New York T&LC Announces Ticketing, Towing Unlicensed Limousines

LCT Staff
Posted on September 1, 1991

To say that limousine operators in New York, New Jersey, and Connecticut are frustrated with the New York Taxi & Limousine Commission (T&LC) would be an understatement.

Over the past three years, the T&LC saga has involved issues such as Interstate Commerce Commission (ICC ) rights, definitions of “doing business in NYC,” federal and state lawsuits, court injunctions, state legislation, rumors of the T&LC’s abolishment, and three different T&LC commissioners. From the limousine industry standpoint, the situation still has not been adequately resolved. However, from the view of newly appointed T&LC Commissioner Fidel Del Valle, circumstances are much more clear.

Speaking at the National Limousine Association’s Summer Seminar in New York City recently, Del Valle informed operators that the T&LC has specially defined “doing business” in the city so an operator knows what actions necessitate purchasing a license. An operator is required to be licensed if he picks up a passenger in New York City – whether that trip has been previously contracted or is a continuation of an arrangement that started the day before does not matter. Runs that consist of a drop off only or a continuous trip within the city do not require a license. A vehicle that is licensed by an authority other than the T&LC still is considered illegal unless it has a T&LC license.

The agency has also terminated all moratoriums and exemptions on the ticketing of illegal limousines at New York area airports. Beginning in September 1991, the T&LC along with the Port Authority of New York and New Jersey plan to begin ticketing and towing unlicensed vehicles throughout the city.

This announcement unleashed legal moves by the NLA and local limousine associations to stymie the vehicle seizures and reach a resolution to the crisis by pressing for decisions in pending court cases.

There are currently two lawsuits pending against the agency’s licensing regulations – one filed in federal court by the New Jersey limousine associations and a second filed in NY State court by the limousine Operators of Connecticut (LOC), Nassau-Suffolk Limousine Association (NSLA), and Limousine Industry Council (LIC), which represents operators in Westchester County and Hudson Valley.

Spelling Out NYC Problems

New York City’s transportation problems are unique. Nowhere else is there such a concentrated number of vehicles based from within the city, the state, and other states all vying for business.

The city has two types of for-hire vehicles: taxi cabs and FHVs (for-hire vehicles). “A taxi cab has the authority to take a passenger anywhere in the city of New York and can accept street hails,” says Del Valle. “A FHV includes vehicles of any description that carry less than nine customers. That type of vehicle cannot cruise. It basically has to operate by prearrangement – essentially the way a taxi would anywhere else in the country.”

According to Del Valle, 10 to 15 years ago, NYC had an insignificant number of FHVs, instead relying on taxi cab transportation. However, the cabs concentrated on the central business district and ignored the rest of the city, thus creating a demand for an alternative mode of transportation.

“When there is a demand for service, entrepreneurs answer that demand. Unfortunately so do crooks,” remarks Del Valle. “NYC jumped from 11,787 licensed medallion taxi cabs to an additional 35,000 to 50,000 vehicles for hire.”

Due to abuses by this new segment of transportation, city politicians enacted a law that required city licensing of vehicles, minimum insurance requirements, and vehicle inspections. The basic idea behind the legislation is to take the license fees and use the money to eradicate illegal for-hire operators.

“Well what happened?” Del Valle asks rhetorically. “Generally, things didn’t go quite according to plan. We still have 11,787 taxis and approximately 33,000 licensed for-hire vehicles. We are using some of the money to fight the illegals but we have the unexpected problem that a lot of time, personnel, and money is being wasted on trying to license those who refuse to get licensed. It is the goose that killed the golden egg.”

Out-of-State Operators Balk

According to many limousine operators, the “goose that killed the golden egg” is the T&LC’s failure to account for operators who are licensed outside NYC and bring people into the city without providing point-to-point service in NYC.

In an attempt to account for out-of-town operators, in 1986 the T&LC gave 1,200 out-of-town operators exemptions from NYC licensing requirements. However, under previous chairman Jack Lusk, the T&LC revoked the exemptions in March 1989 and demanded licensing fees, annual vehicle inspections, and proof of insurance minimums from operators.

Many operators contend that the NYC licensing is an infringement of their ICC rights to provide interstate commerce. “Companies that are legitimately licensed to operate in other venues and have ICC licenses to go across state lines and should not be considered illegal because they enter NYC in the course of their daily business,” says Doug Major, president of the LOC. “They are fulfilling a contract that was made outside the city of New York.”

However, Del Valle contradicts the argument that operators have protection from the licensing under ICC rights. “Our interest is not to ‘protect’ domestic businesses at the expense of out-of-state enterprises. In fact, it’s illegal [to do that],” he says. “When this whole thing arose about three years ago, as we consulted heavily with counsel to the ICC. They told us specifically … that our regulations are local in nature. To quote them, they said, ‘It’s a local problem and not our concern.’ So the city of New York is taking a position that ICC registration is not something that would inhibit T&LC licensing.” Del Valle admits that the agency tried to establish a secondary class of licensing for FHV operators based in New York State but not in NYC; however, the proposal has been ‘stalemated’ by legislators for three years.

Meanwhile, the NLA petitioned the ICC on July 10th for a “declaratory statement” outlining the agency’s position in the New York matter. “We are hoping to get a hearing within the next 30 days. If this matter does come to a hearing, it will probably be another 30 days before we get a decision,” says Wayne Smith, executive director of the NLA. “We plan to use this decision to file a motion supporting the existing court case or we may file a new case.”

Legal Battles Begin

When the T&LC originally revoked the exemptions in March 1989, limousine operators from the four New Jersey associations filed a lawsuit in federal court contending the licensing was a violation of ICC rights. The case has sat dormant on the desk of Judge Miriam Cedarbaum since that time. The entire industry, including the T&LC, has been waiting for a judgment in the case testing the legality of NYC licensing.

With pressure coming from the NLA, T&LC, and state associations, Cedarbaum has announced that she will hold a hearing on September 14, 1991 to set a date for trial. Operators speculate that she has opted for a decision by trial to divert disfavor away from her if an unfavorable decision is rendered. Operators hope the trial will begin by October 1991.

Del Valle’s announcement to begin ticketing on July 1, 1991 began a flurry of activity. First, NSLA attorneys Ken Reiss and Martin Dorfman successfully obtained a temporary restrained order (TRO) against the T&LC from ticketing until August 27, 1991. The group hopes to have the TRO extended to be in effect until there is a decision in the ICC case.

Also, the NSLA, LOC, and LIC filed a suit in New York State Court claiming that NYC has no right to license operators who are not based in the city because these operators are already licensed in their own areas. The operators are concerned because T&LC licensing can also make an out-of-town operator liable for New York City income and business taxes.

According to Del Valle, the T&LC is merely enforcing the law. The NY Department of Finance is “literally concerned with your rubber touching the city’s asphalt – literally,” stresses Del Valle. “If it [a FHV] comes into the city at least 30 times a year – congratulations, you are a NYC taxpayer.”

The impending decision in Judge Cedarbaum’s court will clear up a lot of questions and raise some others. If the decision upholds T&LC licensing, out-of-town operators will be required to register their vehicles and chauffeurs. If the decision upholds ICC rights, how will the T&LC monitor FHVs in the city? Or will the T&LC attempt to create a compromise license for out-of-town operators?

Related Topics: Interstate Commerce Commission, Limousine Operators of Connecticut, Nassau-Suffolk Limousine Association, National Limousine Association, New York Taxi & Limousine Commission

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