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A Giant Game of Telephone: The Revel Tesla Model Y Taxi Situation Explained

Credit: Revel

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This is a preview from our weekly newsletter. Each week I go ‘Beyond the News’ and handcraft a special edition that includes my thoughts on the biggest stories, why it matters, and how it could impact the future.


Earlier this week, there was plenty of talk about the Revel taxi fleet in New York City, comprised of 50 Tesla Model Y all-electric crossovers that would contribute to the ride-sharing services that the Big Apple has long been accustomed to over the past century. As the automotive sector has transitioned to a more sustainable look and feel, taxi companies are also putting their hand in the cookie jar, adding sustainable vehicles to their fleets, and taking gas-powered machines off the road.

Revel is an independent company attempting to make this happen. The company has 50 Model Y taxis ready to take on the streets of Manhattan and the other boroughs of New York. However, reports circulated earlier this week that the New York City Taxi and Limousine Commission blocked this possibility overwhelmingly with a five-to-one vote.

New York City Taxi and Limousine Commission: A Giant Game of Telephone

While the reports from various media outlets, including our own, highlighted the spectacle, which seemed to be an incredible chance of corruption, there was actually a huge misunderstanding. New York City TLC’s Deputy Chief of Public Affairs, Allan Fromberg, took some time out of a busy Thursday to talk to me, clarifying the situation that has been misconstrued since its original report.

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Tesla Model Y taxi fleet successfully blocked by NY commission

After getting in touch with Mr. Fromberg on Thursday, we talked about the initial reports. “The whole narrative that Revel would have to buy 50 gas cars to then convert to EVs is just a giant game of telephone. In fact, for Revel to bring on its 50 BEVs, they would have to replace 50 existing, already-licensed vehicles, and not new vehicles.”

Initial reports indicated that TLC Commissioner Aloysee Heredia Jarmoszuk stated that congestion was why Revel wasn’t granted licenses. In fact, this is true. Revel was never required to purchase 50 gas vehicles, which didn’t make much sense from the get-go. In my initial communication to Mr. Fromberg, I stated that the contradictory nature of the TLC’s implied decision to block Revel’s Model Y fleet because of congestion, but then suggest 50 additional gas-powered vehicles needed to be purchased didn’t make much sense.

Fromberg agreed and said that this misconception was due to the aggregation of media reports looking to push out this controversial angle of the story quickly.

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Mr. Fromberg then explained what the vote on Tuesday evening entailed, straight from the TLC Commissioner’s mouth.

2018 Legislation: The Taxi Cab “Cap”

Ms. Jarmoszuk said:

“First and foremost, no one and no entity has been blocked. The public meeting/vote was neither about electric vehicles nor about any particular company nor about car models. Rather, the public meeting was about vehicle licenses, which are presently capped since the market is saturated and distressed, with low performance as a result of the pandemic and previous market stressors. Presently, there are nearly 100K vehicle licenses, which is too large a supply for current passenger demand. The public meeting was about ensuring mechanisms to properly manage applications for new/additional licenses against current ridership numbers/needs.”

This is actually in reference to series of five pieces of legislation that were passed in 2018. According to the New York City Office of the Mayo, on August 14th, 2018, Mayor Bill de Blasio signed the following pieces:

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144-B: Requiring the TLC to stop issuing for-hire vehicle licenses for 12 months, to study congestion and various aspects of the industry, and after the study, allows the TLC to establish vehicle utilization standards and regulate the number of for-hire vehicle licenses;

634-B: Waiving licensing fees for accessible taxi-cabs and for-hire vehicles;

838-C: Pertaining to the licensing and regulation of high-volume for-hire vehicle services;

890-B: Directs the TLC to establish rules to provide minimum payments to high-volume for-hire vehicle drivers;

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958-A: Reducing penalties for unauthorized street hails.

Really, 144-B, 634-B, 838-C, and 890-B are the four pieces that are relevant to this story. In 2018, 144-B halted the licensing of any additional “For-Hire” vehicles, meaning taxis or ride-hailing vehicles. Simply put, there was an incredible number of vehicles on the streets of New York, and congestion was becoming a real issue there. The “cap” limit on the number of vehicles was enforced in 2018 and was set to last one year. Mr. Fromberg informed me that this legislation has been extended and renewed several times and is still effective to this day. Therefore, the City still will not license any additional vehicles. When one fails or loses its license, a new vehicle takes its place.

There are several other reasons for this, including fair wages for drivers and affordability for taxi companies. But, unfortunately, drivers were suffering and still are due to the COVID-19 pandemic. While many of the economic negativities are finally beginning to subside, 2020 was an ugly year for the NYC taxi sector. Many drivers weren’t making enough money to afford loan payments on medallions. Unfortunately, some of these drivers took their own lives, and it is an absolute tragedy that this occurred.

With that being said, taxi drivers are hard-working, and they deserve to make enough money to feed their families. In the 2018 passing of these legislative pieces, De Blasio said, “We’re putting hardworking New Yorkers ahead of corporations. We are taking immediate action for the benefit of more than 100,000 hard-working New Yorkers who deserve a fair wage and halting the flood of new cars, grinding our streets to a halt.” The changes increased take-home pay for drivers by approximately 20 percent on average — more than $6,000 per year.

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With all of that being said, New York City is operating with a substantial number of taxis, and the TLC has granted nearly 100,000 vehicle licenses. Before any more vehicles can obtain one of these licenses, some of the current vehicles must lose their licenses through expiration or vehicle removal in a company’s fleet. When 50 licenses open up, Revel will have the ability to obtain them, giving the company full rights to operate as a ride-sharing service, just as it aims to do.

To Mr. Fromberg’s knowledge, there would be no cost for Revel to go through the normal administrative procedure to obtain the licenses.

Revel’s Response: EV Taxis are a necessity to NYC

Revel CEO Frank Reig is under the impression that the TLC is operating under “shortsighted bureaucracy and entrenched interests,” according to a Tweet from Wednesday night.

After the Tuesday hearing, Reig said:

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“At today’s hearing, the Taxi and Limousine Commission offered no evidence or analysis to support ending the EV exemption. The Commissioners sat through almost 3 hours of testimony on all sides yet asked zero questions and spent zero time deliberating before making a policy decision with profound consequences. The TLC never intended to consider what drivers and New Yorkers had to say, and only cared about jamming through this vote on Primary Day with as little scrutiny as possible. This decision doesn’t change the fact that New York City needs an alternative to the predatory leasing system that exploits drivers and pollutes our environment, and Revel is exploring ways to accomplish that.” 

Revel told Teslarati earlier today that it is aware that the TLC is not recommending the purchase of 50 gas-powered cars. The company is also aware that the TLC has capped the number of licenses it would issue. In order to encourage the adoption of electric cars, Revel spokespeople said that additional licenses would be given to wheelchair-accessible vehicles and EVs. A few hundred EVs have been added to the NYC Taxi fleet in the past two years, but these cars only account for .5% of the total number of For-Hire vehicles on NYC’s streets.

Tesla Model 3 wins hearts as famed NYC Taxi, picks up where Nissan Leaf couldn’t

This rule is brought up every six months and was last addressed and subsequently renewed in February. That means that it was due for review in August. However, the TLC brought the issue to light early and revoked the rule. The TLC says that if Reval wants to operate a rideshare service with its fleet of 50 Model Ys, they will have to obtain the licenses from displaced and no-longer-active taxis in the city.

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Revel states that it would take two to three additional vehicles off of the street because the company will hire TLC-licensed drivers, who will no longer lease gas-powered vehicles. In addition, revel owns the vehicles, and different drivers will use the same car through different shifts, which could become a long-term advantage for the TLC as fewer cars will be on the street.

This would also line up with the Legislature items 634-B and 890-B, which would alleviate short-term leases and provide drivers with guaranteed wages, benefits, and vacation time.

The Bottom Line

The issue is this: Congestion is a real issue in the city. And while EVs only making up .5% of the total taxi fleet in the Big Apple, there is evidently no room for more vehicles, of any kind, in the City. Over time, the concentration of EV Taxis in the City that Never Sleeps will surely rise, but the existing vehicles need to be removed from the licensing pool before Revel can unleash its 50 all-electric Model Y taxis.

To summarize it easily, Fromberg said: “The TLC is fully committed to a 100% electrified future, just not at the cost of additional congestion.”

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A big thanks to our long-time supporters and new subscribers! Thank you.

I use this newsletter to share my thoughts on what is going on in the Tesla world. If you want to talk to me directly, you can email me or reach me on Twitter. I don’t bite, be sure to reach out!

-Joey


On behalf of the entire Teslarati team, we’re working hard behind the scenes on bringing you more personalized members benefits, and can’t thank you enough for your continued support!

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Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Tesla VP explains latest updates in trade secret theft case

Tesla reportedly caught Matthews copying the tech into machines that were sold to competitors, claiming they lied about doing so for three years, and continued to ship it. That is when Tesla chose to sue Matthews in July 2024 in Federal court, demanding over $1 billion in damages due to trade secret theft.

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tesla 4680
Credit: Tesla Inc.

Tesla Vice President Bonne Eggleston explained the latest updates in a trade secret theft case the company has against a former manufacturing equipment supplier, Matthews International.

Back in 2024, Tesla had filed a lawsuit against Matthews International, alleging that the firm stole trade secrets about battery manufacturing and shared those details with some of Tesla’s competitors.

Early last year, a U.S. District Court Judge denied Tesla’s request to block Matthews International from selling its dry battery electrode (DBE) technology across the world. The judge, Edward Davila, said that the patent for the tech was due to Matthews’ “extensive research and development.”

Tesla is suing a former supplier for trade secret theft

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The two companies’ relationship began back in 2019, as Tesla hired Matthews to help build the equipment for its 4680 battery cell. Tesla shared confidential software, designs, and know-how under strict secrecy rules.

Fast forward a few years, and Tesla reportedly caught Matthews copying the tech into machines that were sold to competitors, claiming they lied about doing so for three years, and continued to ship it. That is when Tesla chose to sue Matthews in July 2024 in Federal court, demanding over $1 billion in damages due to trade secret theft.

Now, the latest twist, as this month, a Judge issued a permanent injunction—a court order banning Matthews from using certain stolen Tesla parts or designs in their machines. Matthews is also officially “liable” for damages. The exact amount would still to be calculated later.

Bonne Eggleston, a VP for Tesla, said on X today that Matthews is a supplier who “exploited customer IP through theft or deception,” and has no place in Tesla’s ecosystem:

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Tesla calls this a big win and warns other companies: “Buyer beware—don’t buy from thieves.”

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Matthews hit back with a press release claiming victory. They say an arbitrator ruled they can keep selling their own DBE equipment to anyone and rejected Tesla’s request for a total sales ban. They call Tesla’s claims “nonsense” and insist their 20-year-old tech is independent. Both sides are spinning the same narrow ruling: Matthews can sell their version, but they’re blocked from using Tesla’s specific secrets.

What are Tesla’s Current Legal Options

The case isn’t over—it’s moving to the damages phase. Tesla can:

  • Push forward in court or arbitration to calculate and collect huge financial penalties (potentially $1 billion+ if willful theft is proven).
  • Enforce the permanent injunction with contempt charges, fines, or even jail time if Matthews violates it.
  • Challenge Matthews’ new patents that allegedly copy Tesla’s work, asking courts to invalidate them or add Tesla as co-inventor.
  • Seek extra damages, lawyer fees, and possibly punitive awards under the federal Defend Trade Secrets Act and California law.

Tesla could also refer evidence to federal prosecutors for possible criminal trade-secret charges (rare but serious). Settlement is always possible, but Tesla’s fiery public response suggests they want full accountability.

This isn’t just corporate drama. It shows why trade secrets matter even when Tesla open-sources some patents, confidential know-how shared in trust must stay protected. For the EV industry, it’s a reminder: steal from your biggest customer, and you risk losing everything.

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Tesla Cybercab includes this small but significant feature

The Cybercab is Tesla’s big plan to introduce fully autonomous ride-sharing in a seamless fashion. In fact, the Full Self-Driving suite was geared toward alleviating the need to manually drive vehicles.

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Credit: Tesla

Tesla Cybercab manufacturing is strikingly close, as the company is still aiming for an April start date. But small and significant features are still being identified for the first time as production units appear all over the country for testing and for regulatory events, like one yesterday in Washington, D.C.

The Cybercab is Tesla’s big plan to introduce fully autonomous ride-sharing in a seamless fashion. In fact, the Full Self-Driving suite was geared toward alleviating the need to manually drive vehicles.

This was for everyone, including the disabled, who are widely reliant on ride-sharing platforms, family members, and medical shuttles for transportation of any kind. Cybercab aims to change that, and Tesla evidently put a focus on those riders while developing the vehicle, evident in a small but significant feature revealed during its appearance in the Nation’s Capital.

Tesla Cybercab display highlights interior wizardry in the small two-seater

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Tesla has implemented Braille within the Cybercab to make it easier for blind passengers to utilize the vehicle. On both the ‘Stop/Hazard Lights’ button and the Door Releases, Tesla has placed Braille so that blind passengers can navigate their way through the vehicle:

This is a great addition to the Cybercab, especially as Full Self-Driving has been partially pointed at as a solution for those with disabilities that would keep them from driving themselves from place to place.

It truly is a great addition and just another way that Tesla is showing they are making this massive product inclusive for everyone out there, including those who have not been able to drive due to not having vision.

The Cybercab is set to enter mass production sometime in April, and it will be responsible for launching Tesla’s massive plans for an autonomous ride-sharing program.

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Elon Musk

Tesla and xAI team up on massive new project

It is the latest move by a Musk company to automate, streamline, and reduce the manual, monotonous, and tedious work currently performed by humans through AI and robotics development. Digital Optimus will be capable of processing and actioning the past five seconds of a real-time computer screen video and keyboard and mouse actions.

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Credit: Grok

Elon Musk teased a massive new project, to be developed jointly by Tesla and xAI, called “Digital Optimus” or “Macrohard,” the first development under Tesla’s investment agreement with xAI.

Musk announced on X that Digital Optimus will “be capable of emulating the function of entire companies.”

It is the latest move by a Musk company to automate, streamline, and reduce the manual, monotonous, and tedious work currently performed by humans through AI and robotics development. Digital Optimus will be capable of processing and actioning the past five seconds of a real-time computer screen video and keyboard and mouse actions.

Essentially, it will be an AI version of a desk worker in many capacities, including accounting, HR tasks, and others.

Musk said:

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“Grok is the master conductor/navigator with deep understanding of the world to direct digital Optimus, which is processing and actioning the past 5 secs of real-time computer screen video and keyboard/mouse actions. Grok is like a much more advanced and sophisticated version of turn-by-turn navigation software. You can think of it as Digital Optimus AI being System 1 (instinctive part of the mind) and Grok being System 2. (thinking part of the mind).”

Its key applications would be used for enterprise automation, simulating entire companies, high-volume repetitive tasks, and potentially, future hybrid use with the Optimus robot, which would handle physical tasks, while Digital Optimus would handle the clerical work.

Tesla announces massive investment into xAI

The creation of a digital AI suite like Digital Optimus would help companies save time and money, as well as become more efficient in their operations through massive scalability. However, there will undoubtedly be concerns from people who are skeptical of a fully-integrated AI workhorse like this one.

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From an energy consumption perspective and just a general concern for the human workforce, these types of AI projects are polarizing in nature.

However, Digital Optimus would be a great digital counterpart to Tesla’s physical Optimus robot, as it would be a hyper-efficient addition to any company that is looking for more production for less cost.

Musk maintains that there is no other company on Earth that will be able to do this.

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