Board Bulletins and Subject Numbers

July 8, 2013

Overview

On February 17, 2012, Governor Cuomo signed into law Chapter 9 of the Laws of 2012, which amended Chapter 602 of the Laws of 2011 establishing a new form of taxi service in New York City. The NYC Taxi & Limousine Commission is in the process of implementing the new legislation which will expand street-hail taxi service outside of the Manhattan Central Business District and the airports. The Boro Taxis will provide legal taxi service to the seven million New Yorkers living in Northern Manhattan and the four other Boroughs.

New York City will make a total of 18,000 street-hail livery licenses available, with an initial set of 6,000 being sold for $1500 starting in June 2013. The Boro Taxis associated with each license will have a unique color (green) and markings, as well as roof lights, and taxi meters.

The legislation also requires that each Boro Taxi be affiliated with a base that is licensed to affiliate such taxis.

The following describes who is responsible for providing Workers' Compensation and Disability Benefits coverage, under existing law, for drivers operating under these new licenses.

Application

Under the current Workers' Compensation Law and Article 6-G of the Executive Law, livery drivers of bases who are members of the Independent Livery Driver Benefit Fund (ILBDF) are deemed employees of the ILBDF if the accident occurs during the performance of a dispatched call. If an independent livery base is not in the ILDBF, the drivers are deemed employees of the base. The employer for all other livery drivers is the lessor of the vehicle(s) unless the owner-operator also drives the vehicle 40 or more hours per week. This owner-operator exemption only applies to sole proprietors; other legal entities such as corporations and partnerships are not eligible for the exemption. Owner-operators that do not lease their vehicle to other drivers are not required to cover themselves.

Bases are allowed to provide Workers' Compensation protection for their affiliated drivers through membership in the ILDBF. This fund provides coverage for limited catastrophic injuries and injuries due to a crime, but only while the driver is on a dispatched call from a base. All other injuries are eligible for no-fault benefits through an automobile liability policy.

Due to these limitations, drivers performing street-hail services in Boro Taxis cannot be covered for Workers' Compensation benefits through the ILDBF. If the base that the driver affiliates with is a member of the ILDBF, the ILDBF will cover the driver only while he is on a dispatched call from that base, but not while performing street-hail services. Additional compensation coverage is required because of this gap in coverage.

The lessors of yellow medallion cabs are universally required to provide full Workers' Compensation and Disability Benefits coverage for their drivers unless they qualify for the owner-operator 40-hour exemption. As the new Boro Taxis will be providing identical street-hail services as the yellow medallion cabs, the employment relationship between the owner of a street-hail livery license to operate a Boro Taxi and the driver is the same as it is for the yellow cabs.

As such, the owner of any street-hail livery license to operate a Boro Taxi must provide full Workers' Compensation coverage for any driver who is hired or who leases the vehicle. Accordingly, proof of that coverage must be provided to the Taxi & Limousine Commission in order to obtain the street-hail livery license. An owner-operator who drives their vehicle 40 or more hours per week who is seeking an exemption to the Workers' Compensation requirements must complete the Board's exemption certificate (form CE-200), available on its home page, and submit it to the Taxi and Limousine Commission.

The following summarizes Workers' Compensation coverage requirements related to Boro Taxis:

1. Anyone holding a single street-hail livery license must obtain a full Workers' Compensation policy unless the vehicle is owner-operated and driven by the owner more than 40 hours per week or is not leased to other drivers.
2. Anyone holding two or more handicap-accessible street-hail livery licenses must obtain a full Worker's Compensation policy.
3. A Boro Taxi base that also owns a street-hail livery license must obtain a full Worker's Compensation policy to cover Boro Taxi drivers for injuries not covered by the ILDBF.

Bases that will continue to operate vehicles solely on a dispatch basis and not as Boro Taxis are reminded that they must join the ILDBF or obtain a full Workers' Compensation policy. If the base does belong to the ILDBF and also has employees working in the base, such as mechanics and dispatchers, a full Worker's Compensation policy is required to cover these non-driver employees.

Examples of Workers' Compensation Coverage Requirements

Example 1 – An individual obtains a single street-hail livery license to operate a Boro Taxi that he owns and drives at least 40 hours per week. He leases the vehicle to other drivers on shifts when he is not driving.

Insurance requirement: The individual is not required to provide a Workers' Compensation policy or join the ILDBF. An owner-operator of a single vehicle that also drives it 40 or more hours per week is not considered an employer unless he directs and controls the actions of the other drivers.

Example 2 – An individual obtains a single street-hail livery license to operate a Boro Taxi that he owns and drives less than 40 hours per week. He does not lease the vehicle to other drivers on shifts when he is not driving.

Insurance requirement: The individual is not required to provide a Workers' Compensation policy or join the ILDBF. An owner-operator of a single vehicle that is not leased to other drivers is not considered an employer.

Example 3 – An individual obtains a street-hail livery license to operate a single Boro Taxi. He does not drive the vehicle but leases the vehicle to other drivers on all shifts.

Insurance requirement: The individual is required to provide a full Workers' Compensation policy. Any street-hail livery license holder for a Boro Taxi must provide full Workers' Compensation coverage unless they meet the owner-operator 40-hour exemption.

Example 4 – An individual obtains four handicap-accessible street-hail livery licenses to operate Boro Taxis. He drives one of them 40 hours per week and leases the other three to other drivers on all shifts.

Insurance requirement: The individual is required to provide a full Workers' Compensation policy for all four vehicles.

Example 5 – A base is licensed as a community car base and is also licensed as a Boro Taxi base. The base owns one street-hail livery license for an affiliated Boro Taxi.

Insurance requirement: The base must provide a full Workers' Compensation policy for the one Boro Taxi it owns. Affiliated Boro Taxis that are not owned by the base must be covered by the vehicle owners unless eligible for the owner-operator 40-hour exemption. The for-hire livery vehicles can also be included in the Workers' Compensation policy or covered separately through the ILDBF.

Example 6 – A base is licensed as a Boro Taxi base and has one Boro Taxi. There are no affiliated dispatched community cars.

Insurance requirement: The base is required to provide full Workers' Compensation coverage for the one Boro Taxi. Affiliated Boro Taxis that are not owned by the base must be covered by the vehicle owners unless eligible for the owner-operator 40-hour exemption.

Questions regarding this release may be addressed to the Bureau of Compliance, 328 State Street, Room 240, Schenectady, New York, 12305, (866) 298-7830.