Do the NYC Taxi and Limousine Commission Proposed Rules Exceed the Scope of The Commission's Authority?

On May 28, the New York Taxi and Limousine Commission (TLC) will hold a hearing on its proposed rule changes which set forth a number of stringent requirements for  FHV Dispatch Applications (i.e. ride-sharing apps like Uber, Lyft, etc).   The TLC’s purpose for these regulations is to ensure uniformity in FHV (For Hire Vehicicle) apps, making sure riders’ data is secure, payments are transparent, and that all riders are treated equally. 

 

However, the proposed changes, if adopted, will be very cumbersome on the NY ridesharing economy.  Of the proposed rules, the most interesting is buried on page 23 at §77-05(g), which requires the ridesharing company to obtain approval for any modifications or updates to their software by submitting a long list paper work to demonstrate compliance with TLC requirements.  This is absurd. 

 

Think for one second logistically about the perils of this requirement.  If this goes through, we’re going to have the TLC, which was created in 1971 for the purpose of regulating the NY Taxi industry, examining computer software and determining whether it meets certain requirements?  Are they planning on hiring a horde of software devs to examine the software to make sure its up to snuff? 

 

Next, let’s think about the logistics of updating software in this context.  Companies usually update their software to fix bugs, security flaws, make improvements, etc.  Say a ridesharing company wants to make a quick fix to bug in their software that was discovered overnight, according to the proposed regulations, they would need to seek permission from the TLC before releasing the update.  There is a provision in the proposed rules that allows for a waiver of this requirement, but even that requires seeking permission from the TLC Commissioner in writing. 

 

“Dear Commissioner, please let us update our software tomorrow, we discovered a critical security flaw and have patched it, please let us.”  Let your imagination run wild with the problems this poses. 

 

It’s no wonder that the Internet Association sent a letter to Mayor de Blasio, urging reconsideration of the proposed rules.  If the proposed rules go through, it is possible that we may see a challenge to the TLC’s authority to pass these rules.

 

Arguably, the TLC has limited authority pursuant to Title 35 of the Rules of the City of New York to promulgate regulations of this nature.  There’s likely enough at stake here for some of the key market players to come together and challenge the proposed rule. 

 

We’ll have to wait until after May 28 to find out, I plan to check out some of the hearing since it’s literally a block from my office. 

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