In my May 2023 article in Black Car News, I detailed how, on May 3, 2023, the New York City Taxi & Limousine Commission (TLC) approved a pilot program to test whether Street Hail Liveries (SHLs) can be used safely and efficiently. The new SHL pilot program seeks to utilize vehicles that operate as a cross between a livery and a green taxi. The vehicle cannot be green (or yellow). Also, the vehicles will not need to be hacked up because they will not be able to accept street hails.

The new SHL will not look or operate like a green taxi. The new SHL will operate more like a limited FHV. Drivers of the new SHL will only be able to accept dispatches from a licensed base. Also, the new SHL will be limited to accepting dispatches where the trip originates outside the Hail Exclusionary Zone, just like the existing green taxis. This is the traditional domain of the liveries. At the time, I wrote that I didn’t believe adding 2,500 more For-Hire Vehicles (FHVs) was going to help the 397 existing black car bases and the 225 existing livery bases, but such an addition is something… and something is better than nothing.

The real kicker here, or perhaps the folly of the TLC is that the 2,500 licenses they sought to issue were from the out-of-use “green taxi” licenses. The New York Taxi Workers Alliance (NYTWA) recently filed a lawsuit to stop the TLC from rolling out the pilot program that would allow dormant “green taxi” licenses to be used for a new type of unmetered livery vehicle. According to the NYTWA, calling these limited-licensed “street-hail liveries” – but changing how they can be used – is a violation of state law. In other words: A non-hailable SHL is simply not an SHL under controlling state law.

The NYTWA believes that the addition of 2,500 new FHVs to the roads at this juncture will further dilute driver earnings, at a time when trip volume and driver workload have still not fully recovered from the COVID-19 pandemic. Next, the NYTWA also contends that, with the addition of more vehicles, the pilot program will cut into raises drivers received in March, 2023… their first in nearly a decade.

Furthermore, per the complaint filed in court, the NYTWA claims that the NYC Administrative Code and TLC rules require the TLC to take concrete steps to assess the impact of new FHV licenses before issuing further FHV licenses. The NYTWA seeks a Court order annulling and vacating and enjoining implementation of the SHL Pilot Program and a declaratory judgment declaring the SHL Pilot Program arbitrary and capricious.

In its first cause of action, the NYTWA claims that the SHL pilot program violates the NY HAIL Act, which is the 2013 law that created the green taxis and defined how they must operate. In its second cause of action, the NYTWA claims that the failure of the TLC to conduct a review required by the Administrative Code is itself a violation of the law.

In other words, per the NYTAWA, should more FHVs actually be needed to serve the public, origin specific geographic areas, the TLC can only issue such additional licenses after it meets its obligation to review the current number of FHV licenses and state of the industry, prior to making appropriate adjustments pursuant to the procedures set forth in the Administrative Code and the TLC’s own rules.

In its third cause of action, the NYTWA claims that the SHL pilot program is arbitrary and capricious. Thus, the NYTWA seeks a Court order vacating and annulling the challenged pilot program.

The problem with this lawsuit is multifold. First, the Courts have given the TLC and other administrative agencies great latitude to conduct pilot programs so long as they are for limited purposes and limited periods of time. If they are, then the TLC may depart from the requirements established in the TLC’s Rules and the Administrative Code. In this case, the TLC’s SHL Pilot Program is limited in time. It can only last up to 24 months but may be terminated earlier. Also, the pilot is proposed for a limited purpose: that purpose being to test if a new sort of FHV license will provide more availability for trips in the outer boroughs without allowing High Volume Services such as Uber and Lyft to utilize these new FHVs. It will also allow livery bases to have more supply of drivers. This is especially true and needed because the number of livery vehicles has dramatically decreased over the past decade.

The next problem with this lawsuit is that claiming a pilot is arbitrary and capricious is a tough standard to prove. Courts give great deference to administrative agencies like the TLC because they are supposedly the experts who know more about the FHV industry than the Judges who hear these claims. Most Judges do want to interfere with the decisions of the TLC unless the action taken is absolutely unreasonable. Moreover, historically, Judges give even more deference to the TLC regarding pilot programs. The Courts want to give the TLC the ability to innovate and try new things, and a pilot program is the usual way to do so. Accordingly, the lawsuit seems to be dead in the water.

In mid-August 2023, the City of New York filed a brief opposing the relief requested by the NYTWA. As is typical, the City claims that per the NYC City Charter, the TLC’s jurisdiction extends to the development and effectuation of a broad public policy of transportation, including innovation and experimentation in relation to modes of service and manner of operation and for limited purposes may depart from established rules.

The City goes on in its brief to cite the statistics: Out of the 8,341 SHL permits issued, as of November 2022, 3,181 have been surrendered to TLC. Further, based on TLC trip records for May 2023, only 879 unique green taxicabs completed a trip during that month. Moreover, as of mid-August 2023, the TLC has received over 2,400 executed Authorization Agreements for the SHL pilot program. The City went on to state that the NYTWA seeks to prematurely end the SHL Pilot Program based on purely speculative concerns that it would harm their pecuniary interests, or, in the case of the NYTWA, the financial interests of its members. Of course, the City also claimed that they did conduct the review required by the Administrative Code.

As far as the law is concerned, the City cited relevant case law that supports their defense that the Courts may not substitute its own judgment of the evidence for that of the administrative agency but should review the whole record to determine whether there exists a rational basis to support the findings upon which the agency’s determination is predicated. Also, under the law, if the acts of the governmental entity find ample support in the record, its determination is conclusive, and in reviewing a determination that turns on the exercise of discretion, the courts cannot interfere unless there is no rational basis for the exercise of discretion.

On September 8, 2023, the NYTWA filed a reply brief in support of its position, and the case was submitted to the Court for a decision on the same day. The case is assigned to Hon. Nicholas W. Moyne of the New York County Supreme Court. Justice Moyne is the Judge who controls what is known as the “City Part.” The City Part is the Court/Judge that hears all cases involving the City of New York. In my experience, City Part Judges typically give great deference to the City in most cases, not just ones involving the TLC. In a case where deference to an administrative agency is the rule/norm, the NYTWA will have an uphill battle.

No one knows how long Justice Moyne will take to issue a decision. There is no real rule on how long a Justice of the Supreme Court must render a decision. Also, oral arguments are held at the discretion of the Justice assigned to the case. Hopefully, when issued, the decision will be well-written and informative. Whatever the outcome, an informative decision is always preferable as it gives guidance to litigants in future similar cases.

I understand the NYTWA trying to protect the financial interests of its members. But the reality is that more available FHVs are needed in the outer-boroughs. A pilot program is an excellent way to see if the TLC’s experiment will work. Unfortunately, the TLC is not likely to proceed with the SHL pilot until after the court renders a decision.

While there was no application by the NYTWA for a temporary restraining order or an injunction, the fact remains that no matter how small the chance is that the TLC could lose this lawsuit, the TLC is not likely to spend too much time and money and put energy into this pilot until the Court gives it the proverbial green light. In the meantime, the residents of the outer-boroughs who need more available transportation options will have to wait, along with the livery industry that needs the availability of more FHVs in the outer-boroughs to satisfy the demand of those consumers.

Article by Steven J. Shanker, Esq.

Steven J. Shanker, Esq. is General Counsel to the Livery Roundtable, Inc. and the New York Independent Livery Driver Benefit Fund.

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