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By: Steven
Posted on: June 18, 2018

Back in July, 2017, almost one year ago, the NYC Taxi and Limousine Commission (“TLC”) embarked on a mission to have the For-Hire Vehicle (“FHV”) industry provide wheelchair accessible service to those who need transportation via a wheelchair accessible vehicle (“WAV”). The rule, (Section 59C-17(c)(1)), later dubbed the “25% Rule” would require all FHV bases to dispatch 25% of their trips to wheelchair accessible vehicles, beginning with 5% in the first year of implementation (July, 2018), scaling up to 25% over the course of five years. This rule was created by the TLC without having performed any studies on viability of its proposed and did not even know what the demand for WAV service was. The FHV industry operates on the simple principle of supply and demand. The demands of the marketplace help enable the FHV bases determine how much supply to attempt to provide to meet those demands.

While the goals of the TLC were noble, the means chose to achieve that goal would have led to obliteration of the FHV industry. All the leaders of the FHV industry knew that the TLC’s proposed 25% Rule would not only demolish the FHV industry, but it would not have achieved its goal of providing more WAV service to those who need it. The rule would have put an untold number of bases out of business due to the costs of purchasing WAVs and employing drivers, a business model that 99% of FHV bases had never operated. Additionally, making the entire FHV industry send 25% of its dispatches to WAV’s meant that a base could comply with the rule and never have ever sent a WAV to someone who requested or needed it.

As a result of the proposed 25% Rule, an unprecedented coalition of the leaders of the FHV industry came together. These leaders included Carmel Car and Limousine Service and representatives from the Black Car Assistance Corp, the Livery Round Table, Uber, Lyft, Via, Livery Base Owners and Limo Association of New York (the “Coalition”). The Coalition put aside corporate competition that has raged through the industry, put aside profit and animosity with the goal of uniting together to solve the wheelchair accessible service problem once and for all. The Coalition quickly came up with a solution that they knew would work. After all, who knows how to provide transportation service better than the leaders of the industry. The solution was the creation of a Central Dispatch Center (“CDC”) for WAV’s. The Coalition’s solution was the creation of a WAV Dispatcher (“WAV-D”), which would be created by, operated by and fully funded by the industry.

At a public hearing held by the TLC on September 28, 2017, the Coalition presented the WAV-D solution to the TLC. While the TLC appeared to be open to the idea of the creation of the CDC, it was not convinced and wanted more information and details on how it would work and how it would achieve the goal of providing WAV service. The members of the Coalition met every week, sometimes multiple times per week, to hammer out the details of its WAV-D program. From September, 2017 through December, 2017, the Coalition met with the Chair and other members of the TLC to convince them why the TLC’s proposed resolution to the WAV dilemma would annihilate the industry and why the Coalition’s proposal would thrive. While the Coalition thought the TLC too the Coalition’s proposal under serious consideration, on December 13, 2017, only 5 months after the publication of the 25% rule, the TLC passed the rule and only permitted the industry to operate the WAV-D via a pilot program as an alternate means of compliance with the 25% rule. The pilot program was set to end after 2 years and could be terminated by the TLC at any time. Spending millions of dollars and an untold number of hours on a pilot program that could be terminated by the TLC at any time and for any reason was a was an extremely risky proposition for the industry.

The Coalition along with its lawyers, lobbyists and press relations consultants continued to work tirelessly to convince the TLC that its 25% Rule would destroy the FHV industry and not achieve its goal of providing greater WAV service. Additionally, it was impossible for the FHV industry to comply with the 25% rule. 99% of all FHV bases do not own vehicles and do not employ drivers. A FHV base that does not employ drivers can not compel a driver to purchase a WAV. Additionally, the sheer number of WAV’s that each base would have to purchase to comply with the 25% rule was not only cost prohibitive for almost every licensed base, but were simply not available in the marketplace. The industry was faced with an impossible catch-22. Attempt to comply with a rule the FHV industry knew was impossible to be complied with or participate in the pilot program and hope the TLC does not terminate the pilot program. Business leaders do not operate on hope. Business leaders make decisions based upon knowledge, expertise, data and years of experience. Faced with this impossible Catch-22, the leaders of the industry were left with no alternative but to seek redress in the courts.

Faced with imminent irreparable harm, in March and April, 2018, the industry initiated two lawsuits against the TLC. One was based upon the assertion that the TLC acted beyond the scope of its authority by creating the 25% rule. The other was based upon the contention that the TLC’s rule was arbitrary and capricious. During the pendency of these lawsuits, the State Legislature in Albany revised a bill that was previously introduced in February, 2017 by Assemblyman Pichardo and Senator Lanza. The revival of this bill by Senator Golden in March, 2018 set off a firestorm of events. This bill would have required the TLC to create its own CDC and to fund it on its own. The State Legislature agreed that the Coalition’s proposal for a WAV-D was the best solution to the WAV availability problem, but believed the TLC should fund it as opposed to the industry. As a result of the tireless efforts of the Coalition and its lobbyists, the bill mandating the TLC create and fund its own CDC gained a significant amount of movement in a short period of time. Even the New York City Mayor got involved by opposing the bill mandating the TLC to create and fund its own CDC.

Faced with the prospect of the potential passage of a state law that the TLC did not want and the defense of lawsuits that by their very nature are a gamble, on June 13, 2018, the TLC decided to end their predisposition towards brinksmanship and decided to settle with the Coalition. The settlement calls for the TLC to make a rule allowing the FHV industry to create, operate and fund its own WAV-D. In essence, the settlement will turn the WAV-D pilot program into a permanent rule and such rule would be an alternate means of complying with the 25% rule.

Per the agreement of the parties, the matter will proceed as follows:

–       The TLC will publish a proposed rule creating an exception to Section 59C-17(c)(1) (the 25% rule) in order to make performance of the service standards embodied in the Pilot Program a formal Rule and a permanent exception to the 25% rule;

–       The TLC will follow the required procedures under the City Administrative Procedures act for rulemaking (publishing of the proposed rule, public hearing and vote by the TLC);

  • The 25% rule will be stayed until 30 days after the proposed rule (the exception to the 25% rule) is either adopted or rejected by the TLC;
  • The lawsuit against the TLC will be permitted to continue if the TLC votes to reject the proposed rule or the proposed rule is an annulled, vacated or otherwise invalidated by a court for any reason;
  • It the TLC decides not to approve the proposed rule (the exemption from the 25% rule), the exemptions that are currently provided via the pilot program will remain in effect and all future participant applications and commencement deadlines under the pilot will be stayed until 45 days thereafter;
  • The parties reserve all rights to challenge any future actions by the TLC including the amendment of the proposed rule, assuming it is approved by the TLC.

The proposed rule/exemption, assuming it is approved by the TLC, is a summary of the salient provisions:

  • a FHV base has the option of applying to be an Accessible Vehicle Dispatcher (“AVD”) or associating with a TLC approved
  • The TLC has certain requirements to be able to become an approved AVD. Such requirements include having at least 10 participating/associated bases, submitting an outreach and marketing plan to inform passengers who use Accessible Vehicles about its associated bases’ offerings for Accessible Vehicles and a statement outlining the number of Accessible Vehicles it will have following its approval as an AVD.
  • The bases that receive requests for Accessible Vehicles and who are associated with an approved AVD will be responsible for sending customers’ requests for Accessible Vehicles to the AVD who will then dispatch an Accessible Vehicle, on behalf of the base, to satisfy the customer’s request for such a vehicle.
  • The AVD will be required to send a dispatch within
  • who will be responsible for receiving requests for Accessible Vehicles from associated bases who will sends its requests for Accessible Vehicles to the Accessible Vehicle Dispatcher. The AVD must meet very specific response times when it receives a request for an Accessible Vehicle
  • Bases that associate with an AVD must be able to accept requests from customers for Accessible Vehicles in the same manner which they accept request for passengers not requesting an Accessible Vehicle.
  • Bases that associate with an AVD must submit certain trip records to the TLC in addition to the trip records each base is already required to submit.

Despite the legal and political battles that have been waged between the industry and the TLC, the end result is positive. By making the Coalition’s proposal for an accessible vehicle dispatch service a permanent alternative, the settlement of the lawsuit, assuming it is ultimately approved by the TLC, will now allow our industry to provide the level of accessibility wheelchair riders deserve, while protecting small businesses from expenses that many of them cannot afford. The industry endorsed the creation of a CDC from the very beginning, and are happy to have achieved an amicable result that is in the best interest of all parties.

A very special thanks to Ira Goldstein, Executive Director of the Black Car Assistance Corp. Ira’s commitment to this cause was evident from the start. Ira was instrumental in negotiating with and presenting the CDC WAV-D concept to the TLC. In many ways, Ira was the glue that held the Coalition together. In an industry where competition is fierce, Ira was often the voice of reason that helped Coalition members from becoming warring parties.

Another very special thanks to Dr. Avik Kabessa, C.E.O. of Carmel Car and Limousine Service and a founding member of the Livery Round Table. Dr. Kabessa worked tirelessly over the past 11 months to protect the industry from the harms the 25% rule would have caused and at the same time was instrumental in bringing about a solution for wheelchair riders. At no time did Dr. Kabessa waiver in his commitment to produce a solution to this problem that has plagued the industry and the wheelchair community for way too long. While Dr. Kabessa was not alone in the Coalition’s efforts, his dedication and devotion to this cause was unparalleled.

 

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