T&LC, Operators Make Big Strides In The Big Apple

Posted on September 1, 1993

T&LC Chairman Fidel Del Valle updates the status of ticketing, licensing of non-NYC- based operators.

It’s not a job that many people would lust after. When Fidel Del Valle was appointed commissioner of the New York City Taxi & Limousine Commission (T&LC) in mid-1991, the agency was fielding lawsuits while threatening to seize the vehicles of non-city-based operators.

Today, the T&LC is trying to iron out its long-standing differences with operators based both outside of New York City and those based outside New York State. Under Del Valle’s leadership, the T&LC has worked together with livery associations to create a tiered licensing program that allows non-city-based operators the access they need to this bustling metropolis.

While many operators might think this is simply a regional problem, many others are finding that similar programs are being implemented in their areas. L&C sat down with Commissioner Del Valle to let him air his views on the problems of the past and the solutions of the future.

Limousine & Chauffeur: How is the relationship between operators based in New York City and those outside the city with the T&LC?

Fidel Del Valle: Right now it’s pretty good. We’ve had some rocky times in the past couple of years, but we have managed to forge legislative compromises with respect to our differences. And we’ve had a very nice relationship, particularly with the Long Island and Westchester associations, where at their requests we have gone to those various locales with our licensing vans and done a lot of the paper work that is necessary for operators who are interested in being licensed by New York City T&LC.

L&C: How has this relationship changed since you took over in 1991?

Del Valle: When I took over the relationship was considerably more contentious. There were lawsuits filed against the T&LC by various groups.

There were threats of legislation to limit our licensing authority and so forth. We have worked out most of our differences since then.

L&C: Explain how the new tiered system works for those operators who are based outside of New York City?

Del Valle: The tiered system is a result of primarily legislative compromises that occurred in the past few years. Essentially the legislature answered concerns expressed by its constituents that perhaps the T&LC wouldn’t be fair to them if some licensing mechanisms where required. So the legislators response to that essentially codified in state law a lot of licensing requirements and procedures for New York City, with respect to operators who are based outside of New York City.

The result is a three-tiered licensing scheme for for-hire vehicles, which is a second category of taxis. New York City has two types of taxis—one is the yellow medallion cab, that’s the only vehicle that is authorized to legally pick up street hails in New York City. The other type of cab is what is legally called a “for-hire vehicle” (FHV). It’s colloquially called a “livery” which is a misnomer.

The three tiers effect for-hire vehicles. Tier one has been in effect in the city for some time. Tiers two and three were created by the state legislature. The three tiers breakdown this way:

  • Tier One is a full authorization license that allows the holder to operate a FHV picking up passengers in New York City and dropping them off in New York City by pre-arrangement. This requires a $275 per year licensing fee for each vehicle. Each vehicle must be operated out of a licensed for- hire vehicle base. The base license costs $500 a year. The base can have any number of cars affiliated with it. The driver is also required to have a T&LC drivers license— which costs about $60 a year. The start-up costs for an application are higher because the operator has to pay fingerprint fees and medical examinations. But those are one-shot costs, assuming the person’s fingerprints don’t change.
  • Tier Two is a limited authority license that permits the holder only to pick up passengers in New York City to take them outside of the city as their final destination. It does not allow them to do point-to-point within the city. This license costs $250 per year per vehicle as of June 30, 1993. It does not require that the vehicle be affiliated with a base licensed by the T&LC. There is reciprocity for the drivers license in that if the driver has a license that requires a criminal history check done with his fingerprints, the T&LC will accept that as his license.
  • Tier Three is a very limited license for a very limited universe. It’s not really a license, it’s an endorsement, which costs $100 a year It is issued to taxi cabs that have a concession to service Metro North and Long Island railroad stations. By “taxi” I mean these vehicles are licensed somewhere as a full taxi cab. A livery vehicle does not qualify. They have to show proof that they have some sort of concession to service the railroad station. This allows the driver to pick up at either LaGuardia or Kennedy airports for a destination outside of the city. Those are the three tiers and they’re basically in state legislative concrete.

L&C: Do you believe the system that is currently in place regarding both interstate and intrastate operators is one which could work in other cities around the country?

Del Valle: It would probably be a lot easier to create this system in another part of the country, depending on what the history of that jurisdiction is. The system we have now has 60 years of history in New York City behind it. In 1937 the Board of Aldermen, which was the predecessor of the current City Council, capped the number of taxi cab licenses in New York City. That number has not been allowed to expand.

In the ensuing 60 years there has been a significant increase in the demand for service in the city, particularly by pre-arrangement. However, with a cap on the number of taxi cabs, that service wasn’t met and thus created a new industry for us—which we call the FHV industry.

Some might ask, “Why doesn’t the T&LC just increase the number of medallion cabs?” The problem is that as time went by, because of various anomalies in New York City and New York State law, these medallions are freely transferable and have a value of between $135,000 and $180,000 each. You can use the taxi medallion as collateral for a loan. That represents almost $1 billion dollars in loans in New York City, just for taxi medallions that are worth a total of almost $2 billion.

Simply increasing the number of taxi cab licenses would result in dramatic financial displacement, both in the cab industry and financial industry. So rather than do that the T&LC created a different category of cab. Whether that type of system, with the two category’s of cab’s—one having multiple tiers—will work in another part of the country or not really depends on the individual situation. If you were to erase the City’s history and didn’t have the baggage of 60 years of evolution and the ensuing financial interests, we would set up a system that had a more homogeneous licensing authority. But we have to live with our mistakes of the past.

L&C: How helpful were the Nassau Suffolk Limousine Association and the Limousine Indus try Council of Westchester in working to solve the problems that ultimately resulted in the new tiered system?

Del Valle: Both of those organizations, together with the Long Island association (the Long Island association is a group of local business people that includes the for- hire vehicle folks), really worked together with the T&LC—they were the three main players in hammering out what the final legislation looked like. It was very difficult. A lot of people had as many ideas as the human imagination could come up with, but they were all moving toward the same objectives. The final logjam was blown apart by the Westchester association, and we finally cut a deal where everybody was satisfied that we had the best deal we could cut. Not everybody was ecstatic, but everyone agreed it was the best compromise we could come up with. The legislature passed it and the governor signed it.

L&C: What is the current T&LC policy regarding out-of-state operators?

Del Valle: The T&LC considers somebody from out-of-state the same way it would consider anybody who is just an out-of-town operator. The state legislature has put into place a system where we treat out-of-city operators at somewhat of an advantage to city-based operators with respect to licensing. However, if that out-of-town operator is based in Westchester, we’re going to treat him the same as an operator from out of state.

L&C: Do you believe the T&LC licensing policies that apply to operators based outside of New York State have impeded interstate commerce?

Del Valle: No. One of the things that we encountered in these discussions over the years has been a rather sad understanding on the part of some operators as to what the interstate commerce clause and the interstate commerce act play in the interstate industry. Unfortunately a lot of people were under the impression that simply being registered with the Interstate Commerce Commission conferred some sort of “super exemption” that made them immune from any state or local law or regulation.

The interstate commerce act and commerce clause of the Constitution were designed specifically to keep one state from imposing trade barriers on somebody who wanted to do business in another state. The rule of thumb test is that if you have a regulation that makes it more onerous for somebody out-of-state to do business in your state than a domestic operator, then that is unconstitutional and illegal. If somebody from out-of-state is in no worse shape trying to do business in your jurisdiction, and a local operator has no more burdens on him as far as licensing, regulations, taxes or whatever, then it is completely appropriate for the local jurisdiction to regulate whatever it is.

L&C: Explain what happened with the federal lawsuit filed by the New Jersey livery associations alleging that the T&LC had violated their rights in regard to the interstate commerce clause?

Del Valle: The case was brought in federal court. Originally the action was started in Newark federal court and was transferred to the Southern District in New York’s federal court system. Judge Miriam Cedarbaum was the federal judge who presided over the case. There were a lot of arguments made relating to the commerce clause of the Constitution and interstate commerce act. Judge Cedarbaum ruled in favor of New York City on all points, but left open the question as to whether the licensing fees were consistent with those constitutional standards I have talked about before. That was the only question left for trial. Since the judge’s decision, the New York state legislature came down with the current legislative framework, and the federal case was withdrawn.

L&C: What is the current T&LC policy regarding out-of-state operators who are not registering their vehicles?

Del Valle: If your vehicle is not licensed, whether you’re based outside of New York state or New York City, or you are based within New York City, and are found operating for-hire you will be issued a summons. If you are caught by an appropriately equipped team of inspectors or police officers, your vehicle will be seized pending a hearing.

L&C: What’s the current T&LC viewpoint on New York City- based operators having to join re­taliatory limousine commissions in other areas?

Del Valle: I’ve heard that remark from other legislatures and various jurisdictions—that they want to retaliate. My best definition for retaliate is “giving back for some evil receipt.” I don’t understand what “evil” they’re talking about. And I frankly don’t care.

If any jurisdiction makes a de termination that for the public good and welfare they require some sort of licensing or enforcement system in their community, then they are absolutely entitled to have such a system. If they were to ask for our assistance in setting something like that up, we would be happy to provide them with assistance. In fact, Westchester County is working to set up its own taxi and limousine commission. We have been working very closely with County Executive Andrew O’Rourke in providing him with information as to how we operate, and drafting legislation that he could use in telling what our mistakes and successes have been. We are essentially trying to help Westchester County design its own system.

The New York City T&LC’s business is only concerned with the regulation of the for-hire vehicle industry in New York City. We are not a charity association. We do not represent the interests of New York City operators anywhere else or in New York City. Our business is only to regulate the industry.

L&C: What advice can you give to intrastate and interstate operators to work most effectively with your organization?

Del Valle: We have set up various ways we can communicate with the industry. We have something called a “livery advisory group” that acts as a conduit to the commission providing us with input and feedback on existing problems the industry is facing. We already have members from Long Island in that group. It’s a very useful and effective group for making changes in the industry or in regulations or legislation that affect the industry.

To keep that system working is essentially to maintain a business dialogue—having an openness to people’s concerns. For example, the industry is concerned that if you’re licensed in New York City, your insurance cost is going to increase inappropriately., We can work with the industry in educating the insurance carriers as to the unique aspects of the industry that should be taken into consideration.

We are currently working with the State of Connecticut to try to synchronize the Connecticut motor collision drivers license system. There has been recent federal legislation that standardized a lot of licensing procedures in every state for commercial vehicles. This program was the Con­necticut DMV’s idea. With it, the procedures used for obtaining a license in Connecticut and New York City will be synchronized in such a way that when a Connecticut operator shows up and wants to get a New York City license, he can be expedited since 90 percent of the work was already done when he applied for his Connecti­cut license. We’re very hopeful that we can use that as a model for every place else.






Full authorization. Allows operator of FHV to pick up and drop off in New York City by pre-arrangement.

$275 per vehicle per year $500 annual base fee (vehicle must be affiliated with a base) $60 T&LC drivers license


Limited authority that permits holder to only pick up clients in New York City and take outside of city. No point-to-point within city allowed.

$250 per vehicle per year No base affiliation required Drivers license must require criminal history check or $60 T&LC license will be required


Endorsement issued to taxis with concession to service Metro North and Long Island railroad stations. Driver can pick up clients at airports for drop off outside of city. Livery vehicle doesn’t qualify

$100 per vehicle per year

The New York City T&LC created this three tiered system as a result of legislative compromises. These licensing requirements are now part of New York State law. Tire Two applies to both intrastate and interstate operators.


Related Topics: New York Taxi & Limousine Commission, The LCT Interview, unlicensed operators

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