The Port Authority of New York and New Jersey (PANYNJ) is one of the last major airport authorities in the country that does not have a ground transportation permit and/or an access fee system in place for taxicabs, for-hire vehicles (FHVs) or Transportation Network Companies (TNCs) at any of its three major airports: John F. Kennedy, Newark, and LaGuardia.
The PANYNJ is a bi-state agency created in 1921 by an interstate compact between New York and New Jersey for the purpose of – among other things – operating public transportation terminal facilities on a self-sustaining basis. This means the PANYNJ is self-funded and does not rely on taxes or funding from New York or New Jersey. To obtain funding for its operations, the PANYNJ generates revenue from businesses that use the airport facilities. This includes not just passengers and individual users of its facilities, but also FHVs that want access to the terminals.
As far back as 2015, the PANYNJ started having discussions about implementing access fees for FHVs. The proposal was to implement access fees to pay for upgrades to help it manage traffic and to pay for infrastructure improvements. After its initial meetings in mid- to late-2016, the Port Authority started distributing what it described as a “final” privilege permit that was set to go into effect in 2018
Some of the provisions in that “final” privilege permit included:
- An initial fee based on the average number of monthly pickups for the first six months. The initial fee ranges from $200,000 for FHV companies averaging 100,000 or more monthly pickups during the first six months, to $5,000 for companies averaging less than 1,000 monthly pickups per month.
- A $4/pick-up and $4/drop-off access individual trip fee
- A security deposit of 1.5 months of the projected access fees
- FHV companies are required to maintain all trip records to the airports for five years after expiration of the permit or five years after the completion of any litigation that might arise
- FHV companies are required to exercise strict control over their vehicles and the ability to geo-fence so that FHVs only receive dispatches in designated waiting areas
- Insurance: $1 million in liability coverage is required for New Jersey registered vehicles; $100,000/person and $300,000/incident in primary automobile liability coverage is required for New York registered vehicles. These requirements mirror NYC Taxi and Limousine Commission (TLC) regulations.
- The Port Authority can conduct audits and add fines for shortfalls
At the time, the Livery Round Table (LRT) elicited support form then New York City Public Advocate, Letitia James, to contact Governors Cuomo and Christie to express serious concerns about the privilege permit. First, initial fees ranging from $5,000 to $200,000 would place a significant burden on smaller bases, potentially shutting new entrants out of the marketplace, discouraging growth, and putting unsustainable pressure on an industry that was already reeling from marketplace changes and a byzantine regulatory structure. Smaller companies were already struggling to make ends meet and simply would not be able to come up with the ready capital to pay for an initial fee.
Next, any decrease in the availability of private transportation is problematic because, when it comes to airport access, many New York City neighborhoods and surrounding towns and municipalities (both in New York and New Jersey) lack convenient public transportation options. Therefore, any measure that limits the options for area-residents trying to get to the airport raises concerns. Moreover, New Yorkers cannot afford to have another fee tacked onto their transportation costs. Given the lack of adequate public transportation options, the LRT believed government should not further burden its citizens by making the only convenient way to get to their airports more expensive.
Luckily, 2018 came and went with no privilege permit being implemented. We all know that not only did COVID-19 hit us in early 2020, but that the FHV industry was hit hard with some businesses losing up to 90% of their revenue due to the substantial decrease in travel from the pandemic.
To date, most if not all of the FHV bases and drivers have still not fully recovered from the effects of COVID-19 – and in all reality, there is still no end in sight. Airport access is a serious issue, not just for the FHV industry, but also for the people of New York and New Jersey. If their options are going to be limited and their costs increased, they deserve a chance to weigh in. The same is true of businesses that access the airports.
In late October 2020, the LRT became aware that the PANYNJ had been meeting with select FHV companies and trade industry organizations to discuss a new proposed privilege permit. As a result, Avik Kabessa, a founding member of the LRT, and myself, as its counsel and executive director, reached out to the PANYNJ to determine the status of the pending discussions and to inform the PANYNJ that it is only fair for the livery industry to be part of the discussions, as we are in the same boat as the black cars and TNCs.
Despite the decline of business in the traditional for-hire (limo, black car and livery) and taxicab industries, due to the unprecedented growth of Uber and Lyft, the writing was on the wall. The PANYNJ was again taking up the access fee issue due to their own decline in revenue, as a result of the ill effects of COVID-19. Their own shortfall and need for infrastructure upgrades made it extremely unlikely that the permit fee would be defeated or even stalled pending a rebound of the ground transportation business. So, we did what we could do – which was to fight for fairness, to ensure a plan was implemented where the PANYNJ received its desired new source of revenue, but not to the point where it would destroy the liveries or the FHV industry in general.
While the LRT is still working on hammering out the final details, the discussion with the PANYNJ remains open and amicable. More importantly, the PANYNJ has agreed in principle to the following:
- Eliminate the requirement for bases to pay an initial fee
- Eliminate the requirement that bases who use a mobile application have geofencing technology so that FHVs can only receive requests for pre-arranged trips originating at the airport while physically located in the designated waiting areas
- Eliminate the Digital Driver Profile which would have required bases that use an FHV mobile application to have a Digital Driver Profile for each FHV Driver that could be viewed at all times on the FHV Driver’s mobile device
- Eliminate the requirement that bases that use an FHV mobile application also have a technology feature for real-time monitoring of FHVs
- Enable bases who rely upon mostly cash payments from passengers (including, but not limited to corporate accounts) to be eligible to submit quarterly payments, with the written approval of the Port Authority, as opposed to monthly payments
- Eliminate the requirement that bases have a policy of commercial automobile liability insurance for coverage of each vehicle it dispatches in the minimum limit of $5 million for each occurrence
Bases will still have to collect and remit to the PANYNJ an Access Fee of $2.50 for each drop-off and $2.50 for each pick-up. For shared trips, where an FHV may pick up or drop off multiple passengers after passing through the Geofence boundary one time, a discounted Access Fee of $1.25 shall be assessed for each pre-arranged shared trip. Also, each base will have to submit monthly reports to the PANYNJ along with their monthly payments, unless the base relies upon mostly cash payment from passengers and obtains the written approval of the Port Authority to submit quarterly reports of each trip with its quarterly payments. Fortunately, the required reports will be in a similar format to those that the NYC TLC already requires each base to submit.
Most importantly, the compromises that were reached treat all Non-High Volume FHVs equally. Thus, the liveries and traditional black cars were given a break. Uber and Lyft will still be subject to the more onerous requirements mandated by the PANYNJ. Smaller bases will still have to collect and pay the same access fee without having to spend monies on technology that they do not currently have and which they cannot currently afford. In the end, it is the customer that will be paying the fee as bases will pass the cost of the access fee along to those people who obtain for-hire transportation.
In sum, livery industry stakeholders should be thankful that the LRT stepped in to ensure parity in the FHV industry. For once, the livery industry will not be required to comply with costly and burdensome technological requirements that Uber and Lyft can easily comply with. In the end, the PANYNJ was willing to open the lines of communication with the LRT, listened to our concerns and made changes to apply these new requirements with thoughtful consideration for the macro-challenges being faced by liveries outside the airports.
One thing is for sure. The dawn of a new era has begun. While the TLC has massive regulatory requirements, the PANYNJ simply wants access fees to fund its operations. The revenue generated by these fees will enable the PANYNJ to operate its airport facilities without placing undue regulatory burdens on the sectors of the industry that are in need of a break for a change.
While the fees to be charged by PANYNJ will cost FHV riders more money when they travel to and from NYC airports, we can only hope that over time the involvement of the PANYNJ will be only to ensure the collection of fees to fund their operations and that the PANYNJ will not become the regulatory behemoth that the TLC has become.