What does the New York TLC have against e-hailing?

By Erin Griffith , written on December 12, 2012

From The News Desk

Tomorrow New York's Taxi and Limousine commission will vote on whether to allow its drivers to use e-hailing apps to find fares. Five of the nine commissioners are needed to vote in favor of the proposal, but only four have thus far expressed support. After reading up on the issue, my question is, why?

It's been a bit of a convoluted journey to get to this point. Ignore previous Uber drama, because the company basically barged into the city with its UberTaxi e-hailing service without so much as asking the TLC for permission to do so. Unsurprisingly, they were rebuffed.

Now, the TLC is deciding is whether NYC's yellow taxi drivers can use any app -- Hailo, GetTaxi, Taxi Magic, TaxiSelect, etc. -- to pre-arrange rides. If it votes yes tomorrow, those apps will be able to apply for a license to offer their services, and drivers will be able to legally use them to pre-arrange rides.

There are plenty of reasons to be skeptical of the idea. But the more I read about it, and, having talked to Hailo CEO Jay Bregman, the more I think the TLC's concerns can be easily put to bed. E-hailing makes so much sense, as evidenced by Hailo's success in cities like Dublin, Boston, London, Chicago and Toronto. But even though New York City has been a trailblazer on such forward-thinking innovations as credit card requirements, some TLC commissioners are opposed to e-hailing. Here are the answers Bregman had for few key questions:

Will it make it more difficult to hail taxis without an app? The TLC killed a similar radio initiative back in the 80s for that very reason. But the answer is likely no -- Hailo argues that in London it has helped drivers get 30 percent more business per day. (More than half of London's 23,000 drivers use it.) Many New York taxis spend time inefficiently driving around looking for fares -- 40% of the time, Hailo reports based on its assessment of fare times. The goal is to help them find fares more easily. Already 1000 verified drivers in the city have downloaded Hailo and use it to communicate with each other about hot areas for fares. Hailo even hacked its app during Sandy to help drivers communicate about gas availability and bridge and tunnel closures. The drivers are eager to be more efficient.

Will it distract drivers? No. Most of the apps, including Hailo, have a one-touch pick-up option that is no different from touching a dispatch radio. Hailo provides them with chargers and cradles at no cost.

Will Hailo rip people off? The company charges $1 per fare. My guess is that people will use it after they've failed to hail a cab the old-fashioned way and are ready to give up and take the train. At that point, a dollar is well-worth knowing a cab is on its way.

Will it mess with airport lines? No, there are already rules for New York's airports so taxi drivers will have to go through the taxi lines like usual. Drivers can use apps like Hailo to find out which terminals have the biggest demand, though.

Will there be more refusals? No, because drivers don't know where you're going when they agree to pick you up. Hailo has been particularly popular with disabled users in London for this reason.

So why is the TLC opposed to it? Bregman says he isn't entirely sure. "The really sad part is that even people who are nervous about this, they understand it's inevitable," he says. "But it's for political reasons I can't fathom that they're dithering on this to protect other industries."

TLC member Nora Marino told the Wall Street Journal she believed the commission should postpone any action because of the effect apps could have on livery and black car drivers.

At a hearing in November, a number of black car companies testified against e-hailing for yellow taxis, including Carmel Limo, which has launched its own e-hailing app.

"If the vote doesn't go well, we will be resigned to the dark ages for some period of time," he says. Bregman (and Fred Wilson) has suggested supporters of e-hailing email the TLC before the vote tomorrow: [email protected].

Update: The TLC has voted in favor of a one-year pilot program. Seven members voted in favor, two abstained from voting.

[Image by Steve Wilson]