Tesla Taxi Fleet Denied Access to New York

New York’s Taxi and Limousine Commission has voted to reject new for-hire licenses for electric vehicles in a 5-1 vote. The decision covers one proposal by the ride share service Revel, which planned to launch its fleet of 50 Tesla Model Y vehicles in New York City.  Revel blasted the decision as being anti-competitive, as it had planned to compete with existing ride share services Uber and Lyft.

“We’re offering exactly what this commission has been asking for for years: fair treatment and stable pay for drivers — who are all W-2 employees with benefits — and a plan to drive EV adoption in the city,” said Revel CEO Frank Reig in a statement made before the Taxi and Limousine Commission.

Reig contrasted his company’s employment practices with Uber’s and Lyft’s practice of regarding their drivers as independent contractors who use their own vehicles and often earn less than minimum wage when all of their operating expenses are accounted for. These ride sharing services had once been regarded as disruptive of New York City’s traditional yellow taxis because they could offer lower fares by not operating their own vehicles.

Reig went on to accuse the commission of ramming the measure through with a minimum of input from the public or any consideration for the environmental impact of operating gas-powered vehicles. The commission would have allowed Revel to operate if it bought an equal number of gas-powered cars and swapped out the licenses for electric vehicles.

He indicated that Revel might hit New York City’s streets anyway, saying that the law is on the company’s side despite the commission’s decision: “Never in Revel’s history have we operated illegally.”

Those who voted against allowing Revel to operate in New York City expressed concerns about increased congestion in a city that already has heavy traffic. Bill Aguado, who represents the Bronx, was the sole commission member to vote against the measure.

“It is not sustainable to allow an unlimited number of new vehicles to the road in a city that is all too familiar with the choke of traffic congestion. What we will not allow is the opportunity for another corporation — venture capitalists or otherwise — to flood our streets with additional cars,” said Taxi and Limousine Commission chairperson Aloysee Heredia Jarmoszuk.

Elon Musk’s previous prediction that there may someday be a ride sharing network consisting of self-driving Tesla vehicles may lead to some speculation that Revel may find a champion in the Tesla CEO if things come down to a legal battle between Revel and the Taxi and Limousine Commission. If Revel can set the precedent that the commission overstepped its bounds in banning the company from operating on NYC’s streets, that could open the door for a future Tesla-backed ride sharing service in which privately owned vehicles could simply pull out of their owners’ driveways to go pick up a passenger.

This concept does depend on Tesla being able to bring its Autopilot and Full Self-Driving software up to the level at which it could handle most conditions on the road with a minimum of driver input. Automotive experts say that it would have to be brought up to Level 5 on SAE International’s scale of autonomous driving before a fleet of self-driving vehicles used for a ride share service would be feasible. Tesla’s Full Self-Driving software is currently at Level 2.

The obvious benefits of a self-driving fleet of vehicles leased to a ride share network may include a decline of accusations of sexual misconduct and kidnapping that have plagued existing ride sharing services like Uber and Lyft. Uber has previously faced class-action lawsuits alleging that lax background checks for its drivers led to a string of drivers sexually assaulting female passengers, for instance.

By classifying its employees as employees rather than contractors, Revel may have a better chance of avoiding issues like these by keeping tighter controls over those who drive for them along with addressing common complaints among activists who accuse Uber and Lyft of shortchanging their drivers. However, that won’t necessarily help those who might be interested in driving a Tesla for a ride sharing service if the Taxi and Limousine Commission won’t allow Revel to operate on New York City’s streets.