Rule status: Adopted
Effective date: March 4, 2023
Proposed Rule Full Text
Adopted Rule Full Text
Adopted rule summary:
Notice is hereby given in accordance with section 1043(b) of the New York City Charter that the Taxi and Limousine Commission promulgates amendments to the rules that correct typos, fix certain cross-references and update certain obsolete provisions.
Comments are now closed.
Online comments: 1
Via New York City Public Hearing and Comment Portal
Taxi & Limousine Commission
Office of Legal Affairs
33 Beaver Street-22nd floor
New York, NY 10004
Re: Proposed TLC Miscellaneous Rule Amendments
To the Office of Legal Affairs:
I am counsel to Big Apple Taxi Management here in NYC. We submit these comments with reference to the proposed regulations concerning the miscellaneous rule amendments package.
I have highlighted some of our comments below which are then more fully set forth in the body of this letter.
• While we agree with the spirit of the rule change, requiring owners and agents to pay sublessee drivers directly rather than through the lessee or other designee, streamlining the payment process for drivers, compliance will present agents with significant challenges in making sure drivers are paid accurately and on-time, accounting for short term changes in driver schedules, and finally, make it harder for drivers, as well as DOV lessee’s, to have their agreed upon lease payments automatically deducted. Owner’s and Agent’s should be given the option to continue to pay drivers through a delegated party, such as a DOV lessee, as long as the Owner or Agent agrees to pay driver’s directly in the event of non-payment by the delegated party or DOV lessee.
• The proposed limitation on taxi lease cancellation charges is unclear, and limits Owner’s and Agent’s to create enforceable long term leases. The rule needs to be clarified, and should allow for Owner’s and Agent’s to collect remaining lease payments under long term leases, especially DOV lease agreements.
Requirement to Pay Sublessee Drivers Directly
Currently the rules package proposes to add the following language:
“An Owner (or Owner’s Agent) must pay the Driver, including any sublessees, directly and must not delegate or assign this responsibility to another party.”
The TLC is proposing this rule change in an effort to protect drivers, and ensure that drivers are always paid completely, and on a timely basis. This purports to eliminate the middle man, and avoid situations where the drivers are not paid, either by mistake or intentionally, and are told by an owner or agent, that the lessee was already paid, and they need to deal with them, creating a “run-around” for drivers. While we support the goal and spirit of this rule change for drivers, compliance with the rule as written presents numerous operational challenges.
Driver shifts are often changed, in the short term and with very little notice. Currently, lease payments are deducted automatically from the payment to lessee or DOV lessee, and then the sub lessee drivers are paid by the lessee or DOV lessee. This structure allows for the driver’s to be paid quickly and accurately, while taking into account driver schedule changes. The rule change would require the owner or agent to allocate necessary deductions, make multiple payments to multiple sources, and invites inaccuracy in the event of schedule or other work changes not reported to the owner or agent, possibly creating delay in paying drivers to make sure payment is accurate, or in some situations, requiring owners or agents to have to recoup incorrect amounts already paid to drivers. As such, owners and agents should be given the option to continue to operate under the current structure, as long as they are willing to take responsibility for making sure the driver is paid whenever there is a failure to pay on the part of the lessee or DOV lessee, and the non-payment is reported to the owner or agent on a timely basis.
We suggest replacing the proposed rule change with the following:
“An Owner (or Owner’s Agent) shall:
(i) pay the Driver, including any sublessees, directly and must not delegate or assign this responsibility to another party, or;
(ii) Owner (or Owner’s Agent) shall be responsible for making full payment to the driver in the event any designee or assignee fails to pay the Driver as required, and Driver reports non-payment to Owner (or Owner’s Agent) within 15 days of non-payment.”
The rationale for suggesting to add the 15 days is that this will allow owners and agents to keep accurate records for one, and more importantly, creates a higher likelihood that payments made by the owner or agent can be recovered from the designee or assignee who were required to pay the driver in the first place, such as a DOV lessee.
Limitation on Taxi Lease Cancellation Charges
The rules package proposes the following addition:
“(ii) Limits on Cancellation Charge. An Owner must not require a Driver to pay a cancellation charge that is greater in amount than the rate for one lease term. However, if the lease term is for more than one week, an Owner must not require a Driver to pay a cancellation charge in an amount greater than the lease rate for one week. Examples include:
A. An Owner who leases a Taxicab or Medallion for one shift at the rate of $80 per shift can require up to an $80 cancellation charge.
B. An Owner who leases a Taxicab or Medallion for one week at the rate of $500 a week can require up to a $500 cancellation charge.
C. An Owner who leases a Taxicab or Medallion for six months at the rate of $2,000 a month can require up to a $500 cancellation charge.
(iii) A cancellation charge will only be permitted where the lease also provides that:
A. Owner can only charge a Driver a cancellation charge if the Driver is late in making lease payments at the time the Owner cancels the lease.
B. When a cancellation payment is made, the Driver’s obligation to make lease payments terminates immediately.”
Unfortunately, this addition is unclear in many ways, and raises several questions. Does this mean if a driver commits to a lease for a duration of 6 months, with a 6 month extension, and subsequently breaks their lease, they are no longer required to pay their remaining lease payments?
In comparison, if I lease a vehicle, and then turn the car in early, I’m still contractually responsible for the remaining lease payments. If I were to lease an apartment and then move out early, I am routinely responsible for the lease payments remaining in the lease, despite that fact that I no longer reside in the property.
Does the proposed iii.B. mean that lessors can either charge the lessee a cancellation charge or the remainder of the lease payments, or this that simply and additional restriction?
What about the case of a Driver Owned Vehicle Lease? The lessee has agreed to a long term lease contract for the purposes of purchasing the vehicle. If the lessee breaks the lease, not only do owners and agents now have to account for re-leasing that vehicle, but they could also potentially be dealing with ownership costs that would have been the responsibility of the lessee had they not broken the lease. Additionally, the vehicle that is now once again the property of the owner or agent, carries a reduced value based on the use by the lessee.
As set forth above, we believe this regulation will not accomplish its intended purpose. We urge this Commission to re-write these regulations to account for the challenges and questions presented herein. Thank you for your time and attention to our comments and concerns. We look forward to continuing to work together to arrive at the best result.
Very truly yours,