Testimony of LYFT To the New York City Taxi & Limousine Commission RE: FHV Electronic Dispatch 5/28/15 Good morning Commissioners. My name is Diana Dellamere and I am a Public Policy Manager for Lyft. Were here today to express our concern that these rules:

don't address any actual harm in the app dispatch market, and they target app dispatch companies unfairly discourage innovation and tech investment in New York Citys transportation market, and encourage a monopoly in the black car market, resulting in fewer ride options for consumers and fewer economic opportunities for drivers

Lets start by asking the most important question: (1) Are app dispatch companies and their services currently causing significant harm to consumers, requiring the sweeping new regulations being proposed? The answer is no. Quite the opposite. Smartphone apps like Lyft provide new levels of dispatch convenience, driver names and photos for safety, cashless payment, electronic receipts with all ride and payment details plus links to retrieve lost articles or get help, driver ratings and reviews, vehicle and license plate photos, and the list goes on. Plus more earnings and choice for drivers. But these are not problems. They are the reason New Yorkers are choosing to use them everyday for safety and convenience. In spite of this, the TLC proposes heavy new regulatory burdens solely for these services while leaving traditional dispatch with more relaxed rules. This is backwards. (2) Now lets ask the second most important question: Will the new rules spur innovation and better services for consumers? The answer is demonstrably no.

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We know this because they are modeled so closely after the e-Hail rules. A few years ago, E-Hail app developers were clamoring to come to New York City. The TLC allowed them but imposed extensive licensing regulations, restricting flexibility and limiting available options. What happened? Most of the companies left, only one is now considered relatively viable, and consumers by and large dont use them. New Yorkers have chosen instead to use app dispatch services for black cars. Lyft wants to keep providing its service and significantly improve on it for New Yorkers. But innovation in any market requires businesses to invest, which requires confidence in a reasonable, fair, and predictable regulatory system. Lyft launched in New York City nearly a year ago, and since then we have seen the TLC propose significant new rule changes fairly frequently, culminating in these unbalanced rules patterned after a system that already failed. This does not encourage tech investment in New York. (3) The Rules Harm Competition by Arbitrarily Limiting the Number of Services a Driver Can Use One of the most glaring problems with the rules is that they would limit drivers to using only the equipment provided by their affiliated base, and one other device for dispatch. The result could be drastic and predictable - a monopoly. Drivers will have no realistic choice between the one dominant app dispatch company and others. They must choose the service that will keep them most busy. And that company is incentivized to game the system by supplying the maximum number of devices allowed in the car, thereby owning the market. Consumers are left paying the price. Despite such obvious harm, this rule is not supported by factual findings of a problem. Hypothetically there is a concern about too many devices in cars causing a safety issue. But one would expect the TLC to investigate and demonstrate the actual existence of such a safety issue before proposing such a competition crushing limitation. (4) There is a better way to address current market changes. If the TLC remains concerned about the impact of new methods of dispatch communications on the existing standards, we have a solution:

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Add a provision to the existing base license rules that explicitly makes each base responsible for ensuring that any means of dispatch communication it uses, whether in their direct control or procured through contract, is compatible with the rules required under its base license. Liability should be limited only to trips dispatched by that base.

This is an effective, uniform, and simple solution to achieve the TLCs consumer protection and safety goals while not impeding innovation. This solution is also compatible with the rules recently enacted by the TLC to address dispatch issues without restricting competition or driver freedom. It is our hope that the TLC will further its stated mission of ensuring safe and plentiful transportation options for New Yorkers--not by enacting regulations that would inhibit and discourage innovation, but by embracing these advances in technology and providing New Yorkers the services they clearly want and need.