A City Council-convened panel wants to institute Uber-like surge-pricing for yellow cab trips as part of a $600 million proposal to bail out debt-ridden drivers, according to a report set to be unveiled Friday.
The recommendations come after months of debate over the fate of drivers who purchased taxi medallions, often with the city’s encouragement, as their value surged — then found themselves facing bankruptcy when the market collapsed.
Companies like Uber and Lyft already utilize surge pricing, which charges passengers more money when demand is highest. Yellow cabs have mostly long operated with fixed fees, with the exception of a small pilot program that lets some taxi drivers increase prices with demand.
By pegging prices to demand, taxi drivers could make more money at rush hour — and be more competitive at times when demand is low, the report suggests. An “expanded and improved” yellow taxi e-hail app, another one of the report’s recommendations, could help facilitate the so-called “dynamic” prices.
More importantly for debt-ridding drivers, the report also recommends that the city partner with private corporations to buy off medallion debt so that drivers are only obligated to cover their medallion’s current cost, and not the inflated rate at which it was purchased.
The report was spearheaded by Council Members Stephen Levin and Ydanis Rodriguez.
In a statement, Council Speaker Corey Johnson said he and other legislators would “review all of the recommendations in the report” and determined the “best path forward to help the industry, from debt purchase and modification, to modernization.”
“The City Council is painfully aware of the hardship and suffering people in the taxi industry had to endure, especially the drivers, who are almost all immigrants,” Johnson said.
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