New York City – The City Council’s Committee on Transportation held a hearing Monday on Councilman David Greenfield’s bill that would stop livery or car service companies from charging more than 100% of the usual rate. This law would apply to all car services, including black car and limousine services.
“If it looks like price-gouging, and it sounds like price-gouging, and it acts like price-gouging, it is probably price-gouging,” explained Councilman Greenfield in response to a common practice by many online apps including Uber & Lyft that charge as much as 900% more than the usual fare.
There has been many recent news reports regarding Uber where costumers have expressed outrage over the company’s “surge-pricing” model. Passengers using the Uber app have reported being charged a fare of four to even nine times the normal rate. During New Year’s Eve, for example, Uber passengers have reported charges ranging from $116 to $400 fares for as little as a 25-minute cab ride. Councilman Greenfield’s bill seeks to stop this practice.
“You can use all sorts of fancy names – you can call it surge pricing, dynamic pricing, competitive pricing,” said Councilman Greenfield, “but at the end of the day it is simply price-gouging.”
The Taxi and Limousine Commission testified about the importance of protecting consumers and emphasized price certainty. The agency explained that the reason for regulating price is for predictability. Passengers can flag a cab in New York City knowing approximately what it would cost them to get somewhere as opposed to using a bus or train. People ride cabs with an informed decision and rely on predictability when paying fares. This is why meters are present in all yellow cabs around New York City. TLC Commissioner Meera Joshi acknowledged more must be done to protect consumers and that New Yorkers don’t want to be “ripped off.”
Testimony from a taxicab coalition including eight industry organizations representing over 20,000 taxi and livery cars praised Councilman Greenfield’s bill prohibiting livery vehicles from price-gouging passengers.
The representatives of car service companies, including the CEO of Carmel, all agreed that a 100% cap is more than fair even in the most extenuating circumstances such as snow storms. “I ran the numbers,” said Councilman Greenfield. “At the maximum rate that Uber could charge for a ride from my district in Midwood to LaGuardia airport it came out to $780 for what would normally be a $40 trip.”