My name is R.J. Lehmann. I am editor-in-chief, a senior fellow and a co-founder of the R Street Institute, a nonprofit public-policy research organization headquartered in Washington. I write in response to the commission’s solicitation of public comments regarding new rules governing the licensing of for-hire vehicle dispatch applications and proposed amendments to existing rules governing how for-hire vehicle bases may use smartphones to dispatch vehicles.

R Street has been engaged actively in evaluating the emerging ridesharing industry and recommending appropriate regulatory structures to accommodate an open, equitable and competitive market in for-hire transportation options.  In the past year, we have produced the white papers “Five principles for regulating the peer-production economy,” “Blurred Lines: Insurance challenges in the ride-sharing market,” and our flagship study, “RideScore 2014: Hired driver rules in U.S. cities.” That last report, which evaluated for-hire rules in 50 of the largest U.S. cities, graded New York City a “D” in its regulation of transportation network companies; a “D” in its regulation of taxicabs; and a “B” in its regulation of limousines and livery services, for an overall grade of “D+.”

Our concerns with New York’s system include its requirement that even casual ride-sharing drivers must submit to commercial licensure; its prohibition of price experimentation; and the artificial supply restrictions created by its medallion requirement. We understand such concerns are beyond the scope of the rule-making immediately at-hand, but remain hopeful that state and city lawmakers will come to understand how such rules harm the availability and affordability of transportation services from which New York consumers may choose.

With respect to the proposed rules, while we share the commission’s goal to create “uniform standards on all current and future apps used by FHVs,” we are concerned that these regulations would have the effect of locking out new entrants and reducing the competitive vibrancy of the for-hire transportation market overall. Our most significant concerns include:

The commission notes in the introduction to its proposed rules that roughly 42 percent of New York’s for-hire vehicles currently can be booked through smartphone app, with as many as 75 different apps currently operating in the New York market. We see these developments as positive for New York consumers, although much more significant reforms are needed to open the market to competition even further. In the meantime, it is essential that the commission not take steps that discourage new entrants and new business models from providing New Yorkers the transportation services they need.

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