Arranging FHV and Taxi Service via Smartphone Applications – (Last Updated 10/1/2015)
The TLC is dedicated to improving access to safe and plentiful taxi and for-hire vehicle service, and embraces new technologies that prove effective in achieving its goals. In recent years, smartphone applications (apps) designed to connect passengers with taxicabs and for-hire vehicles have generated excitement as well as numerous questions from passengers, TLC Licensees, and smartphone app developers about what is permitted under TLC’s Rules.
At present, passengers can arrange rides using smartphone apps in both yellow medallion taxicabs and For-Hire Vehicles (FHVs)—a category of for-hire service which includes Black Cars, Livery or Community Car Services, luxury limousines, and the new apple-green Street-Hail Liveries (SHLs). Each of these types of TLC-licensed vehicles has its own set of guidelines pertaining to app usage, and the TLC has adopted new rules that codify these standards and address various business models for providing app-based service which are described in more detail below. But it is important to note that any companies that wish to operate point-to-point for-hire service within the five boroughs, regardless of the way(s) they connect drivers to passengers, must obtain a license to operate with the TLC, and must work only with TLC-licensed drivers and TLC-licensed vehicles.
Yellow Medallion Taxicabs
In January of 2015, the Commission passed Rules allowing passengers to use TLC-licensed apps to electronically hail (E-Hail) yellow taxicabs and SHLs and to pay for their rides. These Rules are effective as of March 12, 2015. The Rules’ passage followed a two year-long Pilot Program, during which the TLC evaluated the use of smartphone apps that provide E-Hailing in yellow medallion taxicabs.E-Hailing in yellow medallion taxicabs must align with the following:
- E-Hail can be used to solicit yellow taxi rides by passengers that are currently ready to travel.
- E-Hail requests for yellow taxi pickups are permitted throughout the five boroughs, with the exception of pickups at La Guardia and JFK airports.
- Like street hailed taxi fares, E-Hailed taxi fares must be calculated using the meter, and credit card payment must be integrated into the existing technology in the backseat of the cab. Depending on the E-Hail App, passengers can either pay using the existing in-vehicle equipment, or through a credit card stored in the app that is integrated into the in-vehicle equipment.
Use of an E-Hail App to arrange a ride in a yellow taxi is completely optional to both the passenger and the driver, and street hail service is still available to both parties.Use of an E-Hail application by a driver must be restricted while the vehicle is in motion to prevent distracted driving, only permitting acceptance of an E-Hail request by a single touch. Smartphone application developers that meet all TLC requirements and become licensed E-Hail Providers can work directly with yellow cab drivers to provide rides using E-Hailing technology. For more information about specific E-Hail App requirements that must be met by smartphone application developers interested in becoming licensed E-Hail Providers, please refer to the E-Hail Rules.
For a complete list of TLC-licensed E-Hail Providers, click here. For more information on how to apply to become a licensed E-Hail Provider, visit the E-Hail Application webpage here.
For-Hire Vehicles (FHVs)
Passengers are also permitted to arrange and pay for FHV rides using smartphone apps in New York City, and the TLC adopted Dispatch Service Provider (DSP) rules in June of 2015 that clarify how apps and other passenger-facing booking tools can be used to pre-arrange for-hire service. These DSP rules codify a framework that has been in place since 2011: in order to offer FHV service via an app, a smartphone app developer must either 1) obtain its own FHV base license, or 2) obtain a new Dispatch Service Provider license and enter into an agreement with a licensed FHV base to dispatch that base’s affiliated vehicles on behalf of that base.
This framework allows innovative companies to come to New York City and work with TLC-licensed bases to offer new and exciting booking tools that take advantage of the latest advances in technology. Companies can offer these services without the burden of obtaining a base license, while still being accountable to the TLC and providing important protections to bases, drivers, and passengers. The rules also increase the service standards for existing bases so that they too can take advantage of new technologies to provide for-hire service via their own proprietary apps, or by licensing commercially available software that can be custom-branded for their use.
Regardless of the method that a company chooses to operate under in New York City, FHV service must align with the following:
- Companies offering point-to-point transportation service within the five boroughs that connect passengers wanting to travel to drivers who take them, for a fee, must obtain either a base or DSP license with the TLC, and can only work with TLC-licensed drivers and TLC-licensed vehicles.
- FHV apps and other passenger-facing booking tools can be used instead of telephone contact to book FHV reservations in advance, but as with all FHV trips, fares must not exceed the rates filed with TLC by the FHV base and/or DSP that is dispatching the vehicle.
- Apps used to book Livery vehicles through Livery bases must provide a binding fare quote to the passenger at the time of the reservation, but apps used to book Black Cars through Black Car bases are allowed to use a rate to calculate the fare based on the actual trip taken. However, apps used to book Black Cars through Black Car bases that that uses price multipliers or “surge pricing” must be able to provide a total fare estimate, in dollars and cents, whenever surge pricing is in effect.
- Regardless of the type of FHV vehicle used, use of any of the words “taxi,” “taxicab,” “cab,” “hack,” or “coach” to advertise the dispatching service is prohibited (see Industry Notice 13-33 for more information). This includes use of these words in the smartphone app’s name or website.
Note that existing rules governing which vehicles and drivers that bases can work with still apply: TLC-licensed bases are permitted to dispatch vehicles that are affiliated to another FHV base of the same class (e.g. a Black Car base can dispatch non-affiliated Black Car vehicles and Livery bases can dispatch non-affiliated Livery vehicles), provided that the dispatching base notifies the passenger that the vehicle is from another base and provides all of the identifying bases’ information to the passenger for accountability purposes. However, while companies that have their own base license can dispatch vehicles affiliated to another base, this is not something that DSPs who do not have a base license are permitted to do. DSPs are restricted to working with only the vehicles affiliated with their partner-bases.
TLC is currently accepting DSP applications from dispatching companies who do not currently have a TLC license and wish to continue operating in New York. Information about how to apply can be found here. For more information on all of the rules governing Dispatch Service Providers, please refer to the Dispatch Service Providers (DSP) Rules. As of October 2015, TLC updated the base licensing and renewal process to reflect the new requirements of TLC licensed bases that operate via apps or other passenger facing booking tools. Information about how to comply with the new base requirements can be found here. For more information about obtaining a base license and all of the requirements for licensure, please refer to Chapter 59 of the TLC Rules.
Street Hail Liveries (SHLs)
Street Hail Liveries (SHLs), also known colloquially as Green Cabs or Boro Taxis, are a special class of FHVs that are authorized to accept street hails and E-Hails in addition to their normal dispatch work. Street hails and E-Hails by SHLs are permitted only in the outer boroughs (excluding the airports) and in Manhattan north of W.110th St. and E. 96th St., and dispatch trips by SHLs are permitted only in the outer boroughs (including the airports) and in Manhattan north of W.110th St. and E. 96th St. SHLs have meters like yellow taxicabs, but are also affiliated with FHV bases that can provide dispatched trip requests to the vehicles. Because SHL service includes a combination of street hailing and pre-arranged dispatching, app usage in SHLs is unique.
In practice, passengers can either use an app or other passenger-facing booking tool to request an SHL be dispatched to them by a base under the FHV rules (or through a DSP once the new DSP rules are in effect), or they can E-Hail an SHL as they would a yellow taxicab, subject to the same E-Hail Rules that apply for E-Hail taxi service. App developers interested in working with SHL drivers and bases to dispatch trips (including pre-arranged requests that are booked in advance) fall under the same requirements as do their Black Car and Livery counterparts, enumerated in the section above (e.g. they must obtain a base license or a DSP license). App developers interested in offering E-Hail service in SHLs and working directly with drivers and not through a base must obtain an E-Hail license from the TLC, and any fare charged must be calculated using the meter.
Although the E-Hail rules cover both yellow cabs and SHLs, they differ in a few important ways. First, unlike yellow taxis, SHLs cannot be E-Hailed within the Hail Exclusionary Zone. Second, although E-Hailing of SHLs and yellow taxis is prohibited at airports, dispatching SHLs to airports is permitted; thus apps that choose to operate according to dispatching requirements in conjunction with one or more FHV bases would be permitted to offer airport pickup requests. Finally, SHLs are subject to the same prohibition on the use of taxi-like words that applies to other FHVs, as SHLs are FHVs with special street-pickup privileges.
For more information on rules governing the provision of street hail service in SHLs, please refer to Chapter 82 of the TLC Rules, governing SHL Service.