Urbitran Associates, Inc., in association with AKRF, Inc. and The AM&M Group, July 1984.
Hale Russell, 1979
Hale Russell Gray Seaman & Birkett, Report of the Two-Way Radio Taxicab Groups to the New York City Taxi and Limousine Commission, 1979.
ITLA, 1991
International Taxicab and Livery Association, Taxicab Fact Book, 1991.
Lazar, 1971
Michael J. Lazar, The Non-Medallion Industry: A Transportation Phenomenon, Taxi and Limousine Commission, November 1971.
Lindsay Panel, 1966
Mayor's Taxi Study Panel, Regulation of the Taxi Industry, December 1966.
Lusk,1989
Jack Lusk and Tad Smith, "Keeping Tabs on Taxis," Portfolio: A Quarterly Review of Trade and Transportation (published by the Port Authority of New York and New Jersey), Winter 1989, pp. 45-53.
Rogoff, 1980
Edward G. Rogoff, "Regulation of the New York City Taxicab Industry," City Almanac, August 1980.
Savas,1991
E.S. Savas, Sigurd Grava and Roy Sparrow, The Private Sector in Public Transportation in New York City: A Policy Perspective, Institute for Transportation Systems, City University of New York, January 1991.
Smith, 1982
Mayor's Committee on Taxi Regulatory Issues, Richard B. Smith, Chairman, Recommendations, March 29, 1982.
Taxicab EIS, 1989
Additional Taxicab Licenses, Final Environmental Impact Statement, prepared for the Taxi and Limousine Commission by Parsons Brinckerhoff Quade & Douglas, Inc. in association with Charles River Associates Incorporated, June 1989.
TLC, 1993
Taxi and Limousine Commission, Taxicab Fact Book, February 1993.
Turoff, 1983
Jay L. Turoff (TLC Chairman), New York City Taxi Report, [Administration's response to Smith Committee recommendations] January 31, 1983.
Schaller Consulting
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