No, New York Didn’t Just Ban Electric Taxis
All over social media, I’m seeing electric vehicle enthusiasts call out New York’s Taxi and Limousine Commission (TLC) for a recent vote, which they say bans electric vehicles from working as taxis. There’s just one problem: that’s not what actually happened. It’s still possible to operate an electric taxi in New York City.
This hubbub all started when Revel decided it was going to operate a fleet of 50 Tesla Model Ys as taxis in the Big Apple. Fearing congestion and other companies jumping in and doing the same, the TLC decided to stop issuing new licenses for electric vehicles, instead telling Revel to purchase gas licenses and convert those licenses to cover their EVs.
On the surface, that sounds like they’re banning new EVs, but the reality of the situation isn’t that simple.
The Historical Background
The issue here actually has its roots in the Great Depression. In the 1930s, there was no limit on the number of taxi cabs that could operate in the city. Like today’s rideshare driving before the pandemic, there were too many drivers and not enough passengers, and this led to cab drivers working longer and longer hours while making less money and not having any time or money left to maintain their vehicles.
To alleviate this issue, the city initially wanted to create a taxi cab monopoly, but the mayor was accused of taking a bribe from one of the bigger companies. Instead, they decided to institute the Medallion System in 1937. Under this system, a limited number of CPNCs (Certificate of Public Necessity and Convenience) were issued to be displayed on the exterior of the cab and attached with a rivet, and these badges came to be known as “medallions.”
The city then went decades without issuing any new medallions for drivers. If you wanted to get into the cab business, you’d have to find someone who was getting out of the business and buy their medallion. As the city grew and crime got cleaned up in the 1990s, medallions increased in value, sometimes selling for as high as $750,000. This led to people taking out big loans to get a medallion, which secured them a career for as long as they owned it and allowed them to pay back the loan while working.
One side effect of the medallion system was that independent cabbies often couldn’t afford to buy a medallion and didn’t have good enough credit to get a business loan for that. This led to cab companies with a medallioned vehicle “leasing” the cab out to drivers by the day, and for a rate they knew would soak up most of the day’s fares on a good day or leave the cabbie owing money on a bad day.
Rideshare Licenses Killed Cabbies (Sometimes Literally)
Those who were able to get loans ended up in a bad spot when the cab industry dried up in 2014. New York allowed Uber and Lyft drivers to flood the streets with cheap rides, and very few people wanted to hail a cab. Drivers who had paid big bucks for a medallion had monthly loan payments for thousands of dollars, which they suddenly could barely cover, leaving them with nothing left over to pay their other bills.
Facing financial ruin, many drivers declared bankruptcy. These dark times also led a number of them to commit suicide. Unlimited licenses for rideshare drivers eventually led to them also facing financial problems. There were simply too many drivers chasing too few passengers. Suicides, bankruptcies, and bad publicity eventually led the city to putting a cap on the issuance of rideshare licenses in 2018.
Limits Were Placed, But EVs & Accessible Vehicles Excepted
The city still had two problems with taxis and rideshare driving: there weren’t enough handicap-accessible vehicles and emissions needed to come down. To deal with that, the city left two exceptions open for new for-hire vehicle licenses: electric vehicles and those built to carry wheelchairs.
This has been good for the city so far, because a trickle of drivers are doing those things. This helps improve both emissions and the situation for the disabled, but it hasn’t happened in large enough numbers for it to become a problem for the existing drivers. Operating an EV or accessible vehicle comes with disadvantages that lead independent drivers to shy away from doing that, so there hasn’t been any sudden deluge of drivers.
When Revel came along and wanted to license 50 cars for for-hire duty, that put the TLC in a tight spot. Let that go through, and other companies would probably follow, creating a new deluge of cars that congest the city and make life harder for existing drivers. Their only option that didn’t screw the larger pool of drivers and their families was to shut the program for unlimited EVs down.
EVs Still Allowed, But Only By Purchasing Existing Licenses
This doesn’t mean at all that EVs can’t be used as taxis or other for-hire vehicles. It just means that like any other vehicle, they’d have to purchase an existing medallion or for-hire license to get to work. Or, they could wait for a semi-annual review to conclude that new licenses are needed and buy those ones to work.
The big takeaway from this situation isn’t that the TLC hates EVs. They allowed unlimited EVs for years, and only withdrew that policy once it proved to be a potential problem for the whole industry. Now, EVs are back on even footing with gas cars.
The TLC could still do better here, though. They could require all new licensees to go electric, and only allow the current gas licensees to stay on gas until they go to replace the vehicle with another one. That way, all new licensees and transfers would mean a new electric cab. They could also find ways to help people in the existing pool of drivers who were hurt by their bad policies in the past.
Whatever they choose to do, it still wouldn’t be fair to say they banned EVs or said no more licenses for EVs. It’s a complex situation that requires the action they took, even if that means Revel will have a harder time getting started.
Featured image provided by Revel.
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