MTA Could Lose $1M A Day Over Congestion Fee Lawsuit

NEW YORK — A lawsuit holding up a new congestion surcharge may cost the MTA millions of dollars in revenue before a judge even hears arguments in the case.

Taxi and Uber rides to and from central and lower Manhattan were supposed to be subject to fees of $2.50 and $2.75, respectively, starting Jan. 1, while pool trips would have a 75-cent fee. The MTA expected the charges to generate $365 million, or an average of $1 million a day, in 2019 and $385 million in future years, the agency's budget shows.

But a state judge blocked the fees from taking effect after taxi drivers and medallion owners sued to kill them last month. A hearing in the lawsuit won't take place until Jan. 17, meaning the MTA could lose $17 million in the first weeks of the year — and even more if the charges are ultimately struck down.

"The loss of hundreds of millions of dollars in new annual revenue to the MTA would have a devastating impact on our ability to continue improving subway service and would only further frustrate customers," MTA spokesman Shams Tarek said in a statement.

The surcharges were part of the state budget that Gov. Andrew Cuomo signed last spring. They were meant to ease traffic congestion while raising dedicated money for the cash-strapped MTA, which has seen ridership drop in recent years.

"The state is preparing a strong and comprehensive submission to the court in advance of the hearing," Cuomo spokesman Patrick Muncie told The Wall Street Journal, which first noted the lawsuit's fiscal impact on Wednesday.

Cabbies and medallion owners argue the fees unfairly target the taxi industry, which has seen several drivers take their own lives under the weight of crushing financial pressure. The city's Taxi and Limousine Commission also has yet to implement regulations to enforce the new fees, the lawsuit argues.

Without those regulations, "the already crippled taxi industry will suffer even greater losses, as taxicab owners and operators will be forced to pay additional taxes, fines, and face suspension, all because the Taxi and Limousine Commission failed to implement proper oversight and reporting standards for the so-called 'congestion tax," the lawsuit says.

App-based drivers also have concerns about the fees. The Independent Drivers Guild, which represents Uber, Lyft, Via and Juno drivers, has launched a petition calling on Cuomo and state lawmakers to repeal them.

New York's sales tax on app-based and for-hire vehicle trips already raises more than $260 million a year, guild spokeswoman Moira Muntz said.

"If the new tax moves forward, the average app-based trip will be taxed $5 or 25% - meanwhile the delivery, construction, and commercial vehicles that are the real congestion culprits are exempt," Muntz said in a statement. "Delaying implementation of this unfair tax until fair and equitable legislation can be passed is the right thing to do. "

(Lead image: Traffic moves through Times Square on Jan. 25, 2018. Photo by Drew Angerer/Getty Images)