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Tesla taxi fleet put on hold by NYC licensing rules

Revel would have to buy out existing vehicle operation licenses to put its Model Ys on the road.

Tesla Model Y
Don't expect to see Model Y taxis on the roads of NYC anytime soon.

The iconic yellow New York taxi cab is as much a part of that city's identity as dollar pizza or giant piles of rotting trash in black plastic bags on the sidewalk. Looking at photos of the city, it can seem like there are a limitless number of yellow cabs, but the truth of the matter is that they are strictly limited.

Ride-hailing services challenged that limit, so the city opted to require licenses independent of taxi medallions for those vehicles. That limit is causing problems for a startup called Revel, which recently appealed to the New York City Taxi and Limousine Commission to allow it to operate a fleet of 50 Tesla Model Ys as cabs.

The TLC's decision -- which was reached with a 5-to-1 vote, according to a report Wednesday by Teslarati -- states that for Revel (or any company) to operate its vehicles, it has to purchase existing licenses directly from other drivers to operate its Teslas legally. The license cap is in place because the TLC believes that due to the pandemic and other market stressors, there are already too many licenses relative to customer demand, according to a statement by TLC representatives:

The public meeting was about ensuring mechanisms to properly manage applications for new/additional licenses against current ridership numbers/needs. Those with interests for new/additional vehicle licenses have attempted to establish a narrative about my not supporting EVs because they want new/additional vehicle licenses, without any regard for the current state of the market and the fact that vehicle licenses are over capacity and that ridership is low.

Naturally, this doesn't sit well with Revel's CEO, Frank Reig, who issued a statement: "The TLC never intended to consider what drivers and New Yorkers had to say and only cared about jamming through this vote on Primary Day with as little scrutiny as possible. This decision doesn't change the fact that New York City needs an alternative to the predatory leasing system that exploits drivers and pollutes our environment, and Revel is exploring ways to accomplish that."

While the TLC denied additional vehicle licenses to Revel, it has issued a license for Revel to operate a dispatch base. This allows the company to send out any appropriately licensed vehicle to pick up and transport fares, which is in and of itself a big step toward getting its operations underway.

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