The New York City Taxi and Limousine Commission:
Impacts on New York City Businesses
The New York City Taxi and Limousine Commission (TLC) is a Charter-mandated
agency responsible for licensing and regulating approximately 100,000 drivers and over 50,000
vehicles such as the New York City’s medallion (yellow) taxicabs, for-hire vehicles like
community-based liveries and black cars, commuter vans, paratransit vehicles or ambulettes and
certain luxury limousines. Created in 1971 by the Local Law No.12, the Commission was
primarily founded to deal with the growing number of drivers and to address issues that were
important to the taxi and livery industries. Among TLC’s main objectives are the setting of
taxicabs rates, standards of service, standards of insurance and minimum coverage, standards for
driver safety, standards for equipment safety and design, and standards and criteria for the
licensing of vehicle, drivers and operators. It also performs safety and emissions inspections of
the more than 13,000 medallion taxicabs three times each year, and holds numerous hearings for
violations of City and TLC rules and regulations, making it the most active taxi and limousines
licensing and regulatory agency in the United States.
The Commission’s Board consists of nine members. Eight of these Commissioners
receive no salary and are appointed by the Mayor with the advice and consent of the city council;
five of said members, one resident from each of the five boroughs of New York City, shall be
recommended for appointment by a majority vote of the councilmember of each respective
borough. The Commissioner/Chair, the only one who receives salary, presides over regularly
scheduled public Commission meeting, and is the head of the agency, which maintains a staff of
approximately 400 TLC employees assigned to different divisions and bureaus. Currently, Mr.
Matthew W. Daus is the tenth Commissioner/Chair of the NYC Taxi and Limousine
Commission appointed by Mayor Michael R. Bloomberg and unanimously confirmed by the
New York City Council on July 23, 2003. His term expires on January 31, 2010.
In order to have a better understanding of the NYC Taxi and Limousine Commission and
its significance to the different kind of businesses in the city, we should look back in history and
identify certain events that helped create the Commission from the early 1900s to its formation in
1971. The beginning of the taxicab industry started in 1907 when the New York Taxicab
Company, the first taxicab company in the city, imported 600 red and green gasoline-powered
cars from France. After that more companies opened business and taxicabs began to multiply. By
the 1920s, car manufacturers like General Motors and the Ford Motor Company recognized the
potential of the taxicab market and began operating fleets. However, the most successful
manufacturer was the Checkered Cab Manufacturing Company which produced the famous large
yellow and black taxis during the mid-20s. During the Great Depression, there were more taxi
cab drivers than passengers and concerns about the maintenance and mechanical integrity of the
vehicles were getting serious. In 1937 Mayor Fiorello H. LaGuardia signed the Haas Act which
introduced the medallion system that remains in place today and limited the number of official
taxi licenses in the city. Since then more medallions have been added to the fleet representing
these days around 13,000 medallion taxis in the city. In the 1960s, New York City experienced a
quickly growing industry of private livery services. These services were barred from picking up
people on the street; however they found business in under-served neighborhoods. In 1967, the
city ordered all medallion taxis be painted yellow to help cut down on unofficial drivers and
make official taxicabs mere readily identifiable. Finally, in 1971, the New York City Taxi and
Limousine Commission was established.
The work of the Taxi and Limousine Commission affects indirectly and positively all
New York City businesses. First, by introducing incentives to replace its current yellow cabs
with electric hybrid vehicles, the commission will help to reduce greenhouse emissions. This will
make the city more appealing to tourists. Second, by mandating all taxis should be equipped with
new computer technologies, the commission will make sure that NYC residents and nonresidents have a more productive time in the city. Lastly, by introducing pilot programs such as
the taxi-share plan that will transform many taxi rides into something like car-pooling with
strangers, the commission will try to make it easier to find a taxicab at peak times and to make
taxi rides cheaper by creating discounts and flat rates.
Recently, the Taxi and Limousine Commission have enacted a set of incentives that
allows taxi fleet owners to charge their drivers more to drive hybrid or clean diesel taxi cabs.
This will clearly make a positive impact on New York City environment. Although, this is not
good news for taxi drivers because of the extra cost for leasing environmentally friendly taxis,
having a less polluted city will be more appealing to tourists who are a good source of income to
businesses in NYC. According to a New York Times article dated March 26, 2009, these set of
new rules “will also penalize fleet owners who lower the amount they can charge to lease cabs
that use more fuel and pollute more, like the Ford Crown Victoria”. Prospective tourists who
want to visit New York City will be pleased to spend their time and money in the city for some
extra days knowing that they are in a eco-friendly metropolis. All these new rules introduced by
the TLC regarding the city environment will positively impact on NYC businesses by helping
them to attract new sources of income.
Moreover, the TLC has mandated that all taxi drivers should have some type of computer
technology installed in theirs cabs. For instance, taxicabs now accept cash and credit/debit cards
for all fares by the use of a credit card/debit card payment system installed in the rear of the cab
to provide a high level of security as passengers swipe their own card and are in control during
the transaction. Also, taxicabs provide passengers with both information and entertainment by
installing a “Passenger Information Monitor (PIM)” as defined by the TLC in the back seat of the
cab. The information provided varies from news, maps, weather, and directions to important
places. There is also a “Driver Information Monitor (DIM)” installed in the front seat that
permits messages to be sent to drivers when the vehicle is stopped. These messages can be used
to assist drivers in returning lost property, to be made aware of large events or fare opportunities
and to help avoid traffic congestion. All these new technology implementations will make taxi
rides more pleasant and comfortable for NYC residents and non-residents. For example, they can
save time and money by avoiding traffic congestion and fare increase due to slow traffic. The
money saved by these people could be spent in other things within the city helping again its
economy indirectly.
And last but not least, the Taxi and Limousine Commission have introduced two pilot
programs that will help taxi riders find cabs easier than now during the morning rush and save
money with their rides. As an article in the New York Times dated May 27, 2009 explained, the
first pilot program proposes that up to 1,000 yellow cabs be “equipped with meters that could
calculate two fares at once, allowing cabbies to stop en route and pick up additional passengers”.
The article also says that the cabs would be marked as “sharecabs” and they would have
electronic sings showing the neighborhood they were going to, making it possible for people
heading in the same direction to hail them. Needless to say, there would be a 50 percent discount
for riders who share a cab. The second pilot program intends to install six new group-ride
yellow-cab stands that would take up to four passengers along some of the busiest routes. These
taxi stands would be designated as “group-ride pickup locations” and would be available during
the morning rush period, from 6 to10 a.m. According to the NY Times, “the cabs would travel in
a designated corridor and charge passengers a flat fare”. Passengers can be dropped off anywhere
along the route. It is clear that under both proposals, riders would pay less and drivers could earn
more, despite the discounts, by carrying several paying passengers at once. Again, the savings
that people can make with these two plans can be used to boost the New York City economy by
spending it in different business in the city.
The importance of the New York City Taxi and Limousine Commission regarding the
city’s economy is in some way very important. That is, although the commission is not directly
involved with the number of different businesses in New York City, its existence plays a
significant role concerning the people who live or visit the city. The Taxi and Limousine
Commission makes sure that over the 50,000 vehicles that it regulates provide a satisfactory
service to residents and non-residents of NYC. By introducing new laws or regulations about
eco-friendly vehicles, by getting their vehicles up to date with new technology advances and by
proposing new programs that will help people move around effectively during rush hours, the
commission with its initiatives will help individuals in New York City save time and money, two
basic elements in any type of economy.