The company that has been booting cars in New York City since 2012 has been kicked to the curb because the city “placed a thumb on the scale” in favor of a competitor, legal papers charge.
The city hired a company that lacked “any relevant experience” and NYC will lose revenue, according to a lawsuit PayLock filed against the city, the Department of Finance and the winning contractor, RIS NYC.
PayLock provides self-releasing boots that drivers can take off after paying their fines over the phone and receiving a code.
The company boots about 400 cars a day in the city, sniffing out scofflaws with license-plate readers. PayLock brought in $93 million in parking and traffic fines for the city in 2018 alone, legal papers say. The company was paid $88 million over five years.
The city Department of Finance decided last year to seek new vendors with proposals evaluated by a four-person panel of unidentified department employees.
Three out of four members of the panel graded PayLock higher than competitor RIS, legal papers say. A fourth reviewer initially gave PayLock a grade of 91, but then revised the score to 84 points while giving RIS a 100, which allowed it to win the contract, court papers claim.
RIS is a joint venture between Republic Parking System, which operates parking, towing and booting services, and KenBen NYC, a mash-up of Brooklyn-based towing and real estate companies. It was formed just six months after the city asked for proposals.
Republic has operated only in smaller cities like Omaha, Nebraska — with traditional boots that are not self-releasing — and KenBen Industries has been rated the “worst-performing tow company” in the city’s scofflaw program, court papers say.
RIS’ proposal at $83 million over five years was $10 million less than PayLock’s. The vendors are paid out of the boot fees charged to car owners. But PayLock alleges that RIS doesn’t have enough equipment to boot 120,000 cars a year and bring in the same amount of revenue for the city.
RIS took over Friday, but court papers say there may be a 10-day transition period when no booting will take place, something PayLock alleges will cost the city millions.
“There are certainly some red flags,” said Councilman Ritchie Torres, chair of the Oversight and Investigations Committee, which has started a preliminary review. “It appears that the winning bidder had no real track record of implementing an automated booting program.”
Justin Kennedy, CEO of PayLock said: “We have never seen a procurement process like this anywhere in the country and we hope that it will be thoroughly investigated.”
A lawyer for RIS did not return a request for comment. In court papers, the company says it will be more efficient than PayLock by using “predictive analytics” to “identify streets that have the greatest likelihood of scofflaw vehicles being parked.”
“The contract was awarded fairly and appropriately, and we do not anticipate any gaps in service. We are reviewing the suit,” City Hall spokeswoman Laura Feyer said.