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As a Taxi-Hailing App Comes to New York, Its Legality Is Questioned

Wed, 09/05/2012 - 11:12am

New Yorkers have long adopted their own techniques in the fine art of hailing a taxicab, a theatrical, frustrating, competitive ritual of the city. There is the high-pitched whistle, the two-handed gesticulation, the rapid snapping of fingers. Many favor the classic wave — an open palm raised high, stretching into coming traffic. And now, a start-up company says it has developed a more efficient option. Uber, a company based in San Francisco, is introducing a smartphone app to New York that allows available taxi drivers and cab-seeking riders to find one another. The company said the service would begin operating on Wednesday in 105 cabs — a bit less than 1 percent of the city’s more than 13,000 yellow cabs. Uber added that it hoped to recruit 100 new drivers each week. But the program may have a significant problem: Taxi officials say that Uber’s service may not be legal since city rules do not allow for prearranged rides in yellow taxis. They also forbid cabbies from using electronic devices while driving and prohibit any unjustified refusal of fares. (Under Uber’s policy, once a driver accepts a ride through the app, no other passenger can be picked up.) Cabbies using the Uber app receive a smartphone loaded with its technology, which tries to predict areas where rides are in high demand. The driver nearest to a requested pickup location receives a notification and is given 15 seconds to respond. Travis Kalanick, Uber’s chief executive, rejected criticisms that the service violated city rules against prearranged yellow-taxi rides. “Prearrangement means it’s basically on behalf of a base,” he said in an interview. “We’re not working with a base.” The city’s Taxi and Limousine Commission, which met with Mr. Kalanick on Tuesday, said it had not yet determined whether Uber was in compliance with the guidelines. In a statement, David S. Yassky, the chairman of the commission, said only that the city had “led the country in terms of putting new technology to work for riders” and noted that the commission was currently requesting proposals for a smartphone-based payment system. At the meeting, officials raised concerns about a regulatory issue that would prevent Uber from processing credit cards for taxi rides, according to Mr. Kalanick. Mr. Kalanick said he had agreed to make the app’s new services available for no charge for the next week, so that riders could “get a taste of the future,” while the two sides try to resolve the regulatory concerns. Uber is one of several start-ups, like Taxi Magic and GetTaxi, trying to profit by connecting drivers and passengers more efficiently. Another company, Hailo, said it had already registered 2,500 drivers to use a similar service that it planned to unveil in the coming weeks. “The bottom line is the genie is out of the bottle,” Mr. Kalanick said of the apps. “I think the T.L.C. knows that.” The influx of apps appears to have created a moment of unity among yellow-taxi, livery and black-car operators, all of whom have raised concerns about the apps’ legality. Some industry officials said the commission was not acting forcefully enough; the result, said Avik Kabessa, the chief executive of Carmel Car and Limousine Service and a member of the board of the Livery Roundtable, a group representing livery drivers, is a New York City version of “the Wild West.” An analysis conducted by the Metropolitan Taxicab Board of Trade, which represents yellow-taxi operators, identified what it deemed to be 11 potential violations of taxi guidelines in Uber’s model. These included charging a tip automatically, not allowing for cash payments and turning away passengers while being on duty. Mr. Kalanick has said that Uber can operate while following all relevant rules — noting, among other concerns, that drivers are instructed to use their phones to find passengers only while their cars are parked or legally standing. Councilman James Vacca, the chairman of the City Council’s transportation committee, said that the spread of taxi apps had the potential to create a “two-tiered taxi system” in the city: one for people “with fancy smartphones” who are asked to pay a premium, and one for everybody else. “As a councilman from the Bronx,” he said, “a disparity like that does concern me.” Mr. Kalanick said Uber employees had recruited drivers at airports and gas stations. He said the company interviewed each driver and performed background checks. Bhairavi Desai, the executive director of the New York Taxi Workers Alliance, said most drivers she had spoken to were skeptical of the app, though she acknowledged it could prove useful for drivers during a slow night. At least one driver agreed. Arefin Rashid, the driver who arrived when Mr. Kalanick demonstrated the app on Tuesday, said the service would be especially welcome after a trip outside Manhattan. “It’s going to be a good thing to get fares more quickly,” he said. “I don’t have to worry about not having a next passenger.”

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September 05, 2012

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