Taxi Smartphone Apps Seen As Threat to Street Hails
NEW YORK — Smartphone apps that allow passengers to hail yellow taxis could divide the city into those who can afford to pay a premium to get a ride and those who cannot, elected officials argue.
A number of companies are looking to break into the yellow cab industry with smartphone apps that would let New Yorkers hail a taxi without having to wave one down on the street. But yellow cabs are banned from making prearranged pickups, raising questions about the legality of hailing apps. Drivers of yellow cabs also aren't supposed to use electronic devices while in transit.
At an oversight hearing yesterday, members of the City Council also questioned whether smartphone apps were necessary or even fair.
"We cannot have a two-tiered taxi system in this city, where people with money pay a premium to get a cab, and the rest of us are left out," said City Councilman James Vacca, chairman of the transportation committee, during the hearing.
He said the use of smartphone apps to hail taxis could "change the game for passengers on the street" because drivers could refuse service to pedestrians and blame it on an "app call" — especially if it meant a ride that would be more profitable.
"How are we not to think that cab drivers won't respond to those using apps because there will be a higher fare?" he said later in an interview with Gotham Gazette. "If we allow those with apps to be charged more for a cab rider, then how are people who are going to hail going to be treated equally?"
He said that could be a particularly pernicious problem in the outer boroughs, where yellow cabs are rare and residents might be less likely to own smartphones.
"It could pose a have and have-not dilemma, which I would not encourage," he said. "There has to be an assessment of how we prevent that from occurring."
The use of new technology in cabs is one of Vacca's key policy priorities this fall as chairman of the transportation committee, particularly legislation (Intro. 599) to make the credit card payment system in yellow taxis accessible to people with visual impairments. Advocates testified at the oversight hearing in support of the bill.
"I want to make a contribution. You know, my father was blind for the last 30 years of his life," Vacca said.
But it was the question of whether to allow hailing from smartphone apps that some Council members saw as having the potential to upend the way that yellow cabs have traditionally been required to do business — by picking up passengers who flag them from the street.
"There's a reason why we don't allow you to use a telephone to call a cab. That's because we want cabs on the street to be available to be hailed," said Councilman G. Oliver Koppell to Ashwini Chhabra, a deputy commissioner of Taxi & Limousine Commission who was at the hearing representing the agency that regulates the city's more than 13,000 medallion cabs.
Chhabra made the point that he didn't personally see the purpose of smartphone apps for getting a cab. "For me it's just as easy to go outside now and stick my hand out and get one," he said, but added that consumers should have the option if they wanted it.
Koppell said the use of apps could potentially destroy the use of street hails. "I think this whole idea of allowing you to call is frustrating one of the hallmarks of New York, which is just like you said, that most of the time you can hail a cab," he said.
Livery cabs, the black cars that are popular in the outer boroughs where yellow cabs rarely appear, are allowed to respond to calls and have already begun using some types of smartphone software, Chhabra said.
In testifying at the hearing, he said the TLC was keen to revisit the issue of whether to allow "e-hailing" apps and promulgate rules, seeing potential in the software to improve the experience in riding in cabs for passengers and to help drivers increase the number of hails. Rules could be issued as early as October (separately, he said the agency had put out an RFP calling for companies interested in developing payment software for mobile devices.)
The legal limbo for taxi apps hasn’t stopped a number of entrepreneurial companies flush with cash from making plans to enter the New York City market.
One of these companies, Hailo, became operational in the city six months ago after successful launches in London and Dublin. In London alone, the company says it has signed up 30 percent of the city's 23,000 cabbies. And the company has big ambitions for North America, where it also plans to expand in Toronto, Chicago and Boston.
Jay Bregman, CEO and founder of the company, said the idea of Hailo is to “complement” street hails by creating more opportunities for drivers by filling in those hours when they are roaming for passengers. “We are not trying to dominate the driver's day,” he said, adding that, in London, street hails "have not been affected at all."
Hailo's model works by getting cabbies to register as members of its exclusive network, which, in the case of New York, passengers will have to pay an upfront fee to access. Bregman said the fee is collected outside the cost that shows up on the meter.
"What we aim to do is provide services where a proprietary network has access to really great drivers," he said. "That's one of the great compliments people say in London — that hail seems like a better drive than you can usually get."
He said that 3,500 taxi drivers had pre-registered to be part of its network in New York City.
In his testimony at the hearing, Chhabra said that the TLC conducted a survey in the back seat of taxis in recent months and found that almost 70 percent of passengers own a smartphone. He said 50 to 60 percent responded that they wanted to hail taxis with their smartphones. He did not say how many people responded to the survey.
But he said there were other reasons why these services could provide positive improvements for customers.
"They may assist passengers late at night when there are fewer taxis cruising," he said. "They may also serve to reduce driver reluctance to take trips out of Manhattan, if drivers think these apps can provide them with a greater prospect of finding a passenger for the return trip."
The Drama Behind the Bike Share Delay
NEW YORK — The firm picked by the city to run what is meant to be the nation's largest bicycle share program has been dogged by questions about how it got a contract to run a similar system in Chicago, while its partner is being sued by a key software developer.
City officials announced last week that the much-anticipated bike share program would be delayed from its expected roll-out this summer to March 2013. Mayor Michael Bloomberg blamed the system’s software. “The software doesn’t work. Duh,” Bloomberg said on his radio show. “We’re not going to put it out until it does work.”
There may be a good reason why the software doesn’t work: It’s unfinished. According to the city official in charge of the recently launched bike share program in Chattanooga, Tenn., which uses the same platform, the software is undergoing “ongoing development.”
"There's still work to be done — features to be added — and that's where we are at the current time," said Philip Pugliese, of Bike Chattanooga.
Chattanooga's program only involves 30 bike stations and 300 bicycles. In New York, plans originally sold to the public called for 10,000 bikes at several hundred stations.
Pugliese said that while the Chattanooga system is operational and the software is able to complete transactions, there is a delay in the time it takes for transactions to be completed.
"The software probably wasn't robust enough to complete transactions in an operation your size," he said, referring to New York City.
Portland, Ore.-based Alta Bicycle Share, which was awarded the contracts for both Chattanooga and New York City, did not respond to emails and calls requesting comment for this story.
In September 2011, the city awarded the contract for the bicycle share program to Alta, which had worked with its Canadian-based partner, Public Bike Share System Company, to successfully deploy similar systems in Washington, D.C., Boston and elsewhere. Four months later, PBSC ditched the software that provided critical technology for the system and began developing its own.
"To this day, we don't understand, why are you doing this? You can not just remove the heart and the brain," said Isabelle Bettez, president and CEO of Montreal-based 8D Technologies Inc., which developed the original software for the bike share program.
She said that it appeared that Alta Bike Share and PBSC were selling the infrastructure 8D developed to Chicago and New York — and then attempting to install something entirely different as if it didn't matter. She claimed the 8D technology solution comprised over 60 percent of the total bike share system infrastructure — from payment security and wireless solutions to the solar panels that power the kiosks.
"New York would be up and running now without any flaws,” she continued. “We shouldn't even be talking about this now.”
This past April, 8D Technologies filed a $26 million lawsuit against PBSC for ending their relationship and hiring an American firm to develop new software for the systems in Chattanooga, New York and Chicago. PBSC countersued for $2.5 million, saying 8D overbilled for its products. PBSC didn’t respond to requests for comment.
The American firm that PBSC hired, Hopkinton, Mass.-based Personica Inc., also did not return calls or email messages requesting comment.
Alta Bicycle Share was supposed to have had at least 1,000 bikes on New York City’s streets on or before July 31, according to its contract with the city. Unlike most other Alta cities, taxpayers aren't on the hook for the costs of the program, thanks to sponsor Citibank, which ponied up $41 million to get the program rolling.
Still, the much-hyped program has been a topic of discussion, debate and now scrutiny as New York's greenest mayor ever makes bold attempts to turn the city into a bike-friendly utopia.
In an August 17 Wall Street Journal interview, New York Transportation Commissioner Janette Sadik-Khan suggested that the city was surprised by the problems with the bicycle share software. "We thought that there would be a substantial transfer of the Washington/Boston software capabilities, not a total rewrite, which is why we thought a July launch was feasible," Ms. Sadik-Khan said. "But it turned out it's not just a software upgrade."
In April 2012, the Chicago City Council approved a plan to hire Alta for that city's bike share program. Like New York, the Chicago program has been delayed until next year. But unlike New York, city officials in the Windy City are not attributing the delay to technology.
"Our program didn't really have any software issues or anything like that," said Tom Alexander, a spokesman for Mayor Rahm Emanuel, adding that he didn’t know whether the software that would be used in Chicago was the same as New York City’s.
Instead, he attributed the delay in Chicago to a need for more planning and the advent of winter, when cycling is more difficult. "We just felt like we needed a bit more time to make sure all the infrastructure was in place,” he said.
Bike Chicago, which lost out to Alta for the contract to set up a bike share in the Windy City, called the mayor’s office’s excuse for the delay “spin.”
"Alta/PBSC are clearly over-extended and the $28 million lawsuit from 8D has created a very serious problem for them,” said Bike Chicago’s Josh Squire. "Without the software they have no product to sell, and their contracts should be canceled.”
He said Alta and its partner had lied. “They made it sound like they are upgrading software when, in fact, they are developing new software from scratch.... It could take up to two years to get it right,” he said.
The Chicago inspector general’s office is also looking into allegations of misconduct in the selection of Alta during the procurement process, according to local press reports.
Among the allegations is that the city’s transportation commissioner received a $10,000 consulting fee from Alta to evaluate a bike share system in New York shortly before his appointment by Emanuel last spring.
According to an April 30 report from Crain's Chicago Business-Chicago's bike-share request for proposals was written by Jeremy Pomp, a Chicago Department of Transportation intern who was reportedly a former Alta consultant. Almost immediately after the internship, Pomp was hired by Alta to head the company’s effort in Chattanooga. Calls to Pomp's office in Chattanooga were not returned by press time.
Jonathan Davey, a spokesman for the inspector general’s office, told the Gotham Gazette that by law he was prohibited from commenting on any ongoing investigation, but said the agency had not disputed earlier reports of the investigation into Emanuel's Department of Transportation. "We didn't issue any denial,” he said. “Make of that what you want."
Alta Bicycle Share was founded in 2010 as a partnership of Portland, Ore.-based Alta Planning & Design, which designs bike lanes and parks, and BIXI, the commercial unit of PBSC.
PBSC was set up as a nonprofit in 2007 by the Canadian taxpayer-funded parking authority of Montreal to create a modular bicycle sharing system for the city. PBSC then launched BIXI in 2009 to expand the model into cities such as Washington D.C., and London.
But by 2011, PBSC was in financial trouble, so the City of Montreal provided a $37 million loan and guaranteed $71 million in credit.
The Montreal Gazette reported Aug. 7 that PBSC had projected $91 million in revenue for its 2011 financial report, $83.6 million of that from international sales. New York accounted for the biggest part of PBSC’s sales, although the company didn't see the revenue.
PBSC instead reported $32 million in revenue, $27 million of that from international sales. If the company had delivered its bikes to Chicago and New York this year, it would have made an additional $67 million in revenue.
Canadian press reports show that, in July, the City of Montreal's auditor said that under the city charter, PBSC had no legal right to be in a commercial enterprise through BIXI. The auditor wrote that "basic elements of management were neglected, including risk and cost-benefit analyses and allowance for a financial margin of error.”
Around that same time, The New York Post reported that it had discovered through a Freedom of Information Act request that Alta Bicycle Share had asked Citibank to speed up payments of $3.5 million in case the New York system was delayed until spring and runs out of cash.
In an email message, Andrew Brent, a spokesman for Citibank, said that "even on questions about sponsorship financing, we’ve nothing to say at the moment."
MTA willing to evaluate integrated fares for subways, bike sharing
Workers install a dock to model how the city's bike share program would work, 2011.
NEW YORK – In the near future, subway riders may be able to use their fare cards to check out a bike from hundreds of nearby docking stations.
The Metropolitan Transportation Authority said it is open to evaluating ways to integrate fare payment with the city's bike share program as it moves toward a wireless, smart card-based system by 2015, agency spokesman Aaron Donovan said in a recent interview.
The smart card will be based on an open payment system that will allow customers to simply tap and go at a turnstile with their own credit or debit cards.
The city's bike share program -- which promises to put 10,000 bikes that can be checked out on the streets in Manhattan, Brooklyn and Queens -- is expected to begin rolling out this summer. Officials have said the program will likely begin in early August.
Department of Transportation spokesman Nicholas Mosquera said that in other cities, up to 50 percent of bike share trips are connections to other modes of transit.
But he said while he expects to see the same here, the DOT is currently not working on fare payment integration at this time. "We look forward to exploring it in the future," Mosquera said.
The Paris Region Transit Authority currently issues a tap-and-go fare card called Navigo that makes it possible to pay for the city's VĂ©lib’ bike share system as well as other means of transportation.
"Users can then just show up at any station and take out a bike from a docking station without having to go through any other process: you simply select a bike, swipe your card over the card reader and wait for the green light and signal to release your bike," said Albert Asséra-Directeur, strategy and marketing director for JC Decaux in Paris.
Valeau said the transit authority has allowed JCDecaux’s infrastructure and systems to recognize particular transit cards. Each system is otherwise independent.
The Smart Card Alliance, a non-profit association that works to stimulate the widespread application of smart card technology, said it backs a similar plan for New York City.
Executive Director Randy Vanderhoof said he could foresee a Paris-like situation where the Alta-run bike share accounts could be linked to a card issued by the MTA.
That way, people who use both services would have a common way to check in and check out of both systems, he said.
The widespread use of such technology will also be spurred, in part, by a new initiative backed by the major credit card issuers requiring all U.S. banks to switch over to smart cards by 2015. "Soon, everyone will have a card that they can use in open payments systems like the MTA and the bike share program," Vanderhoof said.
Mosquera said New York City's bike share program is designed to provide sufficient bike share capacity at transit hubs, allowing riders to transfer quickly from bike other modes or vice versa.
He said the bike share stations extend the reach of the transit system, making distant parts of neighborhoods easily accessible from subway stations.
"The system will be perfectly suited to any potential fare integration," Mosquera said.
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