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NYC regulators propose rules for taxi apps

NYC regulators propose rules for taxi apps

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The New York Taxi and Limousine Commission (TLC) is releasing a list of proposed rule changes that would permit the use of smartphone apps to hail and pay for taxicabs, provided they work with the city’s own computerized payment and trip data system. The proposal comes two weeks after regulatory disputes forced the upstart Uber to end its own taxi service in the city.

Every app would need to be licensed

The proposals would require any e-hail app to obtain a one-year, renewable license from the TLC, but would permit both payment within the app and with cash or credit card inside the car. Previously, Uber ran afoul of regulators by settling fares outside of the city’s own T-PEP system, which processes payments and transmits trip sheet data to the TLC, among other functions. Under the TLC’s plan, in order to be sanctioned, e-hail apps would need to be compatible with this system, obtaining fare data directly from the meter and confirming payment to the driver. Also, in an effort to protect riders from discriminating drivers, apps would be forbidden from disclosing the passenger’s destination information, name, or other identifying information aside from their pickup location. Likewise, drivers would be free to opt out of picking up e-hails altogether.

The proposed rules would also forbid drivers from taking any payment for e-hail trips other than the fare and tip, ruling out Uber’s bonuses, and helping to ensure that riders hailing cabs the old-fashioned way have a fair shot at finding a ride. And while Uber mandates 20 percent gratuities in other markets like its recently-opened operation in San Francisco, the TLC’s rules would instead ensure that riders have final say about how much to tip their drivers.

Any mandate for new equipment will be contentious

There’s also another potential hurdle: existing T-PEP terminals, which cost between $2,900 and $7,200, likely aren’t set up to communicate with smart devices, and any requirement for taxi companies to pony up for new equipment is guaranteed to be controversial. To help keep costs low, however, the Commission is proposing a licensing system for would-be T-PEP manufacturers, hopefully improving competition and letting cab companies shop around for the best deal when existing contracts expire in February.

These proposed changes are just the first step toward a framework for getting licensed apps on New Yorkers’ smartphones, with public hearings scheduled for November 29th and a vote by the Commission on December 13th. In a statement, TLC Commissioner David Yassky said he welcomed feedback "so that we can finalize these rules and get apps on passengers’ smartphones by early next year."