congestion mitigation commission technical analysis memo on cab policies.pdftwo potential measures...

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Congestion Mitigation Commission Technical Analysis

Congestion Reduction Policies Involving Taxis

prepared for

New York City Economic Development Corporation New York City Department of Transportation

prepared by

Cambridge Systematics, Inc.

technicalmemorandum

technical memorandum

Congestion Mitigation Commission Technical Analysis

Congestion Reduction Policies Involving Taxis

prepared for

New York City Economic Development Corporation New York City Department of Transportation

prepared by

Cambridge Systematics, Inc. 33 East 33rd Street, Suite 804 New York, New York 10016

date

December 10, 2007

Congestion Reduction Policies Involving Taxis Technical memorandum

Cambridge Systematics, Inc. i 7735-111

Table of Contents Executive Summary ........................................................................................................ 1

Current Taxi Operations and Management Practices .............................. 1 Case Studies.................................................................................................... 2 Application to New York City ..................................................................... 2 Conclusions .................................................................................................... 3

1.0 Introduction .........................................................................................................1-1

2.0 Current Status of Taxi and Car Services in New York City........................2-1 2.1 Taxi and Car service Vehicle and Service Types....................................2-1

Medallion Taxicabs.....................................................................................2-1 For-Hire Vehicles ........................................................................................2-2

2.2 Taxi Stands And Other Waiting Areas in New York City ....................2-3 Assessment of Taxi Stands ........................................................................2-4 Black Car Waiting Areas............................................................................2-6

2.3 Relation of Taxi and Transit Fares............................................................2-6

3.0 Case Studies.........................................................................................................3-1 3.1 Review of Taxi Management Policies in United States Cities ..............3-1

4.0 Application to New York City..........................................................................4-2 4.1 Strategy 1, Development of “No Hail Zone” and Taxi Stand

Network .......................................................................................................4-2 Areawide Taxi Stand Mandate Scenario .................................................4-2 Taxi Stand/ “No Hail Zone” Pilot Program Scenario ...........................4-5 Estimated Impact on VMT in the New York City CBD ........................4-6

4.2 Strategy 2, Fare Surcharges .......................................................................4-6 Scenario A, Implementation of an $8 Daily Entry Fee ..........................4-7 Scenario B, Implementation of a $1 or $2 Surcharge for All Trips Made in Manhattan South of 86th Street ..................................................4-8 Estimated Impact on VMT ........................................................................4-9

5.0 Key Findings and Conclusions ........................................................................5-1

6.0 References and Sources of Additional Information ....................................6-1


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List of Tables Table 4.1 Changes in taxi trips and livery car service vehicles in

Manhattan ..................................................................................................4-7


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List of Acronyms CBD – Central Business District (in this case, the area of Manhattan south of 60th Street)

CPZ – Congestion Pricing Zone (the area of Manhattan south of 86th Street)

GPS – Global Positioning System

LBS – Location Based Services

NYCDOT – New York City Department of Transportation

TLC – New York Taxi and Limousine Commission

VMT – Vehicle Miles Traveled

NYPST – New York Passenger Ship Terminal

PABT – Port Authority Bus Terminal


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Executive Summary On any given workday, the Manhattan Central Business District hosts nearly two million workers from around the region, hundreds of thousands of tourists, and several hundred thousand residents. Streets are congested with cars, trucks, buses, taxis, pedestrians, and cyclists. The saturated roadways slow bus service, cause emergency vehicles to lose valuable response time, and contribute to the region’s air pollution problems. Congestion pricing has been proposed to address these issues.

The New York City Department of Transportation estimates that taxis account for 31% of total daily Vehicle Miles Traveled (VMT) in the area south of 86th Street in Manhattan. This document examines potential measures to reduce VMT by targeting taxis and for-hire vehicles (car services, black cars and limousines). Two potential measures include: 1) the increased regulation of taxi cab operations within the borough, and 2) placing a congestion surcharge on taxi and for-hire fares during the peak periods.

Operations management regulations could include the establishment of a much greater number of curbside taxi stands throughout the area of Manhattan south of 86th Street that will effectively eliminate the practice of hailing taxis in that area. Theoretically, the use of taxi stands would limit the amount of “cruising” taxi drivers do in search of passengers and therefore contribute to reducing VMT. Such a policy could also limit congestion and safety hazards caused by taxis stopping in active lanes to pick-up or discharge passengers.

Two fare surcharge scenarios were analyzed: one in which taxi and for-hire drivers would pay an $8 daily fee to enter or travel within the area of Manhattan south of 86th Street, and one in which a $1 or $2 surcharge would be added to taxi and for-hire trips made within or through the area of Manhattan south of 86th Street between the hours of 6:00 AM to 6:00 PM on weekdays.

Current Taxi Operations and Management Practices Currently there are more than 13,000 medallion (yellow) taxi cabs operating in New York City. Additionally, 20,000 to 25,000 car service vehicles, 10,000 black cars and 5,000 luxury limousines – which together are regulated as “for-hire vehicles” – serve the travel needs of many residents and visitors to New York City. While for-hire vehicles are typically reserved in advance via telephone, passengers can hire a medallion cab on-the-spot by hailing one on the street or by visiting a taxi stand. An unofficial inventory of taxi stands in New York City reports that there are 83 taxi stands and taxi relief areas in the area of Manhattan south of 96th Street.

Taxi stands in New York City are located in areas where there is concentrated demand for taxis. These areas include transit hubs, entertainment venues, and


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hotels. Busy stands are often staffed with a dispatcher to ensure the stand operates in an efficient and orderly manner.

Case Studies There are few, if any, cities that are directly comparable to New York with respect to taxicab operations and utilization. Most larger U.S. cities (e.g., San Francisco1, Chicago2) do not expressly prohibit taxicab cruising, but do require that all licensed taxicabs be equipped with a two-way radio and belong to a company or association with a centralized dispatching facility. Washington, DC,3 taxicab regulations explicitly permit cruising, and do not require taxicabs to be equipped with a two-way radio or belong to a radio dispatching service.

Application to New York City Two types of management policies are considered as alternatives that could be applied in New York City. The first policy would include the establishment of “No Hailing Zones” wherein taxi customers would be prohibited from hailing taxis and directed to taxi stands to procure service. Because it is difficult to estimate the effect of a No Hailing Zone policy on taxi VMT, a pilot program that would affect a smaller area of Manhattan could be a desirable alternative. The pilot program would allow City officials, the public, and the taxi industry to observe how the No Hailing Zone operates with respect to passenger and driver compliance, changes to taxi VMT and passenger waiting time. If the data shows that the pilot program is meeting the City’s goals, No Hailing Zones could be expanded or introduced elsewhere in Manhattan.

Taxi fare policies are the second set of alternatives considered in this analysis. The first scenario proposes that taxi and for-hire drivers would be responsible for paying a daily $8 fee to enter or travel within the area of Manhattan south of 86th Street, with pass through to the fare. Based on an average of 30 trips completed per shift, each fare would have a $0.27 surcharge added. The second scenario proposes a $1 or $2 surcharge added to every trip that has an end point or travels

1“Taxicab/Rampted Taxi Rules and Regulations,” San Francisco Taxicab Commission,

available from http://www.sfgov.org/site/taxicommission_index.asp?id=37437 (accessed November 9, 2007).

2“Rules and Regulations for Taxicab Medallion License Holders, City of Chicago, Department of Consumer Services, available from http://egov.cityofchicago.org/webportal/COCWebPortal/COC_ATTACH/TaxicabMedallionLicenseHolder.4.14.06_2final[1].pdf (accessed November 9, 2007).

3D.C. Municipal Regulations – Title 31, District of Columbia Taxicab Commission, available from http://dctaxi.dc.gov/dctaxi/cwp/view,a,1187,q,487959, taxiNav, |30625|.asp (accessed November 9, 2007).


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through the area of Manhattan south of 86th Street. These policies could affect taxi demand and hence taxi travel behavior.

Conclusions While there are lessons to be learned from the case studies, there is a general lack of quantitative data that shows the effects on VMT, congestion, and safety attributable to taxi management policies including No Hail Zones or pricing. The most relevant data points came from within the New York City experience with these industries.

Strategy 1, No Hail Zone and Taxi Stand Network For the operations management approaches, the implementation of a No Hailing Zone in the busiest districts of Manhattan offers the potential to limit taxi cruising, reduce taxi VMT, and improve congestion and public safety. The measure is unproven, however, as currently empirical evidence to support the claim is absent. The initiation of a pilot program in one small area could provide the City with an opportunity to observe how such a policy would operate in New York City and allow officials to determine whether or not such a policy is desirable for larger areas of Manhattan.

With or without a No Hailing Zone, taxi stands provide an important service in many areas of the city, assisting passengers in securing a taxi ride, where hailing a cab could be unsafe or difficult due to competition. Taxi stands in the City should be developed in such a manner that they are easy to identify, provide amenities that heighten passengers’ sense of comfort and safety, and, where possible, offer the services of an on-site dispatcher to ensure that the taxi stand operates in an efficient and orderly manner. Key findings include:

• There is no evidence that eliminating taxi hailing would reduce VMT. The degree to which VMT is reduced would depend upon how far taxis would travel back to a taxi stand after discharging a passenger. While the proposed scenario includes taxi stands that are located no more than a few blocks away from any given point within the specified area of Manhattan, a driver may have to travel past several taxi stands to find an available space in a stand queue. Furthermore, taxi drivers may opt to drive a longer distance to one of the more heavily utilized stands, or to stands that typically house customers traveling longer distances (resulting in higher fares).

• Taxi stand implementation would be challenging with respect to traffic operations. Taxi stands operate most effectively when they have highly visible signage and other identifiers, have adequate space for queuing vehicles and waiting customers, offer passengers assurance that vehicles will be present and ready to receive passengers, are located in a safe and well-lit area with shelter from the elements, and have an attendant available to insure that the stand operates in an efficient and orderly manner. Securing adequate curb and sidewalk space for taxi and customer queues may reduce


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curbside parking capacity and require the relocation of bus stops. Working around infrastructure such as fire hydrants also poses a challenge. At particularly busy locations, taxi queuing space would have to be long enough so that taxis waiting in queue would not block lanes, intersections or interfere with bus operations.

• Taxi stand implementation would be challenging with respect to enforcement. Hailing taxis is a part of the longstanding culture in New York City. A significant outreach effort would be required to teach the drivers and the traveling public to change their behavior. Other costs such as stand attendants and police enforcement activities must be considered as well.

Strategy 2, Fare Surcharge Another possible way to reduce taxi VMT is to increase the fares that passengers pay during peak travel periods. Two fare surcharge scenarios are presented. The first scenario proposes a scheme in which taxi and for-hire vehicle drivers would be responsible for paying the proposed $8 fee to enter the area of Manhattan south of 86th Street, with the fee being passed along to taxi customers in the form of a nominally higher fare. The second scenario proposes a $1 or $2 surcharge added to taxi and for-hire trips made within or through the area of Manhattan south of 86th Street between the hours of 6:00 AM to 6:00 PM on weekdays. Using reasonable fare elasticities, the effect of the proposed fare increases on taxi and for-hire ridership, and hence, VMT, is discussed.

An increase in taxi fares is likely to reduce customer demand for cab service, but is unlikely to reduce taxi VMT since the number of cabs is fixed by law. A reduction in taxi trips would increase the availability of cabs, however, and likely lead to some customers who currently take car services or black cars taking medallion cabs instead. Based on an analysis of historical trends, total VMT in the charging zone is expected to be reduced as follows by each fare surcharge option:

• Reduction in total VMT of up to 0.1 percent from the application of the $8 daily fee to all taxis and for-hire vehicles.

• Reduction in total VMT of 0.3 percent from the application of a $1 per trip surcharge to taxi and for-hire vehicle trips in the charging zone.

• Reduction in total VMT of 0.6 percent from the application of a $2 per trip surcharge to taxi and for-hire vehicle trips in the charging zone.


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1.0 Introduction On any given workday, the Manhattan Central Business District hosts nearly two million workers from around the region, hundreds of thousands of tourists, and several hundred thousand residents. Streets are congested with cars, buses, taxis, pedestrians, and cyclists. The saturated roadways slow bus service, cause emergency vehicles to lose valuable response time, and contribute to the region’s air pollution problems.

According to Texas Transportation Institute’s Urban Mobility Report, New York City ranks second in the nation in terms of annual delay. The majority of the delay is spent during the peak hour, with travelers experiencing 46 hours of annual delay (per traveler) in 2005, up from 34 hours in 2000, a 35 percent increase. This congestion costs the City and its residents over $7 billion in 2005, costing each peak traveler approximately $888.

By 2030, nearly a million more residents, 750,000 more jobs, and millions more visitors are expected to further strain the City’s transportation system. The current system cannot handle the anticipated increase in traffic and meaningful infrastructure-based solutions are challenging, costly, and lengthy to implement. A comprehensive and innovative set of strategies must be implemented to make a profound change in travel behavior.

The New York City Department of Transportation estimates that taxis account for 31% of total daily Vehicle Miles Traveled (VMT) in the area south of 86th Street in Manhattan. This document examines potential measures to reduce VMT by targeting taxis. Two potential measures include: 1) the increased regulation of taxi cab operations within the borough, and 2) placing a congestion surcharge on taxi fares during the peak periods.

This document examines the implementation considerations and potential impacts of these two strategies. The analysis is organized into the following six sections:

• Section 1.0 presents a definition of the problem at hand;

• Section 2.0 examines the existing taxi and for-hire services available in Manhattan and their operating characteristics;

• Section 3.0 examines how New York differs from other American cities in regard to taxi management,;

• Section 4.0 discusses potential taxi management strategies that could be implemented in New York City.

• Section 5.0 summarizes key findings from this study; and

• Section 6.0 lists works cited in this study and identifies sources of additional relevant information.



2.0 Current Status of Taxi and Car Services in New York City Taxis and for-hire vehicles play an important role in the daily lives of residents, commuters, and visitors to New York City. There are four basic types of vehicles that are licensed by the New York City Taxi and Limousine Commission (TLC): medallion taxicabs, car services, black cars, and luxury limousines. These are described below. The operational characteristics of each vehicle type are described in this section and followed by a discussion of practices that are currently in place to manage taxi and car service licensing and operations.

2.1 TAXI AND CAR SERVICE VEHICLE AND SERVICE TYPES Medallion Taxicabs One of the signature sights in New York City is the “yellow cab” also known as medallion taxicabs. There are just over 13,000 yellow medallion cabs circulating the streets of New York City – with trips concentrated within Manhattan below 86th Street. (Outside of Manhattan, LaGuardia and JFK Airports – and to a lesser extent Downtown Brooklyn – are the only other major areas in New York City where yellow medallion taxis provide intensive service. Over 80 percent of taxi trip origins occur in Manhattan below 86th Street. Yellow cabs are the only form of taxi in NYC permitted to cruise for or be hailed by potential customers. According to a 2005 estimate, medallion taxis carry about 25% of all paying passengers traveling by taxi, for-hire vehicles, bus, and subway

A woman observed hailing a taxi on 6th Avenue in Midtown.


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within Manhattan.4 It should be noted that the average taxi fare is low in comparison to the average transit fare, based on historical data.

For-Hire Vehicles In addition to the familiar yellow cabs, New York City is home to other for-hire vehicle services, also licensed by the TLC. These include the following:

• Car services– There are an estimated 20,000 – 25,000 licensed car service vehicles operating from one of several hundred car services in New York City.5 Most of these operate outside Manhattan or above 86th Street. Nearly all car service car passengers call in to the car service and are picked up at their origin by a vehicle that has been assigned to that person via radio contact from the home base. (Passengers can also be picked up at a particular car service’s base of operations, which is a rare occurrence except for those services whose bases are located near transit hubs.) These car service vehicles are prohibited from cruising for and picking up hailing passengers, though a substantial amount of this activity does occur, especially in busy areas outside of the Manhattan core (e.g., Downtown Flushing, Central Harlem, etc.)

• Black cars – These vehicles serve a significant number of passengers who have an origin or destination within Manhattan below 86th Street. There are an estimated 10,000 black cars (operated by around 70 different services) and another 5,000 luxury limousines. Black car services began in the 1980s, when the TLC prohibited medallion taxicabs from conducting radio pick-up

service. Their numbers grew rapidly over that decade, but have remained relatively steady in the 10,000 – 11,000 vehicle range since the year 2000.

• Luxury limousines – Luxury limousine services grew rapidly in the 1990s, experiencing slower but significant growth since the year 2000.) These cars are dispatched and the customer must call in advance to utilize these services. Many businesses in Manhattan contract with black car services to

4Schaller Consulting, New York City Taxicab Fact Book, 2006; Samara Epstein, Director of

Constituent Affairs, New York City Taxi and Limousine Commission. Interview by authors. Personal interview via telephone. New York, NY. 2 November 2007. .

5 Samara Epstein.

The Lincoln Town Car is the standard model used by “black car” limousine services. Photograph source: http://www.hyslivery.com



transport employees and clients/customers. These vehicles are prohibited from cruising and picking up hailing passengers, but anecdotal evidence indicates that street hails occur in Manhattan below 86th Street, especially at times and locations when medallion taxis are hard to find. 6

2.2 TAXI STANDS AND OTHER WAITING AREAS IN NEW YORK CITY In addition to cruising and hailing, yellow cabs can pick up fares at one of many designated taxi stands existing in New York City. There is no official estimate of the number of existing taxi stands in New York, though TLC is currently conducting an inventory. One unofficial count7 indicates that there are 83 taxi stands and taxi relief areas located in Manhattan below 96th Street.

There are two types of stands, as defined by the New York City Department of Transportation (NYCDOT), which manages curb frontage in the city:

• A taxi stand is a pickup point for passengers. Taxi drivers are required to remain with their vehicles and be available to pick up fares.

• Taxi relief stands provide designated curb space for yellow taxicab drivers to park their vehicles for up to one hour. Despite uncertainty over the precise number of stands in existence today or in the past, it is believed that the number of taxi relief stands in Manhattan has been reduced significantly in recent years.8

A few taxi stands are operated by a dispatcher (sometimes provided by one of the city’s Business Improvement Districts), and can be found at major transportation hubs such as Penn Station, Grand Central Terminal, and hotels. 6 Samara Epstein. 7“NYC Taxi World,” available from http://www.phunreport.com/taxi/stands.htm

(accessed November 9, 2007). 8Nancy Wright, Coordinator of the Taxi Stand Reporting Program, New York City

Department of Transportation, Interview by authors. Personal interview via telephone. New York, NY. 2 November 2007

Customers wait in queue at the taxi stand on 7th Avenue outside Pennsylvania Station.



Most, however, are unstaffed and are located at major office buildings, hotels, and hospitals. According to the unofficial website list identified above, more than half of Manhattan’s taxi stands are located between 34th and 59th Streets. The following paragraphs outline some examples where taxi stands are being used in Manhattan and provide insight into some of issues surrounding these taxi stands and waiting areas for other for-hire vehicles.

Assessment of Taxi Stands The following are some observations about taxis stands in Manhattan.9

• The most heavily utilized taxi stands are adjacent to major trip generators: transportation terminals, hotels, and on a more limited time of day basis, near major entertainment sites, such as theaters.

• The presence of a dispatcher, especially a dispatcher who vigorously defends the curb space for taxis and maintains the integrity of the passenger waiting line, contributes to the efficient operation of a taxi stand.

• Taxi stands are easy to find and use when they are well signed and have a noticeable dispatch stand (often provided and staffed by a Business Improvement District).

• Even staffed taxi stands face enforcement problems, particularly when there is significant competition for use of the curb space (by delivery vehicles and even police vehicles).

• Many non-staffed taxi stands are underutilized for a variety of reasons: little or no enforcement of curb space, poor signage, and absence of significant traffic generators.

Times Square and the Theater District In an effort to help reduce congestion and improve safety, the NYC Department of City Planning, in conjunction with NYCDOT and TLC, conducted a study in 2000 – 2001 which assessed the effectiveness of taxi stands in the Times Square and the Theater District area. This study identified 28 taxi stands in the area bounded by 6th and 8th Avenues from West 38th Street to West 53rd Street. The study found that many of these taxi stands were located near office buildings, commercial businesses, hotels, and theaters. The study found that at some of the most active taxi stands, and at certain times of the day, the customers’ average waiting time was far shorter than the drivers’ average cruising times between fares. However, except for stands nearest hotels and a few others that are busy in the late evening hours, most of the these stands were found to serve fewer than

9Taxi Stands in Times Square and the Theater District. New York City Department of

Planning and New York City Department of Transportation, 2001; Nancy Wright..



20 taxi movements per hour during each of three observed travel periods (morning peak, midday peak, and evening peak).10

The study made several recommendations to increase the visibility and utilization of taxi stands in the Times Square and Theater District area. One recommendation, which was implemented, reduced the number of taxi stands from 28 to 23. At some of the remaining stands, new signage and illuminated globes were installed. In addition, the study recommended converting three of the stands from non-staffed stands to staffed stands.

Port Authority Bus Terminal The same study cited above examined the two dispatcher-staffed taxi stands at the Port Authority Bus Terminal (PABT) along 8th Avenue. One of its key findings applies to most staffed taxi stands in Manhattan. The most important element of their success is the dispatcher, who makes sure that only yellow medallion taxicabs are using the curb space and helps moves taxis through the stands. However, it was noted that there was little coordination between the dispatchers at the two stands, resulting in a periodic mismatch between passengers and vehicles. The study concluded that better communication was needed between the two stands, that adequate sidewalk space be maintained for queuing passengers, and that dispatchers were crucial to the continued success of these taxi stands.

New York Passenger Ship Terminal In 2004, weekend service taxi stands were established at the New York Passenger Ship Terminal (NYPST). The goal of implementing the weekend service was to reduce the number of vehicles traveling into the terminal. Medallion taxicab drivers were actively encouraged to use these stands to drop off and pick up passengers traveling to and from the NYPST. Attendants were stationed at the stands, assisted by the New York City Police Department, to ensure that only licensed medallion taxicabs used these designated stands. Signs indicating the schedules and the locations of these areas were also installed.

Penn Station Penn Station has taxi stands on both 7th and 8th Avenues, both of which are staffed with dispatchers for significant times of the day (provided by the 34th Street Business Improvement District). As at the PABT, the dispatchers are crucial to the success of these stands. They aggressively protect the curb space and at times patrol the passenger waiting lines to prevent out-of-turn hailing. At the 8th Avenue stand, maintaining a clear curb space is often difficult, as the lane is often used by non-taxi vehicles, including police vehicles. Another issue with

10Taxi Stands in Times Square and the Theater District.



both stands is that long passenger waiting lines sometimes induce riders to walk upstream several blocks to hail a taxi that hasn’t yet entered the taxi stand line. This reduces the supply of taxis, further exacerbates passenger waiting, and undermines the attractiveness of the stand.

Current Process for Creating New Taxi Stands Stakeholder requests for new taxi stands are made to NYCDOT. Once a request is made there are numerous criteria and factors NYCDOT reviews, such as: curb utilization, traffic flow, current parking usage (commercial, residential, etc.), and bus lane impacts. Potential actions include installing a new taxi stand, moving the location of an existing stand, or removing the stand all together. The sources of requests include: individuals, block associations, community boards, and Business Improvement Districts.

Black Car Waiting Areas Black cars add to traffic congestion in Manhattan, while in motion and while waiting for passengers. Designated waiting areas exist, but where these are inadequate to serve demand, black car/limousine drivers often double or triple park as they await their pick up at a hotel or office building, or circle blocks until their scheduled pick-up time.

2.3 RELATION OF TAXI AND TRANSIT FARES Taxi fares are historically low in relation to transit fares. For example, from 1956 to 1974, the ratio of an average taxi fare to an average transit fare was 6.9. The ratio declined in the 1970s and early 1980s, at the same time that the condition of the transit system deteriorated. In 2006 the ratio was 5.8, based on an average taxi base fare of $9.61 and the six-for-five bonus transit fare of $1.67. To match the previous average 6.9 ratio, taxi fares would have to increase by about $2.

A sign designating a waiting area for taxis and other for-hire vehicles on East 31st Street.

Congestion Pricing Commission Technical Analysis Technical Memorandum


3.0 Case Studies There are few cities that provide relevant examples of regulations on taxi operations, especially in the U.S. While the practice of hailing a taxi is not as common in other cities as in New York, it is permitted in cities such as Washington, DC; Philadelphia; Miami; Chicago; and San Francisco. Taxi stands at major demand generators and reservations by phone are other popular methods of finding a taxi in those cities.

3.1 REVIEW OF TAXI MANAGEMENT POLICIES IN UNITED STATES CITIES There are few, if any, cities that are directly comparable to New York with respect to taxicab operations and utilization. Most larger U.S. cities (e.g., San Francisco11, Chicago12) do not expressly prohibit taxicab cruising, but do require that all licensed taxicabs be equipped with a two-way radio and belong to a company or association with a centralized dispatching facility. One exception is Washington, DC,13 whose taxicab regulations explicitly permit cruising, and do not require taxicabs to be equipped with a two-way radio or belong to a radio dispatching service.

New York14 is unique among larger U.S. cities in having two distinct classes of taxicabs – medallion taxis, whose primary business is via street hail and taxi stands; and car service or for-hire vehicles, who are prohibited from picking up street hail and taxi stand customers, and rely exclusively on telephone call-in and radio dispatch.

11“Taxicab/Rampted Taxi Rules and Regulations,” San Francisco Taxicab Commission,

available from http://www.sfgov.org/site/taxicommission_index.asp?id=37437 (accessed November 9, 2007).

12“Rules and Regulations for Taxicab Medallion License Holders, City of Chicago, Department of Consumer Services, available from http://egov.cityofchicago.org/webportal/COCWebPortal/COC_ATTACH/TaxicabMedallionLicenseHolder.4.14.06_2final[1].pdf (accessed November 9, 2007).

13D.C. Municipal Regulations – Title 31, District of Columbia Taxicab Commission, available from http://dctaxi.dc.gov/dctaxi/cwp/view,a,1187,q,487959, taxiNav, |30625|.asp (accessed November 9, 2007).

14“TLC Rules and Local Laws,” New York City Taxi and Limousine Commission, available from http://www.nyc.gov/html/tlc/html/rules/rules.shtml (accessed November 9, 2007).



4.0 Application to New York City Strategies to better manage taxi operations within Manhattan south of 86th Street could result in congestion and vehicle miles traveled (VMT) reductions. According to global positioning system (GPS) tracking data retrieved from a sample population of taxis operating within this area of Manhattan, about 30 percent of taxi VMT in Midtown Manhattan in the midday period is accumulated while the vehicle is out of revenue service, e.g., while the driver is cruising in search of passengers to pick up, or making other non-revenue movements such as stopping to eat or return to a fleet garage.

Some strategies that could result in a reduction in taxi VMT include the introduction and widespread use of a greater number of taxi stands in combination with “No Hail Zones” and increasing fares through surcharges. Each strategy offers differing sets of benefits and implementation challenges. These strategies, though presented separately, could be implemented together as a package of regulations.

4.1 STRATEGY 1, DEVELOPMENT OF “NO HAIL ZONE” AND TAXI STAND NETWORK One means of managing taxi operation is to restrict the practice of picking up passengers who hail taxis at random streetside locations, and requiring that passengers be picked up at designated taxi stands instead. A network of taxi stands would be installed at frequent intervals to ensure passenger convenience. Such a restriction would be crafted with the aim of limiting the amount of VMT attributable to taxi cruising and improve safety by limiting the number of in-street stops vehicles make to pick up and discharge passengers.

This strategy is presented in two scenarios. The first scenario discusses the establishment of a “No Hail Zone” and supporting taxi stand network throughout the entire area of Manhattan south of 86th Street. The second scenario presents a pilot program concept that would act as the first part of a phase-in of No Hail Zones in Manhattan.

Areawide Taxi Stand Mandate Scenario This areawide scenario involves the establishment of taxi stands at major trip generators such as transit hubs, large entertainment venues, and hotels at intervals of one for every 500 to 900 feet of street length. The distance of 900 feet is equivalent to one “long block” between avenues on the west side of Manhattan (including the street width of one avenue), while 500 feet is approximately the distance between shorter east-west blocks on the East Side (such as between Fifth



Avenue and Madison Avenue). This distance range is also equivalent to approximately two to four “short blocks” between streets in most of Manhattan. This spacing would result in a network of 1,000 to 1,200 taxi stands throughout the area of Manhattan south of 86th Street.

In this scenario, taxi drivers would be required to make passenger pickups at designated taxi stands while operating in Manhattan south of 86th Street. The practice of hailing a taxi at random streetside locations in this area would be, at least by regulation, prohibited.

The amenities at taxi stands in the area would vary based upon the level of demand at each location. The busiest taxi stands would require visible and recognizable, uniform signage, sufficient street space to accommodate the taxi queue, sidewalk space for the passengers queue, and a stand attendant who will ensure that the stand operates in an efficient and orderly manner. Additional amenities could include variable message signs that could inform passengers of expected wait times for boarding and covered waiting areas to protect waiting passengers from weather elements. Taxi stands in areas where there is less demand would require smaller street and sidewalk queuing spaces, and would not require the services of an attendant. All taxi stands should be in areas that are well-lit so that customers feel safe walking to and waiting at the stand.

The implementation of taxi stands would likely reduce taxicab cruising if customers perceive a benefit to using taxi stands and comply with the regulation. Based on past experience, this is most likely to occur if the taxi stands are near major trip generators, if they are adequately staffed and easily recognizable, and if riders perceive that waiting in line is more beneficial than trying to hail a taxi. The benefits perceived by riders would largely be time savings, but could include such concerns as improved safety, passenger amenities, and a less stressful experience. Innovations that could increase the perception of benefits among riders, and which would likely increase taxi stand usage, might include such actions as:

• Fare or surcharge discounts offered to riders who use taxi stands vs. hailing taxis.

• Information about projected waiting times at taxi stands (e.g., variable message signs that indicate average waiting times).

• Covered waiting areas for riders, offering some protection from the elements.

The degree to which VMT is reduced would depend upon how far taxis would have to travel back to a taxi stand after discharging a passenger. While taxi stands would be located no more than a few blocks away from any given point within the specified area of Manhattan, a driver may have to travel past one, two, or several taxi stands to find an available space in a stand queue, especially during hours when taxi demand is lightest, such as the early morning hours on weekdays. Furthermore, taxi drivers may opt to drive a longer distance to one of



the more heavily utilized stands, or to stands that typically house customers traveling longer distances (resulting in higher fares).

In order to ensure widespread compliance with the regulation, significant enforcement protocols would be needed for both the passenger and the driver. As such, significant costs would be borne for enforcement. Passenger behaviors would have to be monitored to ensure that prospective passengers do not hail or attempt to board a taxi that is stopped to discharge passengers. Driver behaviors would have to be monitored to ensure that drivers do not accept passengers who attempt to board at inappropriate locations, and to ensure that any fee or surcharge discount is not offered to customers who are not eligible. While law enforcement officials would take on the responsibility of enforcing taxi regulations, the vigorous enforcement in the immediate vicinity of taxi stands by vigilant stand attendants and dispatchers might be an acceptable choice as well.

There are issues and concerns, in addition to the enforcement issues, that would have to be addressed. Among these are the potential effects the numerous taxi stands would have on traffic operations, parking, transit operations, and air quality. Because taxi stands require dedicated street space for passenger loading and taxi queuing, a portion of a street lane would have to be taken out of service at each taxi stand. The amount of space affected could range from several car-lengths (roughly 50 feet) to several hundred feet at the busiest taxi stand locations. The taxi stand on 8th Avenue at the Port Authority Bus Terminal, for example, requires the dedication of more than 450 feet of curb space for taxi queuing and passenger boarding. In many areas the affected lane currently accommodates on-street truck delivery zones and/or bus stops. Provisions would have to be made to accommodate truck deliveries and bus stops elsewhere if taxi stands remove these amenities. In areas where the affected lane is a live traffic lane, the loss of the lane may adversely affect traffic operations and result in congestion.



Despite the aforementioned concerns, there are potential congestion and safety benefits associated with taxi stands. The establishment of formal taxi stands would limit the practice of stopping in live traffic lanes to pick up passengers who are hailing taxis from the curb. With fewer vehicles stopping in live traffic lanes, roadway throughput is not compromised, and hasty lane-changing by vehicles attempting to pass from behind a stopped taxi would decrease. Stops made in protected taxi stand areas allow passengers to board in areas that are safer than live traffic lanes.

Taxi Stand/ “No Hail Zone” Pilot Program Scenario Because the challenges of implementing an areawide taxi stand requirement is logistically and financially difficult, a more appealing alternative might be to incrementally introduce the program by beginning with a pilot program in a small area of Manhattan. The pilot program would require that taxi pickups made within a specified area occur at taxi stands only. Hailing would be prohibited in this area. The pilot area should be small initially, consisting of only several blocks. The pilot area should be located in an area that experiences particularly heavy taxi demand, such as the area surrounding Penn Station or Grand Central Terminal. For Penn Station, the initial zone could include the area between 6th and 8th Avenues and 30th to 35th Streets. For Grand Central Terminal, the zone could include Madison Avenue to Lexington Avenue between 40th and 45th Streets. The No Hail Zone restriction would be in effect during the midday hours, between 10:00 AM and 4:00 PM. The midday hours, though not the only busy time of day for taxis in Manhattan, is when taxi demand is most concentrated in the core of the Midtown business district. Though evening hours are also a period of high taxi demand, that demand is more scattered geographically among entertainment, dining and nightlife venues, and residential neighborhoods.

The pilot program would allow City officials, the public, and the taxi industry to observe how the No Hail Zone operates with respect to passenger and driver compliance, changes to taxi VMT, and passenger waiting time. Data retrieved from taxi GPS units, and driver and passenger outreach initiatives such as surveys or open house information sessions are potential tools that could be used

Hopeful taxi passengers discuss their desired trip with a taxi driver before boarding. The taxi is occupying a live traffic lane on Madison Avenue.



to determine the degree of acceptability and effectiveness of the No Hail Zone program. If the analysis of the data and additional information is deemed beneficial, the No Hail Zone could be expanded to include larger areas of Manhattan. This incremental process would allow the public and taxi industry an opportunity to become accustomed to the policy, and allow for the costs (i.e., enforcement, developing and operating taxi stands, community outreach programs, etc.) to be distributed over a longer period of time.

Estimated Impact on VMT in the New York City CBD There is no data to support a quantitative analysis of either scenario under Strategy 1. Qualitatively, the proposed alternatives could be expected to reduce taxi cruising VMT if taxi drivers make a good faith effort to return to a nearby taxi stand after discharging a passenger. If, however, the driver has to make a long trip to reach a taxi stand, or has to pass one, two, or more taxi stands before finding an available space in queue, the VMT reduction could be limited.

4.2 STRATEGY 2, FARE SURCHARGES Another possible way to reduce taxi VMT is to increase the taxi fare that passengers pay during peak travel periods. Two fare surcharge scenarios are presented. The first scenario proposes a scheme in which taxi drivers would be responsible for paying the proposed $8 fee to enter the area of Manhattan south of 86th Street, with the fee being passed along to taxi customers in the form of a nominally higher fare. The second scenario proposes a $1 or $2 surcharge added to every taxi trip made within or through the area of Manhattan south of 86th Street between the hours of 6:00 AM to 6:00 PM on weekdays. Using reasonable fare elasticities, the effect of the proposed fare increases on taxi ridership and the for-hire vehicle sector, and hence, VMT, is discussed.

The analyses of these scenarios require an understanding of taxi elasticity in New York City as it relates to cost. When prices for a commodity like taxi travel rise, the demand will decrease. Typically, with travel demand models, an elasticity of -0.1 to -0.3 is associated with changes in cost for travel. An elasticity in this range represents a hypothesis that a 10 percent increase in travel fare would result in a 1 percent to 3 percent reduction in travel. Studies have found that in New York City, the taxi fare elasticity is -0.22.15 A 10 percent increase in the taxi fare in New York City is thus expected to reduce taxi trips by about 2.2 percent.

Changes in the demand for taxi service in Manhattan may also affect the black car and car service industry segments. When customers find it marginally more difficult to hail a medallion cab, some may elect to use a black car or livery car

15 Bruce Schaller, “Elasticities for taxicab fares and service availability,” Transportation, 26:

283-297, 1999.



service instead. Indeed, the history of these industries is that they arose because of a lack of medallion cab service.

In recent years, the number of car services in particular has fluctuated in response to demand for for-hire services in Manhattan. When customer demand has risen rapidly, as in the mid to late-1990s, the number of medallion cab trips increased as did the number of car service vehicles. Conversely, when customer demand dropped in the early 2000s, the number of livery vehicles declined along with the number of taxi trips. Table 4.1 shows these trends.16

Notably, changes in the number of car service vehicles are several times the magnitude of changes in taxi trips. This effect is attributable to the fact that the number of cabs is regulated and has grown only slowly over this time period, while the number of car service cars is unregulated. The car services thus absorbs a disproportionate share of changes in overall customer demand, expanding more rapidly than taxi trips in times of economic expansion and contracting more rapidly in bad economic times.

Table 4.1 Changes in taxi trips and livery car service vehicles in Manhattan 1992-2000 2000-2002 2002-2004

Change in taxi trips +21% -3% +1%

Change in number of car service vehicles in Manhattan +85% -16% -8%

Scenario A, Implementation of an $8 Daily Entry Fee The first proposed fare increase scenario calls for the application of a daily $8 entry fee to taxis and for-hire vehicles (inclusive of car services, black cars and limousines) traveling into or within the area of Manhattan south of 86th Street. Drivers would not be charged additional fees for multiple trips into or within the area.

In this scenario, the City would add a surcharge to medallion cab fares to cover the congestion fee. On average, taxi drivers complete 30 fare trips per shift.17 With the $8 fee divided among the 30 trips, each trip surcharge would increase by 27 cents. When added to the average taxi fare paid in New York City

16 The decline in the number of livery car services from 2002 to 2004 was attributed to

increased vehicle liability insurance costs rather than changes in customer demand. 17 Schaller Consulting, New York City Taxicab Fact Book, 2006.



($9.94)18, the surcharge would represent a 2.7 percent increase in total fare paid by each passenger. Applying an elasticity of -0.22, it can be expected that the total number of daily taxi trips served would initially decline by 1,100 daily trips in response to the surcharge. This represents a 0.2 percent decline in daily taxi trips.

A reduction in taxi trips would increase the availability of cabs and likely lead to some customers who currently take car services or black cars taking medallion cabs instead. Based on an analysis of trends shown in Table 4.1, it can be estimated that one-third of the reduction in taxi demand would be offset by customers switching from for-hires to taxis. Based on an average taxi trip length of about 2.5 miles in the charging area and car services having about 40 percent of their total mileage being paid miles (with passengers), the projected VMT reduction in the charging zone would be 2,300 miles per day.

For-hire vehicle fares are unregulated and each operator would decide how to adjust its fares to cover the congestion fee. Based on a straight pass-through of the fee and estimated fare elasticities for each type of for-hire vehicle,19 the $8 fee would translate into a VMT reduction in the charging zone for for-hire vehicles of 3,900 miles per day. Combined with the 2,300 mile reduction in VMT from reduced taxi demand, application of the $8 fee to taxis and for-hire vehicles yields a 0.1 percent reduction in total VMT in the area below 86th Street.

It is important to consider that the $8 fee will be paid only if it is not offset by bridge or tunnel tolls. A substantial proportion of taxis and for-hire vehicles pay $8 or more in tolls on any given day. If adjustments to the fare change were made to account for this, the effect on taxi trip volumes would be reduced commensurately.

Scenario B, Implementation of a $1 or $2 Surcharge for All Trips Made in Manhattan South of 86th Street The second proposed scenario calls for the application of a $1 or $2 surcharge to taxi, black car, car service and limousine trips in the area of Manhattan south of 86th Street. As with the $8 daily fee, a surcharge would be passed on to taxi riders through the regulated fare. For-hire operators could pass along the cost to their riders as well.

It is anticipated that the surcharge would be applied based on GPS readings in the cabs for alls trips that begin, end or travel within the charging area. The

18 Schaller Consulting, New York City Taxicab Fact Book, 2006. 19 The elasticity for car services is assumed to be -0.22, the same as for taxis, and

somewhat lower for black cars (-0.10) and limousines (-0.05). These assumptions produce a conservative result for total VMT reductions; if the elasticities were higher, VMT reductions would be larger.



revenues could be collected through a flat annual fee for medallion cabs and for for-hire vehicles that are based or do most of their business in the charging area. For-hire vehicles based outside the charging zone could pay a $1 or $2 per trip fee for entering or exiting the charging area if the fee is administered as part of a congestion pricing scheme.

For medallion taxis, the surcharge represents a 10 percent or 20 percent increase in taxi fare above the $9.94 average fare paid in New York City,20 which includes existing surcharges. Applying a -0.22 elasticity, the number of taxi trips completed in the area can be expected to fall by 4,300 to 8,500 trips. This decrease represents a 0.9 to 1.8 percent decline in taxi trips served in the study area. Assuming that some for-hire customers switch to medallion cabs, the projected VMT reduction in the charging zone would be 8,800 miles for a $1 surcharge and 17,600 miles for a $2 surcharge

Assuming that for-hire operators pass through the surcharge to customers, a $1 per trip surcharge would result in a VMT reduction among for-hire vehicles in the charging zone of 5,000 miles per day; for a $2 surcharge the VMT reduction would be 10,100 miles daily. Combining the direct effect of the surcharge on for-hire fares with the indirect impact of the taxi surcharge, a $1 fee is projected to reduce total VMT in the area below 86th Street by 0.3 percent while a $2 fee would reduce VMT by 0.6 percent.

Estimated Impact on VMT Table 4.2 shows a comparison of the fare increase scenarios. A pass-through of an $8 per day congestion fee would, at most, reduce VMT by 0.1%. A $1 or $2 surcharge on trips within the charging zone would reduce total VMT by 0.3 percent and 0.6 percent respectively.

Table 4.2 Estimated Impact on VMT in the New York City charging zone (below 86th Street)

Scenario A

($8 daily fee) Scenario B

($1 surcharge) Scenario B

($2 surcharge)

Base daily taxi trips in the zone, 6 am-6 pma 192,700 192,700 192,700

Base daily for-hire vehicleb trips 83,000 83,000 83,000

Change in for-hire VMT due to: Change in customer demand for taxi trips 2,300 8,800 17,600

Change in customer demand for for-hire trips 3,900 5,000 10,100

Total 6,200 13,800 27,700

Pct. change in total VMT 0.1% 0.3% 0.6%

20 Schaller Consulting, New York City Taxicab Fact Book, 2006.



a Based on taxi GPS data. b Includes black car, car service and limousines



5.0 Key Findings and Conclusions The most significant consideration in regulating taxi and for-hire vehicles is the management of the relationship between daily operations and the changes in demand, which are affected by fares as well as regional economic and population growth.

Key conclusions are presented below.

• A reduction in taxi trips is likely to reduce VMT by shifting some demand between the taxi and for-hire vehicle markets. A reduction in taxi trips would increase the availability of cabs and likely lead to some customers who currently take car services or black cars taking medallion cabs instead.

• There is no evidence that eliminating taxi hailing would reduce VMT. The degree to which VMT is reduced would depend upon how far taxis would travel back to a taxi stand after discharging a passenger. While the proposed scenario includes taxi stands that are located no more than a few blocks away from any given point within the specified area of Manhattan, a driver may have to travel past several taxi stands to find an available space in a stand queue. Furthermore, taxi drivers may opt to drive a longer distance to one of the more heavily utilized stands, or to stands that typically house customers traveling longer distances (resulting in higher fares).

• Taxi stand implementation would be challenging with respect to traffic operations. Taxi stands operate most effectively when they have highly visible signage and other identifiers, have adequate space for queuing vehicles and waiting customers, offer passengers assurance that vehicles will be present and ready to receive passengers, are located in a safe and well-lit area with shelter from the elements, and have an attendant available to insure that the stand operates in an efficient and orderly manner. Securing adequate curb and sidewalk space for taxi and customer queues may reduce curbside parking capacity and require the relocation of bus stops. Working around infrastructure such as fire hydrants also poses a challenge. At particularly busy locations, taxi queuing space would have to be long enough so that taxis waiting in queue would not block lanes, intersections or interfere with bus operations.

• Taxi stand implementation would be challenging with respect to enforcement. Hailing taxis is a part of the longstanding culture in New York City. A significant outreach effort would be required to teach the drivers and the traveling public to change their behavior. Other costs such as stand attendants and police enforcement activities must be considered as well.



6.0 References and Sources of Additional Information “Chapter 18 ½, Vehicles for Hire,” Cape Coral City Code, available from http://www.capecoral.net/citydept/cityclrk/Code%20Ch.18&half-Taxis.pdf (accessed November 9, 2007).

“Chapter 30, Vehicles for Hire,” St. Joseph City Code, available from http://ci.st-joseph.mo.us/clerk/chap30.pdf (accessed November 9, 2007).

“D.C. Municipal Regulations – Title 31, District of Columbia Taxicab Commission,” available from http://dctaxi.dc.gov/dctaxi/cwp/view,a,1187,q,487959,taxiNav,|30625|.asp (accessed November 9, 2007).

Darbéra, Richard. Taxicab Regulation and the Evolution of Communication Technology: The Tale of Three Cities. Association for European Transport, 2005.

Epstein, Samara. Director of Constituent Affairs, New York City Taxi and Limousine Commission. Interview by authors. Personal interview via telephone. New York, NY. 2 November 2007.

“Rules and Regulations for Taxicab Medallion License Holders, City of Chicago, Department of Consumer Services, available from http://egov.cityofchicago.org/webportal/COCWebPortal/COC_ATTACH/TaxicabMedallionLicenseHolder.4.14.06_2final[1].pdf (accessed November 9, 2007).

“Section 7-24-4-2455 Solicitation, acceptance and discharge of passengers,” Lawton City Code, available from http://www.cityof.lawton.ok.us/CityCode/Lawton_City_Code/Chapter_7/24/4/2455.html (accessed November 9, 2007).

Skok, Walter and Satoko Kobayashi. “An International Taxicab Evaluation: Comparing Tokyo with London, New York and Paris.” (John Wiley and Sons, 2007): 118.

Taxi Stands in Times Square and the Theater District. New York City Department of Planning and New York City Department of Transportation, 2001.

“Taxicab/Rampted Taxi Rules and Regulations,” San Francisco Taxicab Commission, available from http://www.sfgov.org/site/taxicommission_index.asp?id=37437 (accessed November 9, 2007).

“Telecom and Mobile,” available from http://www.springwise.com/telecom_mobile/zingo_taxi_hailing_a_cab_mobil/ (accessed November 9, 2007).



Schaller Consulting, The New York City Taxicab Fact Book. 2006.

“TLC Rules and Local Laws,” New York City Taxi and Limousine Commission, available from http://www.nyc.gov/html/tlc/html/rules/rules.shtml (accessed November 9, 2007).

Wright, Nancy

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