CAPPING UBER IN NEW YORK CITY: RAMIFICATIONS FOR RIDESHARES, THE ROAD, AND OUTER-BOROUGH RESIDENTS.

Author:Laurie, Kaitlyn A.
 
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Introduction 943 I. The New York City Transportation Landscape in 2018 946 A. New York City's New Local Laws: Background 946 1. Four Years in the Making 949 2. Attack on Tech for the Sake of...Attacking Tech? 951 3. Uber's Response to the City's One-Year Ban 954 B. Regulating Rideshares Alongside the Taxi Medallion Regime 955 1. Aren't Ubers Just Taxis? 955 2. What Are Green Taxis? 958 C. Rideshares Embrace, Rather than Overlook, the Outer Boroughs 959 1. Rideshares (By the Numbers): More Popular than Taxis in Outer Boroughs 959 2. How TNCs Compare to SHLs and Taxis 962 3. Transit Inequity in the Outer Boroughs 966 4. Deteriorating Subway System Plagues the Entire Transit Landscape 970 5. Yellow Taxis Do Not Reliably Service the Outer Boroughs 972 D. The Transportation Landscape in Light of Rideshares 974 1. Problems Arising as a Result of a Permanent Cap 974 2. In Light of Enduring Transit Inequality, Rideshares Provide Meaningful Service 975 II. Seeking Justice and Transit Equality 977 A. Constitutionality 977 1. Title VI of the Civil Rights Act of 1964 978 2. EJ Executive Order and Administrative Enforcement 983 3. Equal Protection Claims 985 4. Americans with Disabilities Act of 1990 Claims (Title II and Title III) 987 5. New York City Human Rights Laws 991 B. Int. No. 144-B May Be Preempted by State Law 992 1. State Law Grants No Municipality the Power to Limit TNC Vehicles 992 2. What Authority Does the TLC Have? 995 3. Preemption? 996 III. Rethinking Rideshare Regulation 997 A. Avoid Overly Strict Regulations 998 B. Alternatives to Capping Rideshares 998 1. Utilize Rideshares Alongside Public Transit 998 2. Implement Congestion Pricing 1000 Conclusion 1002 INTRODUCTION

At least nine drivers of taxicab, livery, and rideshare vehicles have committed suicide since November 2017, due to financial problems: Lu Wu (March 23, 2019); (1) Roy Kim (November 5, 2018); (2) Fausto Luna (September 26, 2018); (3) Abdul Saleh (June 15, 2018); (4) Yu Mein "Kenny" Chow (May 23, 2018); (5) Nicanor Ochisor (March 16, 2018); (6) Doug Schifter (February 5, 2018); (7) Danilo Corporan Castillo (December 20, 2017); (8) and Alfredo Perez (November 2017). (9) For over a year, the media has put a spotlight on these stories of suicides by drivers--primarily immigrants themselves--characterizing drivers' increasing debt and depression as an epidemic, (10) and adding immense pressure on local legislators and the Taxi and Limousine Commission ("TLC") to take action and impose stringent regulations, like the temporary, one-year cap it set into motion last August.

To some, the sharing economy is an innovative new world of possibilities, from a job creation point of view (to be your own boss, work when and how you want) and a user perspective (order a shared ride, live like a local during your vacation and forgo the hotel for a chic apartment). To others, the sharing economy provides the same services we have always had--just transacted through an app--and is, therefore, something to control and integrate into the existing governance and structural systems currently in place (as opposed to creating new, dynamic laws).

Uber is one of the most polarizing phenomenon in the sharing economy. Uber's informal, accessible app-based system of ordering a private car has rocked the taxi industry from New York to London. Flipping even the traditional structure of entrepreneurship on its head, the gig revolution and rideshare industry's success in New York City (the "City") creates extra costs, including slower traffic speeds, worsening traffic congestion, and increased competition for taxi and livery drivers (who are heavily regulated and capped by a draconian "medallion" system (11)).

There are two competing interests at play: one, the economic needs of all professional drivers, taxi, and rideshare alike; and, two, the problem of race-based refusals that have historically plagued residents living deep into Brooklyn, Queens, and the Bronx. More and more outer borough residents rely heavily upon Uber and other rideshare companies like it. But now the New York City Council is attempting to limit the number of rideshare vehicles on the streets of New York. Called a "ban first, study later" approach by Uber, the City Council's new legislation--Introduction No. 144-B ("Int. No. 144-B")--was passed into law in August 2018, halting the issuance of for-license vehicles for one year. (12) With New York's one-year cap now set to expire in August of this year, the nation's largest cities are watching what the mayor, city legislators, and the TLC will do next.

As part of a package of bills intended to strictly regulate app-based rideshares, relieve congestion, and increase driver pay, the moratorium--especially if it should become permanent--is ultimately a non-evidence-based solution that will hurt the lower-income, minority communities in the outer boroughs of New York City.

Part I of this Note traverses the transportation landscape, from why the differences between rideshares and yellow cabs justify varying regulatory schemes, to patterns of rideshare growth. It also examines the empirical data supporting the notion that a blanket cap on rideshares hurts outer-borough communities, low-income residents, and minorities the most. Part II analyzes the constitutionality of the new law, exploring ways transit advocates can invoke possible civil rights arguments against such a regulatory cap. It also acknowledges the possibility that a law granting authority to the TLC to limit the number of rideshare vehicle licenses is preempted. Ultimately, this Part concludes that there are several underlying policy assertions for why, even if these claims are unsuccessful under federal or state statutes, neither the City Council nor the TLC should implement a permanent cap. Finally, Part III proposes alternative ways of thinking about rideshare regulation, recommendations (like congestion pricing), and ultimately embraces rideshares as an innovative transit alternative.

  1. THE NEW YORK CITY TRANSPORTATION LANDSCAPE IN 2018

    Part I examines New York City's new local law capping rideshare vehicle licenses for one year and the transportation landscape as a result of the rapid growth of rideshares in the last several years. Section I.A. looks in particular at Int. No. 144-B and the events leading to its passage. Section I.B. discusses the differences between rideshare regulation and the taxi medallion administration. It also inspects the overlooked bus system, green cabs, and commuter vans. Section I.C. surveys the empirical data supporting the perspective that, because demand for rideshares in the outer boroughs in particular is significant and growing, rideshares are an important service on which low-income, minority communities rely. Lastly, Section I.D. considers the effect of rideshares on all five boroughs in general.

    1. New York City's New Local Laws: Background

      On August 8, 2018, the New York City Council ("City Council") passed a one-year moratorium on the issuance of new licenses for rideshare vehicles. This is the first time a major U.S. city has enacted a law to limit the number of rideshares, (13) also known as "for-hire vehicles" ("FHVs"). (14) The City's new law is one of the strongest laws attempting to regulate Uber, Lyft, and other transportation network companies ("TNCs") in the country. During this one-year ban, the City says it will study the effect of for-hire vehicles in the city in order to evaluate future rideshare regulation and whether to make the cap on rideshare vehicle issuances permanent. (15) Thirty-nine Council members voted in favor of the cap, while six voted against it. (16) In addition, the new law permitted New York to set a minimum pay rate for rideshare drivers--also the first in the country. (17) Calling the growth of app-based, for-hire vehicles a "crisis," (18) Mayor Bill de Blasio signed the bill into law, adding that the new laws are part of his broader efforts to combat income inequality. (19)

      (1.) Four Years in the Making

      New York City Council's initiative to cap Uber began in 2015. (20) While Uber started operating in New York City in 2011, by 2015, the number of FHVs (21) grew by more than 60%, (22) or to over 63,000. (23) About 20,000 of those 63,000 for-hire vehicles were affiliated with Uber, according to the TLC. (24) At the time, the number of vehicles associated with Uber were growing at a rate of 3% per month. (25) Mayor de Blasio, citing the worsening Manhattan traffic congestion, proposed placing "a cap on Uber's growth, pending a study of traffic patterns." Uber launched an aggressive anti-cap ad campaign, replete with criticism of de Blasio. (27) Before it ever reached a Council vote, de Blasio agreed to drop his plan to cap the number of Uber and ridesharing vehicles operating in New York City, much to the dismay of taxi drivers and medallion-holders. (28) Instead, the company and the City struck an agreement: The City would conduct a four-month study on the effects of rideshare growth on New York City traffic, and Uber would be required to "release a trove of data the city had been seeking for its analysis" (29) of traffic patterns and rideshare growth, which the company reluctantly shared in exchange for avoiding the moratorium. (30) The New York City Charter was thereafter amended to reflect the occurrence of this study. (31) However, City officials warned a restriction similar to the proposed cap "remained a possibility down the line." (32)

      Uber's proliferation today, compared to its growth in 2015, continues to be significant. In 2018, there were 80,000 FHVs in New York City associated with ride-hailing apps. (33) Approximately 65,000 of those vehicles were affiliated with Uber (34)--making it Uber's largest market in the United States. (35) Ubers provide more than 400,000 trips a day, while Lyft accounts for 112,000 trips a day. (36) Furthermore, it is likely that the number of FHVs operating in New...

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