DOV Taxi Leases: Medallion Lease With a Car You Buy

In short: A DOV (driver-owned vehicle) lease lets you drive a yellow taxi by leasing the medallion by the week while buying the car through the same lease. TLC caps it at $952 a week for the medallion ($994 for a qualifying hybrid) plus $275 a week toward the car. Your total car payments can't go over $42,900, and then the title passes to you. The owner can take a refundable deposit of up to $5,000, may offer optional collision cover for up to $50 a week, and must credit $77 a week if they receive accessible-taxi payments from TLC's fund.

These are the rules in TLC's chapter 58, section 58-21(c)(4), and the DOV Driver Bill of Rights. This guide explains them in plain English; it is not legal advice. Keep every lease and receipt.

The lease caps

How long until you own the car? At $275 a week, the $42,900 cap is reached after 156 weeks, about three years (our arithmetic: $42,900 ÷ $275). After the cap is reached, or once title "could have passed", the $275 can't be charged any more (58-21(c)(4)(ii)(C)). You would then pay at most the medallion-only cap.

What the weekly payment must include

Under 58-21(c)(4)(v) the lease cap covers all of these. The owner can't charge you separately for them:

Extras the owner may charge

Only the charges listed in rule 58-21(c)(5) are allowed on top of the cap. For a DOV lease the main ones are:

• Credit card processing surcharge up to $49 a week.
• Security deposit (see below).
• Discounted E-ZPass tolls if you use the owner's E-ZPass.
• Late charge up to $50 for each weekly payment not received within 24 hours of when it was due.
• A cancellation charge, and reasonable damages for breaking the lease if the lease says so.
• Parking tickets and red-light camera tickets issued during your lease, if you are allowed to challenge them.
• MTA tax if the owner is the taxpayer, taken first from your credit-card money owed to you.
• State and local sales and rental taxes, and the Taxicab Improvement Surcharge.

There is no gas surcharge option for DOV leases (58-21(c)(4)(vi)), and no tips to the owner. The DOV Driver Bill of Rights adds that the owner keeps the MTA tax and Taxi Improvement Fund surcharges collected on your trips (and tolls when the owner's E-ZPass is used), and must pay you all credit card fares at the end of each week at no cost to you.

Deposit rules

The deposit must be held in an interest-bearing account under 58-21(e)(7). At the end, the owner may deduct only what the rules allow: unpaid lease charges, damage if the lease clearly says you are responsible, parking and red-light tickets during the lease, and remaining MTA tax. The owner may not use the deposit to pay summonses written to the owner (58-21(e)(3)).

Collision cover and damage

The owner or agent may offer collision and physical damage coverage for no more than $50 a week, with a deductible of no more than $250 per incident, and cannot require you to buy it (58-21(c)(4)(v)(G)). If you paid a deductible and the owner later gets insurance or lawsuit money for that repair, the owner must pay you back the deductible. If you didn't take the cover and paid for damage yourself, and the owner later recovers money from someone else, the owner must refund what you paid (item I).

When the car is off the road

If the car is unavailable for a reason that is not your responsibility, the weekly payment must be pro-rated (58-21(c)(4)(vii)). TLC gives examples of what doesn't count as "unavailable": required maintenance, repairs caused by poor maintenance, or a required TLC inspection. Under a DOV lease the owner doesn't have to maintain the car, but can't force you to use a particular repair shop (58-21(b)(3)).

Fines from the owner's side. A DOV driver can be charged reasonable damages in the lease for some owner fines that the driver caused, such as fines from unauthorized operation by a suspended or revoked driver, or a missed inspection when the owner can show you knew the date (58-21(c)(5)(x)). Other owner fines can't be passed to you.

Getting title

Title must pass to you (or one of the lessees), if you ask, once all vehicle financing costs are paid (58-21(c)(4)(iii)). The owner can hold the title if you haven't made all payments due for the car. Your lease must list the vehicle sale price and an itemized total of all other costs you must pay before title passes (DOV Driver Bill of Rights). Ask for a running statement of your vehicle payments against the $42,900 cap.

Your rights and where to complain

• The lease must be in writing, signed by both of you, with a copy for you; it must show start and end dates and every charge with the TLC rule that allows it.
• You get a receipt for every payment and credit showing the date, your name, medallion number, reason, amount and the TLC rule.
• The owner can't retaliate against you for complaining to TLC.
• Overcharge penalty: $500 first violation; $1,000 and/or up to 30 days' medallion suspension after that, plus restitution of the excess (58-21(c)).
• Driver Protection Unit: 718-391-5539 or driverprotection@tlc.nyc.gov. It handles lease overcharges, unreturned deposits and missing leases or receipts (O/DRC FAQ).

Is DOV right for you?

Compare the weekly total with a shift lease or buying a medallion outright. Our lease vs buy tool helps you run your own numbers; the lease caps for shift drivers are on a separate page. See also how many drivers can share a medallion lease, how to start driving a yellow taxi, buying a medallion and buying or leasing a TLC vehicle. Terms: DOV lease, medallion-only lease. More on the medallions hub.