Dec. 13 (Bloomberg) -- New York City taxi passengers will be able to use smartphones to order cabs from the curb in a one-year test program, the Taxi and Limousine Commission said.
The panel unanimously approved the proposal today with two abstentions, scuttling a previously planned vote on a permanent licensed system of electronic applications for hailing. The decision to test the program came after some commission members expressed concern that the change would hurt limousine and livery services.
The pilot program, which goes into effect Feb. 15, will allow New Yorkers to flag a cab without having to wave their arms or shout at drivers in street traffic, a city tradition for decades. Taxi apps are already used in cities such as London, San Francisco and Boston, according to New York officials.
“We should not ignore technology that’s out there,” said commission Chairman David Yassky. “When you have technology that’s already being used and benefiting passengers, regulations shouldn’t stand in the way.”
The apps would enable passengers to hail taxis within about a half-mile in Manhattan’s business district, south of 59th Street, and within 1.5 miles (2.4 kilometers) in the rest of the city, Yassky said. Drivers can enable the system with a single touch of their hand-held device, he said.
The test will allow customers and drivers of New York’s more than 13,000 yellow cabs to get used to the apps and permit the commission to evaluate their usefulness, Yassky said. The TLC may decide to forgo the program, make it permanent or order changes, he said.
Representatives from passenger-app companies, including Uber Technologies Inc., Hailo, GetTaxi Inc. and RideCharge Inc.’s Taxi Magic, were present for the vote, said Allan Fromberg, a TLC spokesman.
Travis Kalanick, co-founder and chief executive officer of San Francisco-based Uber, said in a blog post that the TLC “overcame its own reticence and overwhelmingly passed a plan to bring the nation’s largest taxi market into the 21st century.” The company’s product had been used in 100 cabs in an experiment that the TLC ended Oct. 16.
The technology companies make money through advertising, or by charging passengers for using the service or for downloading the app, Fromberg said.
Limousine companies were represented at the hearing by the Black Car Fund and the Livery Roundtable.
“The TLC didn’t have the votes needed to pass a bad rule, so now it’s just a bad pilot that was approved without the disclosure of any substantive details,” Avik Kabessa, chief executive of Carmel Car & Limousine Service and a member of the roundtable board, said in an e-mail statement.
Bhairavi Desai, executive director of the New York Taxi Workers Alliance, said drivers approved of the vote, particularly because the commission will permit cabbies to decide which, if any, applications to use. That will prevent the technology companies from charging exorbitant commissions on fares, she said.
“For the first time, we will be in the driver’s seat, with no company forcing drivers to use any app,” Desai said. “This will make sure that app companies don’t undercut our wages by charging a fee on an e-hail.”
Commissioner Nora Marino, one of the two who abstained, objected to being asked to rule on a proposal that she hadn’t had an opportunity to study carefully.
“A pilot program sounds great, but like a marriage, a lot of things are a lot easier to get into than to get out of,” she said.
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