The NYC City Council issued Resolution 955 calling upon the New York State Legislature to pass, and the Governor to sign, legislation that is supposed to equalize the amount of per-trip taxes imposed on taxis and for-hire vehicles in New York City.
The Livery Roundtable is disheartened with the issuance of such resolution which incorrectly and unfairly combines the for-hire vehicle sectors and assumes that since each provides transportation by pre-arrangement, that they should all be treated alike. This is just another attempt to thrust an improper tax upon a specific sector of the transportation industry which continues to reel from the never ending added regulatory burdens. For example, the NYC Livery is subject to 164 more penalty regulations than Black Car and/or Luxury Limousines. Additionally, the NYC Livery has an annual additional cost of approximate $4,500.00, which include the mandated camera and distress light in every vehicle, the Livery Bill of Rights, the driver license being mounted in the vehicle and a far more rigorous base application and renewal process.
Resolution 955 presents the Livery Industry as the sector that has “escaped” the per trip tax. Unfortunately, those who seek to support such a proposition not only turn a blind eye to the added costs that are solely borne by the the NYC Livery, but also seem to lack an understanding of the industry in general as it is mechanically unable to collect a per trip tax. This is an easy matter for the Black Car/Luxury Limousine sectors, but is simply not possible in the livery industry. Unlike Black Cars and Luxury Limousines, whereby customers pay the company and drivers pay commission on a per-trip-basis, in the Livery sector, customer pay the fare directly to the driver and the driver pays the base a flat weekly that is NOT based on a per trip basis. For these reasons, the NYC Livery’s business model precludes collecting a tax or surcharge from the passengers on a per-trip basis.
Furthermore, according to the TLC rules that provide the classifications of vehicles, Black Cars/Luxury Limousine fares must be at least 90 percent or more non-cash. It is easy to assess sales tax or per trip basis from a credit card processing transaction. Equally, the Yellow and Green taxis have deductions automated through the TPEP system which provides for the collection of surcharges. Thus it is built into the Yellow/Green Taxis system to collect taxes. Distinguishably, the Livery operates primarily on a cash basis. Such a system does not readily incorporate the ability to collect taxes. There is little doubt that imposing a tax on the NYC Livery sector will result in invasive audits and devastating fines on livery bases which are predominantly small minority owed businesses.
Unlike Black Car/Luxury Limousine, the livery is the community car for Northern Manhattan and the outer boroughs. The persons transported by livery cars are principally traveling within their communities and principally pay with cash due to insufficient credit, which distinguishes them from Black Car/Luxury Limousine that mostly utilizes credit cards and/or corporate accounts. The business model of the NYC livery is a distinctive feature of this sector of the for-hire vehicle industry and it serves to illuminate the fact that this is the exact reason why the New York State Legislature found it appropriate in 2010 to exempt the NYC Livery sector from sales tax collection. The black car/luxury limousine’s misleading claims to the contrary are clearly designed to blur for-hire vehicle sector distinctions all in a vain attempt to burden the sector of the industry that is least able to bear the costs associated with such an imposition. The exemption provided in 2010 was a conscious decision based on the legislature’s understanding that the Livery sector is unable to comply with a per-trip fee. Also, the legislature recognized that the Livery has historically been subject to regulatory burdens that make it more disadvantaged than those in the other sectors. In effect, Resolution 955’s so called “equalizing” request will only serve to further burden those least able to afford the increased costs of utilizing neighborhood community cars.
Resolution 955 describes the “blurring” of the lines between sectors as rational in order to “equalize” the burden on all sectors of the for-hire industry. The proposition is fatally flawed because it fails to illustrate how the Livery sector’s current situation hurts any of the other FHV sectors. In effect, the blurring of the lines is only to the advantage of the app companies, which are Black Cars, not Livery. While in theory, the Livery and Black Car/Luxury Limousine markets should work in a fair competitive environment, in the real world this has not been the case. For this reason, app companies have elected to become Black Car companies, a FHV category that subjects them to minimal regulatory obligations. This classification is in opposition to app companies’ characteristics which are more like the taxi service due to their on-demand service, rather than the Livery sector, which provide transportation by pre-arrangement.
As public policy, the City of New York should not be urging the imposition of financial burdens on those businesses who are least able to pay them, much less placing more monetary burdens on the persons who utilize livery service. Livery bases provide service in underserved communities, many of which are low-income communities that continue to face many economic hurdles. They require transportation that is not only dependable, but is reasonably priced. What they don’t need, nor deserve, is to pay a tax or surcharge when riding in a community car to the grocery store or to church. Unfortunately, Resolution 955 sends a message to Albany that New York City desires a regressive transportation tax system, which only helps big business and harms the underserved communities. This is hardly a tax that will serve the stated purpose of placing each sector for the for-hire vehicle industry on equal footing.