Cabs could enact surge pricing as part of bailout for New York City drivers

NEW YORK CITY (WABC) -- Changes could be on the way for cab drivers and passengers in New York City after a task force put together to address the city's taxi medallion crisis unveiled its recommendations to the City Council Friday.

The most notable of those changes could include surge pricing.

Ridership is down at least 50% over the last seven years and the city is trying to find ways to bail out the taxi industry, and anyone who has ordered an Uber or Lyft while it's raining or during a big event knows how surge pricing works: the price goes up when demand is higher.

The City Council will consider whether taxis should be allowed to do the same thing, after the task force advised an examination of possible implementation.

The commission was appointed by the council to level the playing field in an industry that has been decimated by a perfect storm involving the rise of ride-sharing apps combined with predatory loans that saw the artificial inflation of medallion values rise to a $1 million around 2014.

That bubble has now burst, and today, medallions are worth a fraction of what they once were.

Cabbie Angel Lucero said he works 10-hour days six days a week, and last year, he took home just $50,000.

"Since Uber came to the market, (business has been) moving down," he said. "Not like it used to be, not like eight, nine years ago."

Faced with mounting debt and no way out, some drivers -- mostly immigrants who barely speak English -- have even taken their own lives.

"We want to help these taxi drivers," Mayor Bill de Blasio said. "They've been through hell. We want to find a way to help them and their families. We all are trying to find some kind of solution, and this is an idea that might actually offer a positive way forward."

Passengers, however, are not too keen on the idea.

Jenna Costanzo says fixed pricing is the reason she still prefers a taxi.

"No, I mean, they shouldn't have surge pricing for any of them," she said. "I would say Uber gets really expensive, especially at night and times when they're busy."

Council Speaker Corey Johnson, appearing on Up Close, said he's also not sure about the pricing plan.

"I have concerns about surge pricing, even for the for hire vehicle companies," he said. "We need to look at the sector and what is happening."

Taxi driver Ali Elmofti moved to New York from Sudan a few years ago in search of a better life, but he's struggling.

"Last year, I worked the whole year," he said. "Yesterday I filed my taxes. It was $15,000. The whole year."

And while officials talk about a bailout, Elmofti says it's the city cutting into his profits more than anyone with expensive parking tickets.

"Treat us fairly," he said. "Do not take from us our money."

Other notable task force recommendations include:

--The establishment of a debt purchase and modification program for distressed medallion owners
--A study into the feasibility of a medallion buyback program
--A TLC review of its rules regarding Technology System requirements to allow for more streamlined integration of passenger- and driver-friendly software taximeters and to encourage app development and innovation in the medallion taxi industry
--An urgent review the current medallion taxi app services and current market forces affecting medallion taxi app service and provide recommendations for the creation of new or improved medallion taxi apps
--A review of and possible reduction of meter surcharges or rebalancing such surcharges and fees across other sectors of the for-hire industry, including any new airport surcharges and congestion fees
--The Port Authority and the TLC working closely together to help curb illegal street hail activity at the local airports
--A TLC review of the existing fines for the top 10 TLC violations and that such fines be revised if a determination is made that the existing fine or penalty scheme has not been effective

"After years of fighting the injustice of driver debt caused by lax regulations and unscrupulous lenders, and after watching our brothers die from suicide and despair, for the first time, drivers now feel real hope that this crisis of debt and poverty can be resolved," NYTWA Executive Director Bhairavi Desai said. "Restructuring medallion owner-driver debt through a public-private partnership is a win-win for drivers and for investors. We've already spoken to several investors and we're calling on any other interested parties to get in touch with us now. This is New York City, the wealthiest city in the world and home to mission-driven investors. In a city paved by taxi drivers' labor, we know this work can get done. Together, we will set a precedent to address the working-class debt that has become endemic to our economy."

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