A New York startup’s bid to launch an all-Tesla ride-share service took a bizarre turn after a city agency said it had voted against it — a full day before the vote was slated to take place.
The city’s Taxi and Limousine Commission posted a notice on Monday saying it had voted to stop issuing new for-hire licenses for electric vehicles — a ruling that would throw a wrench into electric scooter startup Revel’s plans to launch a battery-powered fleet of 50 Tesla Model Y taxis in New York.
Revel — a startup known by most New Yorkers for its ubiquitous blue scooters that were shut down for a month last summer after three riders were killed riding them — unveiled plans to launch its Tesla ride-share service in April. The company expected to win approval because a 2018 cap on new ride-share and taxi vehicles included exemptions for new electric and handicap-accessible vehicles.
Shortly afterward, however, the TLC said it planned to eliminate the electric vehicle exemption, citing concerns about traffic congestion. And in an odd move on Monday that aroused suspicions from critics about fairness, the TLC issued a notice saying, “A public hearing was held virtually by the TLC and the rule was adopted by the Commission at the June 22, 2021 Commission meeting” — a meeting that doesn’t happen until Tuesday.
TLC spokesperson Allan Fromberg said posting a final version of a planned rule change online is required under the City Administrative Procedure Act. He dismissed any concerns about the baffling use of past tense to describe a future vote as a “red herring.”
But Arthur Goldstein, a former city council legal staffer and partner and chair of government relations at Davidoff Hutcher and Citron LLP, said that the use of past tense “makes no sense.”
“If they’re using a phrase like ‘was adopted’ and it’s being published today, it is just not accurate,” Goldstein said. “Anyone reading it would think, ‘This is a done deal. Why should I even put forth an argument to change it?’”
The TLC has cited congestion concerns even though electric vehicles make up fewer than 400 of the 97,000 for-hire cars on New York streets. The overall number of for-hire vehicles in the city has fallen by 15,000 since 2018, according to TLC data. The current shortage has left has left many New Yorkers struggling to find rides as fewer yellow cabs are on the streets and Uber and Lyft face a shortage of drivers.
In an interview with The Post last week, TLC Chair Aloysee Heredia Jarmoszuk insisted that the agency would not bar Revel or any other company entering the ride-share market. In the face of an unfavorable ruling, Revel could still launch its electric vehicle service if it purchased 50 gas vehicles, took them out of service and replaced them with Teslas, she said.
“Just because a car is electric doesn’t mean that adding more cars and more congestion is good for the environment,” Heredia Jarmoszuk told The Post. “This is a simple math issue. This is not about targeting a group or saying you can’t enter the marketplace or we don’t like you.”
But Revel CEO Frank Reig told The Post that requiring the company to buy gas vehicles in order to launch their own electric ride service would be “the very definition of limiting market competition.” Uber and Lyft faced far fewer hurdles when launching in New York, he said.
Asked if Revel would ignore a potential TLC decision against the company and launch its ride-share service anyway, Reig said the company will hit the streets.
“We are going to be on the streets because we know the law is completely on our side,” he said. “Never in Revel’s history have we operated illegally.”
City Councilman Keith Powers, who helped pass the original cap on ride-share vehicles in 2018, said that the TLC should pull its ruling and consult with the council. He also said the TLC’s decision to vote on the rule as New Yorkers are distracted on a high-stakes primary day “raises questions about whether it’s trying to be rushed through.”
“You shouldn’t do rule-making while election day is happening and also when you have an applicant that’s sitting right in front of you.” he said.
Preemptively releasing a notice about a vote that hasn’t been conducted yet suggests the TLC has already made up its mind, said Bruce Schaller, a transportation expert and former staffer at the TLC and Department of Transportation.
“It looks bad,” said Schaller. “They should not finalize the rule until they’ve had the hearing and heard from the public.”
Schaller found the congestion explanation inadequate since the overall number of ride-hail vehicles has declined and said he was “puzzled” by the agency’s thinking.
“It makes you very suspicious,” he said of the TLC proposal. “You just intuit that there’s a rationale behind this that’s been kept invisible and you don’t know what it is.”
Lauren Bailey, Director of Climate Policy at public transit-focused organization the Tristate Transportation Campaign, said the TLC’s move was passing-up an opportunity to increase the number of electric cars on the street.
“Obviously we want people to take transit,” she told the Post. “But in the meantime there is still a need for vehicles and if cars are here to stay for now we need them to be electric.”
“This is a really frustrating development in the whole conversation around congestion in New York City,” she said.
Revel, which is opening an electric vehicle charging facility in Bed-Stuy that will be open to the public, also argues that it should receive approval from the city for its plan because it treats its drivers as full-time employees who receive health insurance and vacation time — unlike Uber and Lyft drivers.
Brooklyn yellow cab driver Desmond Armah-Hammond, 61, was recently hired by Revel to drive one of its Teslas. He said he would call into Tuesday’s meeting to show his opposition to the TLC’s proposal.
“There’s no respect coming from the TLC for the drivers,” he said.