It never ends, I swear.

If this back-and-forth keeps up, we're all going to get whiplash. Bloomberg News reports that once again, the courts have blocked the Taxi and Limousine Commission's ehail pilot program, just days after it was given the all-clear. The black car business has appealed the dismissal of its suit against the program, and an appeals court judge has granted a temporary injunction until there's a decision.

Good thing this broke after the end of TechCrunch Disrupt, or we might have had a disruptors' riot on our hands. 

"It is appalling that narrow commercial interests continue to try to block passengers from using the latest technology," said TLC commissioner David Yassky in a statement provided to Betabeat. "You can’t stop progress, and these obstructionists shouldn’t be trying.  We're confident this program will move forward.”

The plaintiffs' attorney, meanwhile, crowed: “This faux ‘pilot program’ is so fundamentally flawed and illegal in so many respects that it had to be stopped,” he told Bloomberg. “And now it once again has been.”

The appeals court is scheduled to issue a decision in late May. Until then, guess us residents of the outer boroughs will just have to get a cab the old fashion way: by shadily giving the nod to a livery car driver cruising down Steinway Street.

Gotta jet. (Photo: screencap)

Well, that sure didn't take long. On Tuesday, a judge dismissed the lawsuit against the city's taxi apps pilot program. And today, Hailo began rolling out a beta test of its own app for yellow cabs.

Earlier today, "founding passengers" received a chipper email from CEO Jay Bregman, which announced: "I can’t tell you how long I have waited to say this; Hailo Beta is LIVE in New York City! Think of Hailo as The Taxi Magnet - the app that brings Yellow Cabs to you."

The beta is currently invite-only and will add additional riders in batches, but you can tweet using #SkipTheLine and every day Hailo'll pick 10 people who get in early. In a blog post, Mr. Bregman called it "closed, limited testing," explaining that this is a smaller-scale dry run to make sure all systems are go for the "a larger scale pilot."

In the meantime, here's a video from Hailo explaining how the service works. It depicts a woman hailing a cab for the airport from her bedroom, and it must feel like a real kick in the teeth to the black car business.

(Updated, 4:00 p.m.) Well, looks like the fight for the e-hail market is as dramatic as ever. The TLC tells Valleywag that so far, they've approved just one startup for inclusion in the official pilot program--and it's Uber, not Hailo. A spokesperson told Valleywag that, "it appears that Hail-O is operating outside of it. We are communicating firmly to taxi drivers that they may not use unapproved e-hail apps." We've reached out to Hailo for comment and will update if we hear anything.

The TLC provided Betabeat with a statement from Taxi Commissioner David Yassky, which at least makes it sound like there are other companies in the approval pipeline:

“Thanks to the NYS Supreme Court’s ruling this week, we will be able to see e-hail services made available to the riding public through a one-year pilot program that officially begins today.  The first provider to be approved is Uber Technologies, Inc. There are several other companies in various stages of our approval process with others sure to join them, and we are excited about the prospect of seeing the universe of choices expand."

Meanwhile, everyone keep their eyes peeled for the sight of Travis Kalanick and Jay Bregman heading outside to settle this thing with fists, mano-a-mano.

(Updated, 4:40 p.m.) Nothing like a little Friday-afternoon announcement scramble. Uber has provided us with a statement from CEO Travis Kalanick: "We couldn't be happier to be the first and only e-hail app approved by New York City to operate -- and UberTAXI will be lighting up yellow cabs across New York City momentarily."

Disrupt taxis! (Photo: nycgov.tumblr.com)

The era of the e-hail is upon us at last! A judge has dismissed a lawsuit against the city's taxi apps pilot program, meaning the Taxi and Limousine Commission is free to proceed.

The Livery Roundtable and the Black Car Assistance Corporation filed the lawsuit back in February, just as the TLC's year-long experiment was scheduled to begin. E-hailing apps would, of course, challenge the stranglehold the black car business has long had on the pre-scheduled pickup business. Naturally, the industry has fought like hell against the program, asking the court for an injunction against it and claiming it exceeded the TLC's authority and was basically a sneaky way to fully and permanently implement e-hailing.

But the courts didn't bite. The decision handed down today rejects the request to block the program, noting that most of the parties to the suit "represent or have financial interests in businesses that operate vehicles known as black cars or livery or for-hire cars." Judge Carol Huff also points out that, contrary to arguments made in the lawsuit, e-hailing apps are likely to reduce discrimination, since it's not like drivers can see their passengers first.

After going through each of the complaints in the suit, she concludes: "the petition is denied, the restraining order is lifted, and the proceeding is dismissed." Insert your own Law and Order sound effects.

Randy Mastro, the lawyer handling the case on behalf of the BCAC and other parties, is not a happy camper: “While we are continuing to review it, this decision is so fundamentally wrong in so many respects that we are contemplating an appeal," he told Betabeat in a statement.

TLC Commissioner David Yassky was singing a happier tune: "The market will ultimately decide which apps rise or fall and we have an obligation to give the riding public that choice. Thanks to today’s ruling, they have that choice."

Uber CEO Travis Kalanick also took a victory lap, crowing in a statement that, "Ever since our initial launch of Uber for New York CIty yellow cabs in September, we've been saying that you can't stop progress when the people want it enough."

He also held up the TLC commissioner and the mayor as almost Howard Roark-like warriors against the grain: "New York City has some of the deepest dug-in, most entrenched special interests in the country. The fact that Taxi Commissioner David Yassky and Mayor Mike Bloomberg were able to overcome the transportation industry's blatant self-interest should be a lesson for other cities and states who also want to be forward-looking, tech-friendly and visionary."

Don't expect to whip out Uber for your commute tomorrow morning, though--it'll take time to get the ball rolling again. But the biggest barrier to the pilot is now gone.

(Update) Hailo CEO Jay Bregman has also provided a statement, saying: "Hailo always believed that e-hailing is not only legal, but inevitable. We are delighted by the ruling and are preparing to launch immediately."

Second problem: To deal with high demand during the early hours of 2013, San Francisco-based Uber is instituting surge pricing, which will likely lead to some serious transportation expenses.

Well, don't say you weren't warned. The company emailed customers over the weekend, explaining its surge pricing policy in advance, giving fair warning to the prices they can expect during the New Year's crunch.

NYE pricing is not for the faint of heart. The average surge multiple will likely be 2x normal prices, but during extreme spikes it could cost you $100 MINIMUM before time and mileage charges! So be careful with those Uber ride requests. Uber rides will be reliable on New Year’s Eve, but they’ll also be pretty pricey.

Here's a helpful graph:

In case that wasn't enough, Uber founder Travis Kalanick and Ryan Graves, the company's head of operations, livestreamed a Q&A session to explain the surge pricing scheme. The basic gist: By charging customers higher fees during periods of heightened demand, Mr. Kalanick said the company creates incentive for more drivers to pick up fares from Uber.

"We work with limo companies and their drivers," he said, speaking generally of the service in cities around the world. "On New Year's Eve, these guys have alternatives. They can rent their car out for $1,000 and sit around all night. In some cities, drivers might have relationships with hotels or restaurants where they can get filled very quickly."

With Uber's surge pricing system, he said, "drivers know the price is coming up, they go on the system, they stay on the system longer, and more drivers come onto the system."

Surge pricing, Mr. Kalanick insisted, is more or less revenue neutral for the company, which takes 20 percent of total fares for its black car service: When surge pricing takes effect, demand tends to come down on a roughly linear basis. "When the price goes from 1x to 2x, we're seeing half as much conversion," he said. "When it goes from 2x to 3x, we're seeing a 30 to 40 percent decrease of the number of people requesting a ride."

Mr. Kalanick has good reason for communicating clearly on surge pricing. Not only is New Year's Eve the "craziest time of year" for Uber, but 2013 is going to be a crucial period for e-hailing, at least in New York. Earlier this month, the Taxi & Limousine Commission approved a year-long pilot program for taxi apps that will let New Yorkers flag down yellow cabs with their smart phones as early as February.

Meanwhile, with the pilot set to launch, Uber competitor Hailo is said to be closing on a $30 million Series B that will help the company ramp up in the New York market, with Union Square Venture's Fred Wilson reported as the probable lead investor in the round.

In addition to the livestream and the warning emails, Uber unveiled what it calls a sobriety test for the app: If you want to use your phone to hail a car during a surge period, customers have to enter the multiplier they're paying to use the service amid high demand. That system worked out well in Sydney, Australia, which Mr. Graves pointed out has already rung in 2013.

At peak hours, Australians paid about 4.7 times the regular Uber fare, but Mr. Graves reported that the company had only received one angry email thus far. Of course, New York is not Sydney. "Australians generally polite in social media channels," said Mr. Graves. "We hope you'll be nice to us. We're doing the best that we can."

BFFs

With all the excitement over last week's decision to test out taxi apps in New York City, another technological step forward got overlooked. During a meeting at its Beaver Street headquarters last Thursday, the Taxi and Limousine Commission also unanimously voted in favor of new rules for those credit card swipers and "entertainment systems" (scare quotes necessary) in back of your cab, referred to as T-PEP.

Rather than stick with exclusive, bureaucratic contracts--like the ones New York has with VeriFone and Creative Mobile Technologies--competition for T-PEP 2.0 will go free market in February. TLC Chairman David Yassky told us the rule changed was designed to keep vendors competitive and open to new technologies. Because of the barriers to entry with mobile credit card processing, the city would most likely see one or two new players. That still means that Jack Dorsey's mobile payments company Square, which ran a pilot program with iPads in taxis earlier this year, has a chance to become a contender.

But last week's vote didn't signal the end of all the sniping between competitors.

Yesterday, Creative Mobile Technologies (CMT) filed civil action against VeriFone seeking damages in excess of $250 million. The suit charges Verifone with “wrongful, malicious, tortious and contractual breaches” of CMT’s agreement with Verifone, its "exclusive in-taxi advertising partner."

According to a press release from CMT:

Among other things, the lawsuit alleges that VMS withheld financial information from CMT, delayed payments to CMT for certain advertising, refused to pay CMT for other advertising, and violated the agreement’s broad rights of first refusal by installing similar technology and placing advertisements in taxis outside of New York City without first offering those opportunities to CMT as required under the agreement. Such locations include Miami, Las Vegas, Atlanta, San Francisco, South Africa, and London.

TLC spokesperson Allan Fromberg told Betabeat, "This [lawsuit] would have no impact whatsoever on T-PEP," pointing out that VeriFone and CMT "are competitors who have separate and distinct customers." Verifone spokesman Pete Bartolik said the company does would not comment on pending litigation, however he did say that VeriFone will be "active participants" in the revamping the technology in the back of your cab.

Your move, @Jack.

cmtsuit.121712.releasefinal

Mayor Bloomberg and Jack Dorsey during Square's short-lived pilot program.

This morning, on his weekly Friday radio show with John Gambling, Mayor Bloomberg discussed the Taxi and Limousine Commission's vote in favor of a year-long pilot program to test out e-hailing apps, which let riders flag down a cab with their smartphone.

As we noted yesterday, the pilot was a last-minute compromise when it seemed like lobbying from black car and livery car incumbents would prohibit the passage of permanent rules to open up the taxi market to any app with a license. (Black cars and liveries worry that the ability to "pre-arrange" taxi rides with an an app will hurt their business.)  

In his remarks this morning, Mayor Bloomberg mused on some potential pitfalls of incorporating the apps into the taxi hailing experience:

"The mobile phone knows where you are, so in theory you hit a button and any taxi driver that’s on the same app on his mobile phone or her mobile phone can hit a button and say, 'I’m going to come.' What happens if two guys hit a button at the same time? What happens if you hit the button, a guy says he’s coming, and in the meantime some cab pulls up empty--somebody’s getting out? Do you hop in? And what do you do with the first cab guy? Whose obligations are what?"

Overall, however, he advocated for a free market approach, echoing statements made by TLC chairman David Yassky in our interview earlier this week.

"Everyone’s different, I have absolutely no idea which one is better. My sense is always that you should have more than one so the public has a choice and let the marketplace decide."

But things really started to heat up when Mr. Gambling guessed that cab companies and drivers would be into this sort of innovation. Mr. Bloomberg reiterated the example of adding credit card payment options, which came up repeatedly during negotiations as an example of unfounded fears of incorporating new technology.

"Uh. There is a group of cab owners that are opposed to anything, but yeah most cab drivers should like this. They didn’t like credit card use and now they’ll all tell you their tips are up dramatically."

Somehow that segued into a diatribe on corruption in the taxi industry!

"The cab industry is a funny industry. I don’t know if there’s any other place in the world where the city gives a license and the people that have that license can then trade it and resell it and the city doesn’t have any interest and any ability to share in the value going up. And the politics, because they support candidates--a normal market would just say: Well, we’ll just issue more taxi licenses. Wrong! Because they have bought the legislatures and stopped the ability to do that. It is one of the great rip-offs of the public any place I’ve ever seen."

Mr. Bloomberg's agenda for 2013 might be to disrupt medallions, but the rest of us are more concerned about the MTA.

Mr. Yassky.

Tomorrow morning, New York City's Taxi and Limousine Commission will hold a momentous vote at its headquarters on 33 Beaver Street concerning two sets of proposed rules--one of which could radically alter the taxi hailing experience for New Yorkers.

That highly contested proposal calls for changing e-hailing rules that have traditionally given yellow cabs province over street hails, where black cars and livery cabs focus on prearranged rides. If passed, those e-hail rules would open up New York's massive, much-coveted market for yellow cabs to any request-a-ride app that meets guidelines and secures a license.

So rather than having to hail a taxi on the street, these apps will let you flag down and pay for a taxi with a few taps of your smartphone.

The best stat we've seen to support the need for such technology: at a public hearing on the proposal last month, it was estimated that New York taxis only spend 40 percent of their time on duty occupied with a passenger. On the other hand, we can't really picture our mom getting the hang of it, considering she has yet to understand the soon-to-be-extinct "Off Duty" light.

Initially, the TLC tried to solicit e-hailing apps by putting out an request for proposal. Uber, Hailo, Get Taxi, Taxi Magic and Cabulous all applied. But in October, the TLC threw out the idea of bureaucratic RFP in favor of a free-market approach. Once you have the license, there's just the small matter of dominating the competition.

The TLC opted for a similar free-market strategy with the second proposal up for vote, which calls for upgrading the TV screen and credit card swipers in the partition of your taxi (referred to by the agency as T-PEP). Earlier this year, Jack Dorsey's mobile payments company Square ran a pilot program testing iPads in the back and iPhones in the front as an updated alternative. But that program was cut short after the TLC decided to throw out the RFP--once its exclusive contract Verifone and CMT expires in February--in favor of allowing for more competition and, in theory, more innovation with T-PEP 2.0.

We talked to TLC chairman David Yassky by phone to get some insight into what to expect at tomorrow's vote and what happens if the proposals pass. (You can find the TLC's reports on e-hailing and T-PEP 2.0 presented at last month's public hearing embedded below.)

An open-market approach could mean a lot of change for taxi riders in New York. I was wondering if you had a sense of what to expect if there are multiple T-PEP vendors and multiple licensed apps. How do you see that rolling out?

On T-PEP, there are two companies that do this work today in the taxis. I don’t think you’ll see a big influx of other companies looking to compete in that market. It’s a specialized product; it’s not as easy as it looks. If it was just credit card processing, then there are plenty. But it’s mobile credit card processing in a taxicab. It involves a lot of support equipment that’s part of the same system--text messaging to the drivers, trip records that we rely on for our enforcement and lost property, so it’s got to be accurate. I guess I think that the reason to move from a contract to a set of standards is so you allow for the possibility of competition. I think that will keep the pressure on the existing companies to keep serving their customers well and keep coming up with improvements, even. But you may not even see any new entrants, or maybe at most one or two.

But even if Square came into the picture, that would mean something very different in terms of iPads in the back of taxis.
It does open it, and you may see another competitor and with that innovation, so that would be good. Just to be realistic about what to expect, I don’t think it’ll be "a thousand flowers bloom." The barriers to entry are significant. It’s a fair amount of hardware you have to put in the taxis.

And what about the app side?
That’s the classic environment for a tech startup. I think to have a successful one, you need a certain amount of market penetration, but you can get up and running with a certain amount of investment. The market is untried and untrodden, so nobody quite knows what appeals to customers. So there I expect you'll see a decent number of competitors.

I was talking to Jay Bergman, the New York CEO of Hailo, who suggested at the public hearing that there be universal integration to help app providers who want to work with, say, three T-PEP vendors. Is that something the TLC is inclined to stipulate?

There are two different issues. Sometimes standardization helps a market develop. Like with what used to be called videocasette recorders and then used to be called DVD players. Sometimes a standard helps competition flourish, right? Maybe a better example would be Apple's approach to their iPad and iPod products, where you let a lot of other companies play on your platform. So we do want to make the T-PEP system available as a platform for apps to utilize. That's part one. But another reason to prescribe ways of doing business is customer protection. So, for example, we want to make sure that the fare that is on the meter ends up being the fare that is charged to the passenger. What we're trying to do in our rules is do both those things: make T-PEP a platform that's available, but not restrictive for app developers, and at the [same] time have some basic level of restrictions that are necessary to insure customer protections.

Another thing Mr. Bergman brought to my attention, which was also mentioned in the public hearing, was downgrading e-hailing to just the idea of a broadcast technology that puts out a beacon for riders in search of cabs, but doesn't actually connect them with taxis. The notion was put forth by some of the incumbents, so you're just broadcasting a rider's location.

Look, if we're gonna bring e-hailing apps to New York, we're gonna do it right, and we don't want a kind of half measure that won't provide real service to customers. What customers want is to be able to send a signal out to taxis and then know if a taxi is coming. You don't want a customer not knowing, saying, "Huh, here's an empty cab just went by, should I get in it, or wait for the guy who's on his way to get me?" For the system to work, the customer needs some feedback from the driver. We don't prohibit that, we absolutely allow the broadcast model too. Maybe customers will provide that. Our general approach is the customer knows best what he or she wants and what works for him or her.

Are you at all concerned about fragmentation in the market? If you look at mobile payments apps like Square Wallet, for example, everyone from Dunkin' Donuts to Walmart has their own app and that's led to maybe less adoption than you would have seen if there were one dominant player.

I figure that's really one where the market sorts it out.

Apps also offer different payment structures in terms of what they charge for their service. Uber, for example, initially wanted to take a percentage of a 20 percent gratuity to drivers. 

On this front, we just want to make sure there is full disclosure to the customer. So if the customer thinks that he or she is tipping $3 to the driver, you want that $3 to go the driver. You want the customer to know what they're paying for the taxi fare itself, which better be what's on the meter. If they're tipping, you want the passenger to fully understand what their tip is, and if there's a service fee or surcharge that the app is charging, you want the customer to understand that.

Do you have a sense of the commissioners' openness to these proposals?

I've gotta tell you, this has been really one of our best debates. We've had a really full and searching debate on the substance and merits, and there are arguments both ways. The taxis in New York work pretty well. Whenever we're considering an improvement, I think the the argument "it ain't broke, so don't fix it," is something you want to take seriously, right? The taxi system works really well for the 600,000 people a day that taxis transport. This has been one where we fully vetted the arguments about possible disruptions to that existing service, but I think weighing appropriately the opportunity for improvement. There's not unanimity of opinion about how to weigh the pros and cons here.

There has been significant opposition from industry incumbents. Do you think there's a chance that this could end up in court like the plan for borough taxis?

I think, like with borough taxis, the basic idea is quite sound. In the end, sound ideas generally win out.

How much has the mayor been involved with these proposals?

This started because the TLC put out these proposed rules as part of the Bloomberg administration’s overall communications to keep New York City at absolutely the forefront of technology acceptance and embracing it.

There has been some debate about whether it's the TLC’s job to protect one market segment, like livery cabs, from being hurt by innovation. App companies have complained about heavy lobbying against their product. In public testimony, the TLC has said that’s not their responsibility.

That’s part of the process. We should absolutely expect that business will try to protect their interest and make argument to regulators in service of their interest, and sometimes public policy does coincide with one or another’s interest and sometimes it doesn’t. We should expect that companies will be vigorous advocates for themselves. When I see that phenomenon, which I do frequently, I’m not surprised. I’m sure you’re not surprised either.

I think the commissioners have done a good job hearing all sides. What you termed ‘incumbent,’ are businesses open in New York City that employ New Yorkers. Their viewpoints are entitled to respect, and regulators would be doing a poor job if they didn’t listen. That doesn’t mean that you automatically accept them. Oftentimes businesses know better how a proposal will affect them than a regulator does.

Have you tried out e-hailing apps for black cars, like Uber?

I personally have not, although several TLC employes have, so I’ve been able to get their sense [of the] customer experience.

What did they say?

I, uh, the reason I don't want to answer that question is that we’re not advertising for one company or another. I can tell you which of the two pizza places near 33 Beaver Street employees prefer, but I would have to tell you off the record.

E-Hail Commission Presentation FINAL

TPEP 2.0 Presentation JR v3

(Photo: Yellow Cab NYC)

It's a secret point of pride for experienced New Yorkers that we know how to properly parse the mystifying taxi light system. It gives us a leg up over tourists, who spend so much time trying to differentiate between the Available and Off Duty lights that by the time they realize the cab is free, a local has already settled into the backseat.

But now, the Wall Street Journal reports that the Taxi & Limousine Commission has voted to revamp the baffling system: during scheduled taxi inspections between January and April, all taxis will be outfitted so that their signs only display one light when they're available. When they're taken or off-duty, the sign will be dark.

"From the point of view of the person on the street, they just need to know I can stick my hand up and flag it down," said TLC Commissioner David Yassky at the meeting, prior to the vote.

The TLC discussed the change during the same meeting in which they addressed Uber's longstanding e-hailing battle, though voting on that decision may be a long ways off. The TLC's Beaver Street office is still being run off of a generator after losing power during another large public meeting, during which attendees had to exit by walking down 19 flights of stairs.

Revamping the complicated light system should go a long way towards making a cab easier to catch. Mr. Yassky said the new system just makes "plain, common sense."

Still, some New Yorkers are rather disgruntled about the leveled playing field. "New York is not supposed to be easy," a certain Betabeat reporter angrily Skyped. "Tourists are supposed to get lost."

Additional reporting contributed by Nitasha Tiku.

(Photo: Wikimedia)

"We got a love letter from the TLC," Uber CEO Travis Kalanick just told Betabeat over the phone. He was referring, sarcastically, to a statement issued today by the Taxi and Limousine Commission to "remind" medallion yellow cab drivers and owners that the TLC "has NOT authorized any electronic hailing or payment applications ('apps') for use in New York City taxicabs."

The TLC's statement (pasted below) is clearly a direct response to Uber's thwarted attempted to launch an app to digitally hail and pay for yellow cabs in New York City. (Uber already operates a separate request-a-ride payment app for private black cars in New York.) "Basically it's saying that Uber can't do credit card processing, that's what it's saying, as far as I can tell," Mr. Kalanick told Betabeat. "If we don't do credit card processing and the drivers are stopped when they get the pick up request, we'll be okay," he added.

Uber will still be permitted to offer New Yorkers a free taxi ride worth up to $25 (the deal expires next Tuesday), the TLC told Betabeat, but drivers will be penalized by fines or suspension if they use the app for payment.

Check out our interview with Uber about its plan for a New York City taxi service that only costs a 20 percent tip.

The issue is around the TLC's existing contracts with Verifone and Creative Mobile Technologies, the companies that power the entertainment screen and credit card processing on the partition of your taxi. The exclusive contracts are around running the screen and the credit card swipe, referred to internally as the Taxi Passenger Enhancements Program (TPEP).

A representative from the TLC clarified Mr. Kalanick's interpretation, noting that, "Due to contractual obligations, payment apps cannot be used while the existing technology contracts are in place. However, we intend to update our regulations to reflect new innovations and new realities by February when existing contracts expire," adding, "We don't approve or disapprove apps."

The TLC rep said this will does not affect the agency's plans to go forward with a smartphone app RFP. Earlier this year, Uber was one of at least four companies to respond to a request for an app that lets riders pay for cabs with their phone. As stipulated in the RFP, any app approved will be fully integrated with TPEP and existing vendors, so there is no regulatory issue there.

By February, when decades-old rules governing the TLC are updated, we might well see other options enter the market. The TLC seems less resistant to change than hampered by existing rules and contracts.

Mr. Kalanick said he intends on fighting this, regardless. "Our attorneys still say that credit card processing is totally legitimate and we should be able to do this," he insisted. "We believe we are totally legal."

In an earlier interview with Betabeat, Josh Mohrer, Uber's general manager in New York City said, "You can't really RFP your way to innovation."

Mr. Kalanick said Uber has a couple different options in terms of proceeding with its plan for a taxi app in the immediate term. "We can offer it for free. Or Uber can help you get the car, but then you'd have to pay normally inside the taxi," he said, adding, "But still our attorneys tell us that we should be able to process credit cards, that we're not breaking anything regulatory or in contract."

He characterized negotiations as still in flux. The point of giving New Yorkers a free option, was to allow time for "the TLC to digest bringing this innovation to market," he said, noting, "This is moment by moment, this is a very fluid situation. In a week things can change."

Immediately after the TLC issued its statement, Mr. Kalanick had a more candid take on the TLC's comments: "This makes New York a worse off place," he said, "People are more likely to get stranded in outer boroughs, and taxi drivers will have a harder time making minimum wage. This looks like a regularity regime resisting change, but without the regulations to back it."

This post has been updated to reflect breaking news. 

Here is the TLC's press release:

TLC Commissioner/Chair David Yassky………..

“The TLC is eager to pave the way for taxi riders to take advantage of the most up-to-date technology, including smartphone apps that may help passengers locate available taxicabs more quickly.  However, current contractual agreements between the TLC and payment processors restrict the use of apps.  We intend to quickly begin a rulemaking process that will permit broader use of apps when these contracts expire in February.  As part of that process, we will work collaboratively with the livery, black car and taxi industries to address their concerns about the impact of apps on existing business models and to ensure that our rules provide full protection to passengers. In addition, we are currently requesting proposals for a smartphone payment system that will integrate with our existing technology. Time and again, New York City’s Taxi and Limousine Commission has led the country in terms of putting new technology to work for riders and we are eager to see products that allow taxi passengers to take advantage of the latest innovations.”

NOTE: The notice below will communicate to our regulated industries the relevant current requirements, in advance of our commencing the rulemaking mentioned in Commissioner Yassky’s above statement.

 

Electronic Hailing and Payment

 

The New York City Taxi and Limousine Commission (TLC) reminds medallion taxicab drivers and owners that it has NOT authorized any electronic hailing or payment applications (“apps”) for use in New York City taxicabs.

In light of the recent release of applications which may permit the electronic hailing of taxicabs and payment of taxi fares, including a release by UBER, taxicab drivers and owners are reminded that:

• Taxi fares must be accurately entered into the TPEP system.  A passenger paying by credit or debit card must use the TPEP system.

• TLC rules also require that medallion owners maintain accurate trip records; if a driver accepts payment of taxi fares through a payment app not connected to the TPEP system, the trip records will not be accurate and the medallion owner will be summonsed.

• A driver cannot charge a passenger more than the fare on the meter for a taxi ride.  If a driver uses a payment app that charges the passenger more than the fare on the meter for a taxi ride, the driver is responsible for a passenger overcharge.

• A driver must not use any electronic communication device, including a cell phone or smartphone running a hail or payment app while operating a taxicab.  Any driver using such a device at any time except when the taxi is legally standing will be summonsed.

Drivers and owners are reminded that violations of Commission rules can lead to fines and, in some cases, the suspension or revocation of their TLC license.

(Photo: Wikimedia)

Update 9/6/2012: The TLC just issued a statement reminding drivers they are not authorized to use digitally hailing or payment apps. Uber CEO says, "We believe we are totally legal.”

Check out our interview with Uber about its plans for taxi service New York City.

Earlier this afternoon, Betabeat broke the news that Uber planned on launching a request-a-ride app for yellow cabs in New York City that would let riders digitally hail and pay for taxis with their smartphones. The company already offers a similar service here for private black sedans and SUVs.

However, Uber's plan ran into some delays as the New York City Taxi & Limousine Commission tried to make sure that it complied with city rules and payments regulations.

As Uber tries to resolve those concerns with the agency, CEO Travis Kalanick has decided to offer the yellow cab option for free for the next week to give riders "a taste of the future," The New York Times reported.

Josh Mohrer, general manager of Uber NYC, told Betabeat the offer begins at 8 a.m. Wednesday, September 5, and ends at 11:59 p.m Tuesday, September 11.

"We're giving a free ride to every New Yorker," Mr. Mohrer told Betabeat by email. "Starting tomorrow you'll be able to request a taxi from the app, and the ride you take will be free, up to $25. After your ride is over, the taxi request option won't be available for a week, because we want to give everyone a try."

That's one way to flood the market with Uber fans before Hailo, London's answer to a taxi app, comes calling in a couple weeks.