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Revel’s big talk about reinventing Ridehail could hit a brick wall

Revel, best known for its fleets of rental mopeds, plans to launch a rideshare service in New York City next month. Its effort is just the latest chapter of venture capital-backed transport startups using gray areas or legal loopholes to add more vehicles to the streets.
American cities have gotten used to startups arriving with cars, buses, bikes or scooters and big promises of improved transportation. Uber and Lyft have talked about ending car ownership and making cities better places to live. Instead, the streets ended up getting more congested and polluted. Transit ridership plummeted across the country as Uber and Lyft lured transit riders with business models that subsidized trips and burned billions. Neither company has yet reported profits.
The speed of taxis in downtown Manhattan dropped to glacial 5 mph in 2017, slower than the streetcars, horses, and strollers of yesteryear. New York City cracked down on Uber and Lyft in 2018, temporarily blocking all new rental vehicle licenses. The city’s population of ride drivers had grown to 80,000, and by In addition to the traffic problem, this had an impact on the income of taxi drivers.
“Our city is directly facing a crisis that is plunging working New Yorkers into poverty and our streets deadlocked. The unchecked growth of rental vehicle businesses using apps has demanded action, ”said Mayor Bill de Blasio. mentionned at the time.
The city’s restrictions were extended a year later. But the rules left an exemption for electric vehicles, to encourage already licensed drivers to switch to green modes.

Now Revel seems determined to seize this exemption in a way that regulators didn’t want. On Wednesday, Revel announced its plan for a carpooling service in part of Manhattan.

Revel CEO Frank Reig told CNN Business he plans to expand into other markets, but initially focused on New York, where the company is based. Revel’s business model disrupts the approach of ridehail giants Uber and Lyft. Revel drivers will be employees with benefits, and they will drive electric vehicles owned by Revel, rather than their own gasoline-powered cars.

“It’s just as much a slam dunk for the city administration and the [Taxi & Limousine Commission] as it can be, “Reig said.” In terms of city administration goals and TLC goals, and what they would like rideshare companies to do, we do it all.

The city is not convinced.

“TLC caps rental vehicles because supply already exceeds demand. The electric battery exemption is intended to encourage cars already licensed to go green, not flood an already saturated market, or deprive Manhattan’s yellow cab industry This carpool program deviates from the spirit of these rules, ”Aloysee Heredia Jarmoszuk, chairman of the New York Taxi and Limousine Commission, said in a statement.

The New York City Mayor’s Office told CNN Business that electric rental vehicles are still rental vehicles and the TLC has an obligation to protect the market.

Reig de Revel took on a more optimistic tone in an interview with CNN Business and spoke confidently about the service’s launch next month.

“We are exactly where we need to be in this process,” Reig said. “We have our basic license number, it was provided to us by TLC.”

A spokesperson for TLC called Reig’s wording “creative” and said applicants are assigned a number at the start of the application for administrative convenience, not as a milestone of progress on the application.

Revel said in a statement to CNN Business that the TLC told him to start affiliating vehicles with the base number, a step that the TLC website says does not occur until the request is approved.

A spokesperson for TLC said Revel had an inaccurate interpretation of what was provided and said to him.

Reig told CNN Business that Revel was doing whatever the city administration and TLC wanted with the ridesharing companies. The TLC declined to comment on the allegation. Reig describes the Revel product as the “carpooling of the future”.

“We’re launching 100% electric vehicles. We’re actually employing New Yorkers rather than pushing asset depreciation, insurance risk, pushing it all down on New York residents trying to earn their money. life, ”Reig said.

Drivers will be paid a base wage of $ 15 per hour. Reig said he expects pay to be closer to $ 20 an hour after tips and bonuses.


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