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Inadvertent Waste - Government Waste Commission - Citizen Proposals to Make Local Government More Efficient - NYC's Yellow-Cab Follies - $ 1/4 Billion Annual Loss for NYC

1st Published on 3/15/03; Last Update: 11/12/07 6:30 pm

Note: 5 Weeks BEFORE this Website Was First Posted (and unknown to the author), the NYC Taxi & Limousine Commission Announced Elimination of Its Recorded Announcement Rule

It is interesting to note that, on 2/9/03 - 5 weeks before this website was first posted - the NYC Taxi & Limousine Commission (TLC) announced it is eliminating the required 10-second recorded announcements in NYC yellow cabs. We can only hope that the trip-ticket requirement (also discussed below) will meet a similar fate.

On 2/9/03, the Associated Press stated, in its story entitled "City intends to get rid of recorded messages in taxis":

The recorded announcements reminding taxicab passengers to buckle their seat belts will be eliminated in the next few months....

The Taxi and Limousine Commission decided to do away with the announcements after a survey it conducted revealed that they were largely disregarded by passengers....

Of the survey's roughly 4,000 respondents, 67 percent said they ignored the advisories, which also tell passengers to collect their belongings and ask for a receipt. Twelve percent of respondents said they deliberately refused to buckle their seat belts because they were so annoyed by the announcements.

The messages, which were installed in city taxis in 1996, have featured the voices of several dozen celebrities, including Joan Rivers, Jackie Mason, Chris Rock, Dr. Ruth Westheimer and ....

Mayor Michael Bloomberg said in his radio address on Friday that "everybody hates" the announcements and that they would be "going away in the very near future."

[TLC Chairman] Daus said the advisories would be pulled from all taxis this spring, at the earliest.

Billions of Dollars Thrown Away Needlessly

I understand how politicians siphon off money to their friends and patrons with the public getting little or no value for the hundreds of billions of dollars involved.

After all, what kind of a government would it be that had politicians acting for the public welfare instead of the special interests? It would be nothing we are familiar with.

Yet, there are billions of dollars being wasted each year inadvertently - with no particular person or group being intentionally benefited.

It is as to this kind of governmental waste (Inadvertent Waste) which I feel a group should be formed in each local government to try to identify this kind of waste which has no constituency, so that the waste can and should be easily eliminated, and perhaps make a substantial contribution to balancing government budgets which are now under pressure.

Governmental Waste Is Not Just Wasting Tax Money; It Also Includes Wasted Time and Monetary Expenses Imposed on Citizens, Residents and Visitors by Government Regulations and Other Mandates

It is important to note at the outset that "inadvertent waste" is not just the wasteful expenditure of moneys received by government as taxes. It also includes such things as moneys, time and other resources wasted by citizens, residents and visitors by reason of government mandates (such as excessive governmental regulation).

Particularly, when the government does not even collect the money it wastes, there is a much greater possibility that the expenditure is inadvertent, and wasteful. This is the case with expenditures of time, money and other resources imposed on citizens, residents and visitors by government mandate, without any real thought about the real losses to real people being caused by the government regulation.

Proposal

I propose that a regular meeting take place (such as a public forum) in which persons by prior scheduling can have the opportunity to present proposals for saving money to the local government, with appropriate notice to the press for dissemination of the proposals, or more appealing proposals. These proposals for the most part should be to identify "inadvertent waste", which should be less controversial and more readily eliminated than expenditures which have a constituency to prevent their elimination or reduction.

One such proposal is based on an idea which I had on 3/14/03, which led me to conclude that there probably are hundreds of similar areas involving many hundreds of times more savings for the local community than I see can be saved with this one idea of mind.

History of Attempts to Reduce Government Waste

For years, there have been major and lesser attempts to control government waste through legislation, legislative hearings, proposed bills, commissions and citizen initiatives. Anyone wanting to do research into the area would quickly come across the following names or topics (which paragraph was prepared for use as an HTML content meta tag above for this article):

Inadvertent Waste; Government Waste Commission; 1947 Committee on Organization of the Executive Branch of Government; popularly known as the Hoover Commission; Commission against Government Waste; Committee against Government Waste; Grace Commission; Little Hoover Commission; Second Hoover Commission under Eisenhower; AGI Government Affairs Program at govt@agiweb.org; Kasey Shewey; Cato Institute; Dean Stansel at Cato Institute; Citizens against Waste; President's Private Sector Survey on Cost Control; Thomas Schatz, Pesident; the Green Citizens Campaign of Friends of the Earth; Courtney Cuff, Campaign Director; the Corporate Subsidy Reform Commission Act; Senator John McCain; Senator John Kerry; Senator Russell Feingold; Representative Ed Royce; Representative David Minge; coalition to stop wasteful spending; base closings task force in the late 1980's; Progressive Policy Institute; Citizens against Government Waste; Citizens for a Sound Economy; National Taxpayers Union; Porkbusters; anti-pork legislation; Citizen proposals; Americans for Tax Reform, an organization; more efficient government, citizen participating in streamlining local government; ...."

Reform efforts have generally not succeeded (other than with military base closings) in eliminating expenses where the vote of interested legislators is required. Base closings took place because the political power to select bases for closing was delegated to the commission (with a take-it-all or leave-it-all vote by Congress thereafter).

But where waste has less of a constituency, there have been some reform successes, including the 1947 Hoover Commission and the 1990's Grace Commission.

Inadvertent Waste - Where Reform Should Start

It seems to me that with government waste, a successful start can and should be made with what I call "inadvertent waste", i.e., waste which occurs because of government stupidity and lack of attention and has no real purpose of bestowing economic (public tax money) or other significant, identifiable benefits on any favored person or group.

My Taxicab Trip Ticket or Log Idea

The idea came to me quite simply. I was in a rush to get to my car (parked about 3/4's of a mile from my apartment in NYC), and after hurriedly jumping into a cab at an intersection and breathlessly urging the driver to make a right turn (while the light was still green), the driver instead quite deliberately did not do as I requested and instead reached up to his sun visor, pulled out his required taxi-driver's log (mandated by rules of the New York City Taxi and Limousine Commission or "TLC") and pen, and dutifully made the appropriate entries on the form (already filled out to contain the driver's name, taxi driver's license number, taxicab medallion number, starting number of miles on the taxi meter, and the date.

This 15-second delay forced me to wait through a red light, which added up to another 30 seconds or so to my original 15-second wait. [I don't add this additional 30 seconds to my time estimates.] And the 15-seconds, it should be remembered, are even longer, because the driver has to make entries after the ride is over, but presumably the passengers are not in the cab at the time. I don't try to add any costs in this initial cost estimate for this additional delay (driver's time, cost of gas, wear and tear, and environmental costs).

This new information inserted by the driver on his trip ticket form consisted of the time that he picked me up, the number of passengers, the specific street address where he picked me up, and the destination which I gave to him upon entering the cab (right before I urged him to make an immediate right-hand turn).

I estimated that there was a delay of about 15 seconds for the driver to go through his pre-trip ritual.

I started thinking about the purpose of the taxicab log, and the cost of requiring such a log to be maintained by the driver, and presumably stored (by the cab owner or perhaps the TLC) for many years thereafter. [Note: the driver is obligated by TLC rules to turn in his/her trip ticket to the "owner" of the taxicab at the end of the shift.]

There are at least two types of regulatory purposes: (i) a seemingly or actually legitimate purpose which provides the original basis for imposing such a requirement on cab drivers; and (ii) the actual purpose or reason, which is often no more than a bureaucrat (political hack, with no experience as a cab driver, appointed to regulate all taxicabs in NYC, setting for some basic justification for his appointment and regulatory employees to work under him/her).

The legitimate purpose would appear to be to have a record if a "perpetrator" uses a cab to commit a crime these taxi logs might help to identify the time the "perp" got into the cab and left the cab, and further might help to get the cab driver to recollect that he drove somebody from one point to another on a certain day, as described in the log.

I have tried to determine whether the logs, throughout their 40 years of maintenance and availability to law-enforcement officials (other than the taxicab regulators themselves) have ever been used meaningfully in any criminal matter.

I plan to write a letter to the New York City Taxi and Limousine Commission to see what their records might say about any prior help such records have been, and in what way today such records are supposed to be of use for any purpose at all, other than their obvious need to be put together for storage purposes.

I remember years ago that parking tickets proved valuable in identifying the "Son of Sam" killer, David Berkowitz. Maybe solving unrelated criminal matters is the real reason for issuing parking tickets! If so, maybe we don't have enough regulation and I should forget about writing the cost analysis planned for immediately below.

No, upon slight reflection, it doesn't seem probable that parking tickets or taxicab logs are an integral part of our crime containment efforts in New York City. Instead, these regulations tend to impoverish residents and add to the number of events recorded by NYC as wrongful or criminal conduct.

Cost Analysis - $87,922,540 Plus to New York City Residents and Visitors

I assume it takes the taxicab driver an average of 15 seconds to extract, fill out, and put back his/her trip ticket each time the driver obtains a new fare.

I estimate that the average number of trips per shift for a yellow taxicab driver is 27.5. Cabbies tell me that they generally have between 25 and 30 fares per shift, and on better days it can be 35 or slightly higher. I assume 27.5 fares per shift (which allows me to forget about the occasional flat-rate trip from JFK to New York City).

The TLC in its website states that there are 12,187 licensed yellow cabs in New York City.

I estimate that each cab is used, on the average, 1.5 shifts per day, 365 days per year.

I assume that the driver has an average of 1.5 passengers in the cab during the trip, so that together with the driver there are 2.5 persons involved for each trip.

I assume that the average value of the time for the driver and 2.5 passengers is $40. This amount, of course, is pure guesswork, but persons who take yellow taxicabs in New York City tend to have higher-paying employment or self-employment than persons who do not take yellow cabs, which is the reason in the first place that many persons take yellow cabs. Because it saves money to spend $10 by yellow cab to go somewhere than to spend $1.50, go by bus or subway, and get there 30 minutes later.

Also, I want to estimate that the cost of having a taxicab idle unnecessarily for one hour, together with the wear and tear on the taxi, is about $3 (slightly less than pure guesswork), and that the cost to the environment for having the taxi unnecessarily idle for an hour is another $3 (especially in added health costs and personal loss to persons suffering health declines, and increased insurance costs, just to name some of the costs).

I haven't even added the costs of enforcing the taxicab trip ticket requirement, or the costs of any review of such completed trip tickets, and resulting fines, loss or suspension of license, training of Taxi & Limousine Commission personnel, police, parking enforcement agents, adminstrative judges, and others (even politicians) about this requirement.

The formula to calculate the annual cost (without any adjustment for income-tax ramifications) is: (15 x 27.5 x 1.5 x 2.5 x 12,187 x 46 x 365) divided by (60 x 60). The total amounts to $87,922,540 per year.

The figure "46" in the formula is the total of $40 + $3 + $3. And 60 x 60 [or 3,600] represents the number of seconds in an hour (60 seconds times 60 minutes).

It seems to me that $ 88 million is a pretty high price for residents and visitors to pay unnecessarily when visiting New York City.

I'm not overstating the costs. I can find another $87,922,540 (none of which is overlapping) based on a different requirement of the TLC: see An Additional $87,922,540 "Inadvertent Waste" with NYC Yellow Cabs below.

Additional $11,009,431 Fare and Tip for 15-Second Delay in Completing Trip Ticket

Also, I might as well add to the $88 million cost the amount of money which the passengers pay to the driver for the additional 15 seconds of the trip: The meter runs at $.30 per 90 seconds of non-moving time (or $.05 per 15 seconds of non-moving time), and the driver generally receives from his/her passenger(s) a tip of about 20% of whatever fare is indicated on the meter. Thus, for every 15 seconds ($.05) there is an avoidable cost of $.06 ($.05 plus $.01), and this amounts to $.06 x 240 or $14.40 per hour. This represents an additional annual cost of about $11,009,431 (for the allocable fare tip relating to the 15-second delay to fill out the trip ticket). The formula is: $.06 x 27.5 x 1.5 x 12,187 x 365. I should note that the cost is probably lower than this estimate because some drivers may fill out the log before starting the meter.

The Regulations of the New York City Taxi and Limousine Commission are available at its website. For the specific TLC Taxicab Driver Rules, see Current TLC Rules Governing Yellow Taxicab Drivers. Specifically, for the rules relating to trip tickets (which are, in reality, log pages) and their use go to Sections 2-27 and 2-28 at pages 21-23.

And as to NYC taxicab fares set by the TLC, see Current Yellow Taxi Fare Set by the NYC Taxi & Limousine Commission. These fares are: $2.00 upon entry; $.30 per 1/5 mile; $.30 per 90 seconds waiting time or up to 8 miles per hour; and $35 flat fare from JFK to Manhattan.

For a list of the different TLC rules, and the TLC's "navigational system" for trying to find the appropriate rule, go to TLC's Yellow-Box Pull-Down Window for Locating Desired Set of TLC Rules - TLC's "Navigational System".

Back to Original Discussion

If something so insignificant in government regulation can cost the people of New York City about $100 million per year (as already explained above), imagine how many other regulatory abuses could and should be identified -- perhaps enough to eliminate the budget deficit for NYC which is currently being discussed.

Of course, I realize that much of the loss is borne by citizens, residents and visitors rather than directly by the NYC government, but this nevertheless represents one good reason that NYC is losing businesses and tax revenues. If NYC imposes taxes indirectly on its citizens, residents and visitors through NYC-mandated inadvertent waste, NYC will see its revenues decline correspondingly in subsequent tax periods. This makes it not unfair to say that inadvertent waste is really a loss by NYC, in spite of its slight deferral.

An unfortunate thing is that the Courts will not permit a taxpayer to win a lawsuit challenging government waste. Government agencies are permitted under prevailing legal doctrine to do almost anything they want as long as there is some nominal pretext for the government action. The government has a right to be wrong!

Accordingly, it is only through citizen action at a political and public relations level that government waste can be challenged, which is why I'm proposing a forum for citizens to present their own analyses similar to the one I have set forth above as to any area or areas of inadvertent waste, in which they can show there are significant savings to be achieved as to regulations which really are meaningless.

As to the other type of regulations, in which there is a payoff to some friend, associate or patron, I am not advocating that any forum or disclosure be made. It would be a waste of time, such as trying to stop governments from giving money to wealthy corporations. As to this form of waste, see my job-theft website at How NYC and Other Government Agencies Waste Billions of Dollars in Stealing Existing Jobs from Other Towns, Cities, Counties and States

My Prior Interest - Cost-Benefit Analysis Proposal Adopted by the President

Many years ago I was similarly interested in regulatory reform and I sent a letter to President Ford urging that he have persons analyze the costs versus the benefits of any new regulations. I was amazed that within a month or so President Ford actually announced a cost-benefit requirement for adoption of any new regulations.

Analyzing the costs of something are not new. Ford Motor Company allegedly computed the costs of making changes on its Pinto automobile to avoid deaths caused by gas-tank explosions, and allegedly determined that the costs of correcting the condition would be more than the costs of litigation and settlements/judgments involving the alleged defect.

But there are some things, such as the taxicab trip ticket cost, which truly seem to have no appreciable benefit. Yes, it is true, the driver is able to pocket more money per trip as a result. But if this is desirable, why not require the driver to wait 10 minutes before starting the trip, or just increase the minimum fare for the taxi ride from $2.00 to $2.06 (or $10.00)?

The unnecessary increase in cost reduces demand for taxicab rides and help to strangle the economy for New York City.

To start, perhaps NYC should put some restraints on the NYC bureaucracy and stop some of the regulatory creep which overall (i.e., from all NYC agencies) is economically strangling NYC and putting the city deeper and deeper into debt. An example of this creeping paralysis is found in the TLC's website, as a list of regulatory initiatives (i.e., additional regulation) which is being proposed by the TLC. See Current Regulatory Initiatives of the NYC Taxi & Limousine Commission

One of the reasons the TLC is able to initiate more regulation without any fuss from "regulatees" is that most of the licensed taxicab drivers may have immigration difficulties and are afraid of reprisals by the TLC, and the taxi medallion owners are riding a gravy train and generally do not complaint about the burdens placed on NYC residents and visitors by the TLC.

Challenging My Estimates I can challenge my own estimates. For example, what is the value of a taxicab driver's time and the value of the time of his/her average passenger. Are we going to look at average earnings, lost opportunity, tax records, value to the individual kept confined in the cab unnecessarily? Also, how many seconds are actually used on the average. I believe that a Taylor time and motion person would find that more than 15 seconds are involved, when taking everything into account (such as the fact that an entry is made two times for each ride, one at the start and one at the end, with some of these entries I suspect being doubled up, with each other or with another trip). Also, I really don't know if 1.5 shifts per day is accurate, especially when there is a shortage of drivers. Anyway, I leave the challenge to those who want to challenge my efforts instead of trying to use my efforts as a basis for uncovering, analyzing and reporting on other instances of inadvertent waste.

An Additional $87,922,540 "Inadvertent Waste" with NYC Yellow Cabs In the title of this article, I indicate that we can find about one-quarter billion dollars in annual waste involving the NYC regulated yellow-cab industry. We've already discussed about $100 million of such waste. Let's go further.

Inadvertent waste is all around us. Even if you find an instance in one industry, it shouldn't preclude your efforts to identify and describe additional inadvertent waste.

For example, another inadvertent waste I have been fuming at during the past 15 years or so is the length of time I have to wait in the taxi, after the ride has ended, while the driver prints out my receipt (which I usually need for tax purposes).

The make and model of taxi meter for NYC cabs is mandated by, yes, the TLC, which has stuck owners and drivers with a model which has an exceedingly slow printer (called a line printer), which prints one line (and I suspect 1 character) at a time. The result is that every passenger (and the driver) has to wait for this printout to take place before the taxicab ride has come to an official end.

The needed estimates and cost of this delay is calculable as follows:

Needed Estimates I estimate that the printout takes about 15 second, done while the taxicab is stationary. There are the same 12,187 cabs; 1.5 passengers per ride; and $40 per hour average value of time; the cab's motor is still running, with resulting waste of gas, oil, wear and tear, and damage to health, loss to the environment and economy (including increased medical costs) - which I estimate (probably too conservatively) at $6 per hour.

Cost of This Taxi-Receipt Printout Delay

The formula to calculate the annual cost (without any adjustment for income-tax ramifications) is: (15 x 27.5 x 1.5 x 2.5 x 12,187 x 46 x 365) divided by (60 x 60). If you will look above, you will see that this is the same formula and results in the same (but additional) annual cost of $87,922,540.

Here's Another NYC Yellow Cab Waste - $30 Million or More Per Year

You may have reached your limit in hearing about NYC yellow-cab waste, but the waste continues. Here's another inadvertent waste:

About 10-12 years ago, the TLC passed a rule requiring each yellow cab in NYC to play a pre-recorded message to passengers at the start (and at the end) of each cab ride. The message is non-political and non-commercial, and (by the way) non-sense, saying something like "Hi, I'm Johnnie Sparks, with plenty of experience in the Broadway theatre, and I urge you to buckle up and not take a chance. Remember, buckle up and you will have the best chance of not getting hurt."

I've heard similar messages for the past 10 years or so, always at the start of the cab ride, and often making it impossible for me to give directions to the cab driver until the recorded message stops.

If, on the average, there is a loss of 5 seconds per trip, waiting for the message to end, then the annual cost to NYC residents, citizens and visitors would be 1/3rd of $87,922,540, or about $30 million dollars per year. [Note: the recorded messages are each 10 seconds in length.]

In addition, each cab owner or owner/driver is required to buy or lease a new tape (using the recorded voice of a different local NYC personality) every 4 months, at a cost of about $25 (or $75/year), and to maintain the tape deck which plays the tape (at the start and end of each cab ride) and nothing else. With 12,187 taxicabs in NYC, we're dealing with an annual cost of 12,187 x $75 or $914,025 plus the cost of maintenance and occasional replacement of the tape deck, and the cost (approximately 1 hour plus gas, oil, and wear and tear) involved in traveling to one of the 12 "meter shops" which install the tapes every 3 months. This required tape may well have a constituency involving the persons or persons at the TLC who select the personalities who record the new tapes and possibly (or presumably) receive compensation for such activity (or perhaps record the tapes for free), and the personalities who are actually selected by the TLC.

3/31/03 Note: For purists, it appears that the message is placed on a chip. See the press release describing the message-on-a-chip at Press Release Concerning NYC's Recording on a Chip.

In Conclusion

Imagine, at least a quarter-billion dollar annual waste involving only regulated yellow cabs in NYC, consisting of (1) $88,000,000 in wasted time filling out the required trip ticket; (2) $11,000,000 in additional meter time while the trip ticket is being filled out; (3) $88,000,000 in wasted time while the meter receipt is printing out on a slow line printer built into the ancient taxicab meter required by TLC rules; (4) $30,000,000 in wasted time while a required pre-recorded, 10-second message plays at the start and end of the ride; and (5) $1,000,000 for the maintenance and replacement of the recorded tapes (or chips) - a total of $217,786,536 - or 1/4 BILLION DOLLARS - in waste per year in NYC alone!

One of these days, somebody should undertake to create an email list of persons interested in reducing governmental expenditures and keep us informed about what we can do to force government to reduce its unnecessary, adverse impact on citizens, residents and visitors, without curtailing the legitimate activities of the government.

I must add that I am pleased to note that the NYC TLC took it upon itself to eliminate one of these costly regulations. I hope it will do so with the others mentioned above, and any others they determine are equally undeserving as regulations.

If you have any ideas for another cost-benefit analysis relating to a government agency, please contact Carl E. Person at Response Form - E-Mail Your Proposal or any Question about this Website to Editor/Attorney Carl Person, and He Will Respond

Carl E. Person, Editor, LawMall, carlpers@lawmall.com
For the c.v. (resume) of Attorney Carl E. Person, click on Carl Person C.V.

Copyright 1997-2003 by Carl E. Person