Since 2010, the New York Independent Livery Driver Benefit Fund (NYILDBF) has been operating, as intended, by providing a mechanism for livery drivers who are injured while on a dispatched call to receive lost wages and medical benefits.

The NYILDBF created a well-defined balance. Livery base owners would know what their financial responsibility was (now $195 per affiliated) vis a vis the drivers. Also, drivers would no longer be subjected to many years of litigation and ad hoc adjudication of their entitlement to certain benefits.

The NYILDBF had to find an insurance policy that fit the unique scope of coverage needed without placing too high a financial burden on livery bases. When the Livery Fund Law (Article 6G of the New York State Executive Law) went into effect on January 1, 2010, there was no need to cover black car drivers because the Black Car Fund was already in existence and was providing benefits to black car drivers. This was also back in the day when a base could only send dispatches to drivers of vehicles affiliated with their base.

A great deal has changed in the for-hire vehicle (FHV) industry since 2010. Over the past 11 years, we have seen the emergence of Uber and Lyft, the proliferation of apps, e-hailing taxis, massive amounts of new regulations by the TLC and a cap on the number of FHVs. One item that changed the landscape was the TLC’s removal of the prohibition on cross-class dispatch.

In 2015, the NYC Taxi & Limousine Commission (TLC) amended its rules to permit cross-class dispatch. Thus, for the first time, livery bases could dispatch to black cars and black car bases could dispatch to liveries. For black car bases, this was not so much of a big deal because there was already a massive number of black cars on the road. It was also not so much of a big deal for livery bases because at the time there were approximately 28,000 liveries on the road.

A problem did eventually arise for the livery industry. From 2015 to 2018, the number of liveries decreased from approximately 28,000 to under 15,000. Today there are less than 9,000 liveries. Such a dramatic loss in the number of liveries means that the pool of available drivers shrank to a devastatingly low level.

In an industry that is based on supply and demand, if there is not enough supply of drivers, then livery bases are unable to satisfy the transportation needs of their customers. If a livery base cannot satisfy the demands of the consumer, those consumers will call another livery base. When no livery bases can satisfy the demand, the consumer will call black car bases.

To stay afloat, many livery bases started to send dispatches to black car drivers. While this sort of dispatch is now legal, it also comes with the requirement for the livery base to pay sales tax on all such dispatches to black cars. Remember, the sales tax exemption for livery bases only applies if a livery base sends a dispatch to a livery and not a black car.

When the NYILDBF was created, the per vehicle cost of membership took into consideration only the risk of an accident for livery bases dispatching to livery drivers. With the proliferation of dispatches from livery bases to black car operators, the risk profile for the NYILDBF dramatically increased.

On December 29, 2021, the Workers’ Compensation Board enacted emergency regulations that redefined the definition of an independent livery driver. The new definition includes a black car operator when the black car operator is dispatched by an independent livery base. (See 12 N.Y.C.R.R. Section 309.3(a)(1).) The emergency regulation also created a new regulation that expanded the required contributions to the NYILDBF. 12 N.Y.C.R.R. Section 309.4(1) states that annual contributions to the NYILDBF by independent livery bases are to be calculated using the number of liveries affiliated with each livery base and a per-ride surcharge for all dispatches from a livery base to black car drivers.

All member livery bases were notified of this new surcharge. All member livery bases were also notified of the NYILDBF’s new trip record portal whereby all members would be REQUIRED to self-report all dispatches to the NYILDBF on a monthly basis, in an identical format to the submission required by the TLC. Absent a member providing this data to the ILDBF, all such bases will be charged the 21.5 cents per-trip fee based on NYC Open Data, which only identifies the affiliated base, but does not provide the vehicle information. Thus, members failing to provide the data to the NYILDBF may not enjoy the benefit of the $195 Cap per vehicle. Additionally, due to the delay in TLC posting of data, members were notified that the NYILDBF will charge any base that does not self-report, an estimate based on prior months’ NYC Open Data numbers. Thus, providing the monthly report to the ILDBF is beneficial to all ILDBF members.

As of early May 2022, approximately half of all 368-member livery bases created an online account to upload their trip records. This means that the other half of all members will be charged based upon information from NYC Open Data, and they will not get to enjoy the benefits of the Cap.

From my review of the data, over 50 member bases sent dispatches to black cars in the first quarter of 2022. In mid-May 2022, a bill was sent to all member livery bases for their quarterly installment payment, along with a charge for any dispatches to black cars. Failure to pay such bill will result in cancellation of their membership in the NYILDBF.

In a nutshell, the days of livery bases dispatching to black cars without cost are over. When the bases that sent dispatches to black cars in the first quarter of 2022 get their bills, some may get sticker shock. Those questioning the bills they receive for dispatching to black cars need only look and see if they uploaded their trip records to the NYILDBF portal. If you did, then you can review your own records to confirm the charges. If you did not upload your trip records to the NYILDBF portal, then you may look to NYC Open Data for the answers to your query.

The livery bases that continued dispatching to black cars after January 1, 2022, without paying attention to the cost will have to consider if the cost is worth it. For many, the payment of the 21.5 per black car dispatch along with the sales tax to the State is worth it to have an increased supply of drivers available to satisfy the demands of their customers. For those who find the cost too high, they may have to go back to dispatching only to livery drivers.

While the livery industry can certainly use a waiver or relief from the Cap to bring the level of livery drivers up to at least pre-COVID levels, for the moment, we are where we are. We must work within the confines of the marketplace that currently exists. As always, each livery base must compete by complying with the law.

I cannot reiterate enough how important it is for each livery base to create an online account to upload their trip records so they may enjoy the benefit of the Cap that limits the charge for dispatches to any black car vehicle to $195. If you have not registered yet, you may do so at: https://www.newyorkliveryfund.com/trip-records-portal.

In order to stay up to date on all developments mentioned herein, I recommend that each owner and/or officer of each livery base send me their name and email address so we can add your base to our email blasts which will contain valuable information on this new surcharge, the data reporting requirements and other important news on the livery and for-hire vehicle industry. You may be added to our email list by providing your information to us at: http://www.shankerlawfirm.com/questions.

As always, my law firm and I remain committed to aiding each and every member livery base in understanding these new regulations as well as how to register, upload reports, and the basis upon which bills for this new surcharge are based. We are committed to ensuring that the livery industry remains not only vibrant and competitive in the marketplace, but also compliant with all New York State laws, rules, and regulations.