Reforming Rules for Taxis and Limousines

In Black Car Assistance Corp. v. City of New York, Justice Carol E. Huff of the Civil Branch of the Supreme Court, New York County, ruled Tuesday dismissing a lawsuit by livery cab owners against the Taxi and Limousine Commission’s (TLC) pilot program enabling riders with smartphones to summon yellow cabs for pick-up. Fares could also be paid electronically through the app. The program was adopted by the TLC in December 2012.

Livery-cab companies and black-car owners argued that the program would cut into their business of pre-arranged rides with customers. They also argued that the program could be discriminatory against elderly riders because they tend to lack smartphones. But New York State Supreme Court Justice Huff found the plaintiffs’ arguments without merit writing “Any experiment to determine whether an e-hail program will work in New York City would require extensive participation to determine, for example, effects on street-hail availability and whether there would be sufficient numbers of participating taxi drivers to meet demand.”

This decision is a victory for all the riders who want to decide for themselves what technologies and services they want to use,” said TLC Commissioner and former Brooklyn Law School faculty member David Yassky. “The market will ultimately decide which apps rise or fall and we have an obligation to give the riding public that choice. Thanks to today’s ruling, they have that choice.”

The ruling removes a big hurdle for the TLC and the Bloomberg administration whose proposals to reform the taxi industry have faced obstacles in the courts. In June 2012, Judge Arthur F. Engoron of the Civil Court of the City of New York, New York County issued a temporary restraining order in Taxicab Service Association v. The State Of New York to block their proposed outer-borough street hail plan which would have allowed 18,000 livery cabs to take street hails in the outer boroughs and upper Manhattan. Two months later, Judge Engoron issued an opinion invalidating the state law that permitted the street hail plan on the grounds that its passage required “home rule” approval by the New York City Council aksing the Legislature to act on an issue concerning New York City. The case is now pending before the New York Court of Appeals. The TLC website states that the city currently has 3,237 yellow medallion cabs. A NY Times article reported that the cost of medallions hit a record high in 2011 when two were sold for $1,050,000 each.