Crains New York - April 8, 2013 - (Page 6)

THE Big Brother wants to hail cabs INSIDER BY ANDREW J. HAWKINS Despite the lawsuits and the red tape, some tech startups still see opportunities in New York’s $7 million-a-day taxi industry. Case in point: In mid-March, a Las Vegasbased tech company began the process to test its “cloud-based” vehicle monitoring software in hundreds of yellow cabs, a move that has the potential to upend the city’s recalcitrant taxi industry. Using the new software, taxi regulators would be able to monitor cabbies’ whereabouts in real time, as well as help some riders summon cabs. The technology would also enable the city to investigate complaints about cabdrivers taking riders on circuitous routes. Ending a duopoly Frias Transportation Infrastructure, or FTi, says its RideIntegrity software can give the Taxi & Limousine Commission access to data that the agency only gets in bits and pieces from Creative Mobile Technologies and VeriFone Media, the two companies that control the TV screens and credit-card machines in the back of taxis. For almost eight years, CMT and VeriFone have operated the in-taxi payment systems used in the city’s 13,000-plus cabs. Even though both companies’contracts expired in February, the firms will most likely continue to dominate.But new rules will give smaller tech firms that meet the TLC’s standards a chance to step into what was a closed market. “I don’t know how many times people have come to us and said,‘Hey, I’m a tech company’or ‘Hey,I’m a data analytics company’ or ‘Hey, I’m a credit-card processing company— how do I break into this business?’ ” said TLC Deputy Commissioner Ashwini Chhabra. “We’ve always had to say, ‘Contracts run through February 2013. Stay tuned.’ ” If approved, FTi would become the third vendor for the Taxicab Passenger Enhancements Project.Though the TLC uses its own regulatory software, a spokesman said it was “glad to see them jumping into the New York market. … They have an exciting product to offer the taxi and [forhire vehicle] industries.” FTi CEO Mark James said the company aims to install the software free in a limited number of taxis to test all the features with the hopes of eventually moving into more cabs. “We’re going to try to get up and running in as many cabs as we can in New York,” he said. “I think TLC is very encouraged, and they’re very encouraging to us.” Political roadblocks A spokesman for CMT said the Manhattan-based firm “welcomes any competition.” In addition to technical hurdles, politics further complicates the task of breaking into this tightly regulated market. A state judge last month blocked the TLC from creating a pilot program for e-hail apps, arguing the software illegally duplicates the call-ahead service that is the sole domain of livery cars. Mr. James said he wasn’t discouraged by the litigious environment of the city’s taxi industry, arguing that things are still trending positively. FTi, a technology company operated by the Frias Transportation Group—which runs the largest group of taxicab companies in Clark County, Nev.—has spent three years developing the software. RideIntegrity was recently approved for pilots in San Francisco and Las Vegas. “We want to be part of the metamorphosis of New York’s regulatory system as it accommodates new technology,” Mr. James said. “We know it’s going to change, and we want to be part of it as it changes.” Ⅲ For the first time, the taxi TV market opens up Suzanne and Lee, AC&C Adopters with Stan and George Meet Suzanne and Lee, two of New York’s Kindest with bff’s Stanley and George. Shy guy Stan watches the world from his windowsill while dapper George stalks ping-pong balls in his tux, but they all love movie night on the couch! Our nonprofit organization rescues thousands of New York’s homeless and abandoned animals each year. Our goal is to place every dog, cat and bunny in a new loving home. But we can’t do it without your help. BE ONE OF NEW YORK’S KINDEST: ADOPT VOLUNTEER DONATE nycacc.org Photo by Donna Svennevik © 2013 6 | Crain’s New York Business | April 8, 2013 OUR CITY, OUR SHELTER. by Andrew J. Hawkins and Chris Bragg Post-Bloomberg anxiety increases M any New Yorkers have long fretted about the impending departure of billionaire Mayor Michael Bloomberg, whom they view as the rare politician immune to bribery or intimidation by powerful special interests. The unfolding last week of two corruption scandals, one of which touched the race to succeed Mr. Bloomberg, has exacerbated those fears, conjuring up images of city government as a den of patronage and backroom deal-making. “You’re seeing this kind of brazenness almost in anticipation of a new day coming,” said Bill Cunningham, a former Bloomberg administration official and the managing director of Dan Klores Communications. “It’s almost like these guys are warming up, getting ready for it. This is like spring training for the end of the Bloomberg era.” newscom Tech firm says software will track taxi whereabouts for regulators and riders His reference was to a slate of charges against local officials,one of whom allegedly bribed Republican leaders to run in their party’s mayoral primary. While there has been no shortage of crooked politicians during Mr. Bloomberg’s tenure— three councilmen are currently in jail, as are a slew of state legislators—the mayor’s wealth helped immunize City Hall from the corruption that now seems endemic in Albany and the five boroughs. To be sure, the mayor’s administration was no stranger to criminality, but at the agency level. The CityTime project saw a contractor bilk the city for more than $500 million. A housing official was arrested in 2011 for receiving $600,000 in graft, and two more were hit with bribery charges the next year. But would-be successors need to make the types of deals and alliances to get elected that Mr. Bloomberg’s pocketbook helped him avoid.That has led to much of the hand-wringing in the business community, Mr. Cunningham said. The mentality, he said in the wake of last week’s scandals, is “Bloomberg’s leaving. Now they’re trying to buy City Hall.” At a recent forum in Brooklyn Heights, the first question for the five Democrats running to replace Mr. Bloomberg wasn’t about the economy or education, but corruption. The candidates haven’t exactly calmed those fears: Public Advocate Bill de Blasio sought to connect the scandal to Council Speaker Christine Quinn’s management of council members’ discretionary funds, which prosecutors said Councilman Daniel Halloran tried to exploit. Comptroller John Liu, however, pointed out that such funds make up a tiny fraction of the city budget and directed his criticism to the billions in “no-bid contracts” issued by the Department of Education and Economic Development Corp. The candidates, though, did not address what they would do as mayor to stem corruption, perhaps knowing that any promises of independence would ring hollow in a race already dominated by a mad dash for partisan endorsements and union support. In all of the Democrats’ current offices, there has been some degree of political hiring. When she assumed the speakership in 2006, Ms. Quinn fired 61 City Council staffers who had been working for the previous speaker, Gifford Miller, and replaced them with her own allies, noted Dick Dadey, executive director of Citizens Union, a goodgovernment group. “We’ve been enjoying a period where political clubs haven’t had much sway at the mayor’s office like they have in past years,” said Mr. Dadey. “We’re at risk of a renewal of clubhouse politics.” Meanwhile, Republican candidate George McDonald, who calls himself the only political outsider in the race, is struggling to generate the money and support he needs to remain in the contest. Only one contender, Republican grocery magnate John Catsimatidis, is independently wealthy. Mr. Catsimatidis says his $3 billion fortune and self-funded campaign will allow him to run City Hall as Mr. Bloomberg does, without being beholden to special interests. “The fact that I’m wealthy gives me some independence,” Mr. Catsimatidis said. “If a big developer throws a fundraiser for you and raises $150,000, you’re going to do what he says.” Ⅲ Crain’s Insider, our award-winning politics newsletter, is now a blog. Read it every day at www.crainsnewyork.com/insider http://www.nycacc.org http://www.nycacc.org http://www.crainsnewyork.com/insider

Table of Contents for the Digital Edition of Crains New York - April 8, 2013

IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
BUSINESS PEOPLE
SMALL BUSINESS
OPINION
GREG DAVID
REPORT: BANKING
THE LISTS
FOR THE RECORD
CLASSIFIEDS
REAL ESTATE DEALS
NEW YORK, NEW YORK
SOURCE LUNCH
OUT AND ABOUT
SNAPS

Crains New York - April 8, 2013