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Commissioner’s Corner

October 2006

As most of you may have already heard, the TLC is considering a taxicab rate of fare adjustment. Also, the new taxicab technology customer service enhancements will soon be in every taxicab. While it is important to note that the fare adjustment is still just a proposal at this point, and not yet a “done deal,” the taxi technology initiative – which has been in the making for several years and was promised to passengers some time ago – is very much a “done-deal.” I would like to spend some time talking about both of these important issues.

New Taxicab Technology Improvements Coming Soon!
I am pleased to report that we are nearing the next step in the customer service technology enhancement project – which includes acceptance of credit/debit cards, driver text messaging, electronic capture of trip-sheet data and passenger information screens. In brief, we have completed testing to ensure that the technology works, and are now just weeks away from publicly rolling out as many as 50 cabs equipped by each of the four technology providers, a 200-cab total.

In order to help keep everyone up to speed on this project, we have embarked on an aggressive outreach campaign in a number of ways, most notably in an industry demonstration summit held on Saturday, September 30, as well as the publication of brochures and visits to the airport taxi holds to explain the new technology to drivers. These efforts have two goals: (1) to help the industry understand what is on the way and how it will benefit them and improve the riding experience all around; and (2) to clear-up misconceptions and disinformation that is floating around out there. 

Simply put, this project is all about helping both customers and drivers by bringing the taxicab industry into the 21st Century. I should point out that some of the new technology that I will be describing exists piecemeal in taxicabs around the world right now at this very moment…it had just never before been integrated in a single comprehensive package as we have done here in New York City.

Technology Benefits Drivers
What are the anticipated benefits for drivers?
· Bigger tips
· No more trip sheets to fill out (that means no more trip sheet summonses!)
· More business – more passengers to serve with less cruising time

Credit & Debit Cards
First, this program will allow every taxicab passenger to pay for their ride with a credit or debit card, a consumer option that is a proven necessity for virtually every merchant and service provider here in the U.S. and around the world. Every indication is that credit and debit card use will speed transactions to the point where they may even actually be faster than using cash – and will hopefully result in bigger tips and more trips.

Passenger Information Screens

In what would be the most visible aspect of them all, the system will also include a passenger information screen located in the rear compartment of each taxicab and mounted to the partition. This screen will become the passenger’s portal for “silent” safety and public service announcements, an electronic map that allows them to watch their trip through the city, possibly news, sports, weather and other kinds of entertainment and special content, and will even help them pay their fare at the end of the ride. Remember, the screen is a necessary component to processing the credit or debit card transactions. It will also hold all the information that now exists only on the delicate paper stickers and maps that exist in taxicabs today, which had previously been our only means of communicating with the passenger. It is 2006, and we can do better than that! Also, this will not be the return of the “talking taxi” – as passengers can turn the devices off, causing them to be silent for most of the ride.

Text Messaging & Location Technology

The primary type of phone call the TLC receives through 311 is the report of property lost by passengers in taxicabs – over 54% of the calls received last year. We would like to communicate better and more effectively with drivers on the streets, to let them know if passengers recently left valuables behind, about emergencies that may arise, and to match empty cabs with people who want to fill them. For example, two-way text messaging and vehicle location technology allows us to send questions or information to drivers (only while they are stopped or moving slowly) on a real time basis……such as: Do you have a laptop in your rear seat? Water main break on Third Avenue. Queen Mary II docking at Brooklyn Cruise Terminal at 1 p.m...-..useful information and questions that either need no answer, or can be answered with a single pre-programmed button. We would actually be able to narrow down the number of taxicabs to where the messages are sent to the immediate vicinity of where cabs are needed. This is clearly non-intrusive information that benefits both the driver and the passenger, and cannot be accomplished without location technology such as Global Positioning Systems (GPS).

The disinformation I mentioned earlier concerns rumors that the TLC will use vehicle location technology to “track” drivers by collecting new kinds of information. The reality, frankly, is much less sensational. Today, every driver in the taxi industry has a paper trip sheet and a clipboard, and they are required to scribble down certain details….time, pick-up location, destination, fare, etc. These pieces of paper must be stored for three years. Now, this very same information – no more, no less – will be collected electronically and automatically. No more trip sheets, no more summonses for poorly or incorrectly filled out trip sheets, but lots of convenience and efficiency. To reiterate…..the only information that will be collected through the GPS vehicle location systems is the same information that is collected today, except that it is not on paper. For example, for statistical purposes only, if we need to know how many on-duty taxicabs are available during rush-hour at certain intersections, we will obtain the number only – and will not be interested in whether your taxicab was one of them. In fact, information gleaned from these “electronic trip sheets” could prove useful in calculating future rate of fare adjustments. The bottom line, though, is that anyone who tries to convince you that we will be using this information for anything other than improving efficiency and customer service is attempting to play on your fears for whatever political agenda they are promoting.

One question that we hear a lot is “who is going to pay for these systems?” The simple answer is medallion owners, not drivers. The only cost that drivers will incur is the approximately 3% to 4% credit/debit card transaction fees which, for a $20 fare would represent less than $1. How much will the systems themselves cost? There is no “one cost” that could be quoted for the systems, because there are four different companies that will be marketing their technology packages as competitively as possible. But it is safe to say that, depending on whether the company someone chooses uses advertising to offset costs, the entire three-year cost of ownership could range anywhere from $2,900 to $7,200…complete. It could even be said that choosing a company and signing up for a package is very much like choosing a cell phone account, where the price varies depending on what services and equipment you choose. This is a maximum amount we have set, after aggressive and successful negotiations to ensure the selection of the very best quality equipment at the most reasonable price. For medallion owners, less than $1000 per year is reasonable considering that the taxicab industry – has earned at least $800 million in additional income since the last fare increase in 2004 – which was in part made to pay for these systems, and that since then, each owner’s medallion has increased by between $158,000 and $245,000 in open market value. I should also mention that, for those medallion owners who have existing contracts with credit card processors and advertising providers, there is a contractual clause that will allow you to choose any system you want, with no obligation on your part to go with the company you originally contracted with for either credit card processing or internal advertising.

If it is not available already by the time you read this, there will be a very comprehensive area on the TLC web site (www.nyc.gov/taxi) that provides additional details about every aspect of the customer service enhancements. We are justifiably proud of the hard work we have put into getting to this stage, and while this web site enhancement will be providing you with essential knowledge, I hope you will forgive us for using it as a vehicle to show off a little.

Taxicab Rate of Fare Adjustment
On the fare increase proposal, I had pledged since the last fare increase in 2004 to periodically revisit the fare structure rather than consider large adjustments after long periods of time. Just such a review recently suggested that, while drivers are – on average - compensated at an appropriate level, the waiting time aspect of the fare formula was off balance. While both the initial fare and the mileage components have been “tweaked” over the years, the wait time – the metered charge for time while the vehicle is either stopped or traveling slowly – has remained unchanged for a very long time.

One aspect of the imbalance that I found particularly compelling was that when comparing the nine major U.S. taxi cities (Miami, Boston, San Francisco, Boston, Los Angeles, Seattle, Las Vegas, Philadelphia, Chicago and New York), New York is the lowest among them at $12 per hour in wait time. The city nearest to us in price came in at $20 per hour – while Seattle charges $30 per hour. The imbalance was clear, and needs to be corrected to ensure that some drivers earn a “more consistent” wage. Right now, this imbalance makes it possible for a driver – just due to “the luck of the draw” – to receive too many “wait time” fares while other drivers receive more better-paying high-mileage fares.

At this point, the TLC is considering an adjustment that would modify the fare formula from 40 cents per 120 seconds to 40 cents per 60 seconds, bringing the hourly wait time wage to $24, placing New York City’s wait time fare squarely in the middle of the comparative road. Also, I am recommending that the Commission implement a reverse flat fare of $45 for trips from anywhere in Manhattan to JFK Airport, which would complement the highly popular flat fare that has been in place for many years for trips from JFK to Manhattan. Each of these proposals will be the subject of a public hearing scheduled for 9:30 a.m. on Wednesday, October 25 at 40 Rector Street, on the 5th Floor in Manhattan.

Let’s see what happens! Stay tuned……………


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