New York City mayor and avowed socialist Zohran Mamdani has spoken about the need to “replace the frigidity of rugged individualism with the warmth of collectivism.” He’s about to test his own commitment to that warm embrace.
The testing ground will be the city’s taxicab and ride-share industry, which employs roughly 300,000 drivers and handles nearly 320 million fares a year. New York’s professional drivers come overwhelmingly from its Bangladeshi, Senegalese, Indian, Haitian, Caribbean and Yemeni communities in Ozone Park, Jamaica, Canarsie, Flatbush and other “outer borough” neighborhoods.
These drivers represent, in the purist sense, the core of New York’s hustle economy. You don’t need an education, you don’t need to speak English, and thanks to GPS and ride-share apps, you don’t even need to know the city’s streets.
But you still need to deal with the government bureaucracy that oversees New York’s taxicab and ride-share industry—the Taxicab and Limousine Commission (TLC), which Mayor Mamdani controls. As a political matter, that sets up a natural battle between two natural Mamdani political constituencies: drivers vs. regulators.
In most cities, getting a taxicab license or permission to drive a ride-share vehicle is a friction-free affair. In New York City, it’s another matter. You don’t apply for a TLC medallion for a yellow cab, you buy or rent one because the market for TLC licenses is capped. This is ostensibly to limit congestion but it’s also about limiting competition. Existing medallion owners don’t want fares to decrease.
It was a classic example of rent-seeking, and for decades it worked. Owning a medallion and driving a yellow car was a terrific way to earn a living and build asset wealth. Before Uber and Lyft, a TLC yellow cab medallion could sell for as much as $1.3 million. Many immigrants started as drivers and worked their way to buying a medallion; more than a few companies formed to do the same at a larger scale.
But when the ride-sharing apps moved into the city, prices on the medallion fell to the $100,000 price range. This crushed many of those who thought the medallions were easy money. Thousands of medallions and licenses went “into storage;” their owners parked their cars and medallions to avoid paying fees rather than incur further losses.
Things have stabilized, but the hack’s life is still a tough one in New York. For a political candidate eager to earn the votes of immigrant groups, it made perfect sense for Mamdani to loudly promise drivers sympathy and help from Gracie Mansion. So far, he’s given them sympathy, but that’s about it. Problem is, making life easier and more profitable for New York’s ride-share and taxicab drivers is going to require that Mamdani frustrate other core political constituencies.
First, there’s the trial bar. Right now, insurance premiums that are rising at double-digit rates are squeezing taxi and ride-share drivers. The problem is familiar: The city’s litigious trial bar sustains a mini-industry of fraudulent or exaggerated claims that force up rates. The situation has gotten so bad that the largest insurer of for-hire drives is insolvent and is awaiting a bailout from the city. But personal injury lawyers are a powerful political bloc.
Second, there are environmentalists. Under pressure to cut carbon emissions, the city passed a “Greenrides” initiative under a prior administration. It calls for twenty-five percent of all fares to go to electric vehicles this year and one hundred percent by 2030. To meet these compliance requirements, it appears ride-share apps are shifting as much business as possible to their EV drivers and away from yellow cars. Critics say it’ll only get tougher on yellow cab drivers in 2027, when the Greenrides requirement rises to forty percent of all rides.
Normally, you’d think drivers would just shift to driving EVs rather than yellow cabs, but that’s not happening. Leasing an EV is far more expensive than a relatively late-model hybrid or gas-powered vehicle. And what’s worse, EV’s need recharging at least once a day. Good luck with that: the city’s public EV charging stations are routinely jammed, leading to hours of down-time, which is the worst thing for a hack.
Under normal circumstances, Mayor Mamdani could make things easier for the drivers who form his political base. He’s spoken sympathetically of helping immigrant small businesses languishing under the city’s heavy regulatory boot.
But in this case, helping for-hire drivers would require some tough political tradeoffs. To get insurance rates down, he would have to take a whack at trial lawyers, a core Democratic base, through tort reform. And pulling back on taxicab EV mandates for ride-share drivers is almost impossible, given Mamdani’s public posturing on the dangers the city’s existing carbon emissions pose.
The mayor could be courageous and choose people over politics. Or he could be honest about the real costs of his policy priorities. Or he could posture to all sides that he’s with them and hope nobody notices the inconsistency.
If Mayor Mamdani hopes to slip through this political knot, he has still another storm cloud on his horizon, and it’s going to dramatically hit the immigrant drivers who helped put him in Gracie Mansion: autonomous vehicles.
Waymo and other operators of such self-driving vehicles would love to break into the New York market, and according to those who know the industry best, they don’t mind losing money for a few years to get a toe-hold in the city. Here’s the thing: a lot of people would benefit from self-driving cars. Taxi medallion owners could easily rent their licenses to Waymo and other operators and make a tidy income. The city could rake in more license fees while getting its green rides to its target. And riders would be none the worse off, especially if autonomous vehicles prove to be safer, cleaner, and more pleasant.
The only clear-cut losers would be the drivers, especially of ride-share vehicles, who’d get pushed out from behind the wheel. Ironically, this represents the most capitalist outcome, from a Marxist reading. After all, in this arrangement, the holders of TLC medallions are usually not drivers but capital holders. The drivers are the wage-labor. Any college student taking a class on economics could read this situation as Marx would.
It would be something else if a socialist Mayor Mamdani sides with the rugged individuals who put their capital at risk to buy a taxicab medallion rather than the immigrant drivers who got him elected. It’s probably not the warm embrace they voted for or were promised.
Noam Neusner is a New York City-area resident, a former speechwriter for President George W. Bush and a former reporter at Bloomberg News. He is a partner at communications firm 30 Point Strategies.
