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Judge: Uber's E-Hails Are Legal, Taxi Industry Must Be "Wary"
By
Emma Whitford
Published Sep 10, 2015
Modified Sep 10, 2015
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Emma Whitford/Gothamist
By
Emma Whitford
Published Sep 10, 2015
Modified Sep 10, 2015
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A Queens judge has dismissed a lawsuit filed this spring by four bigwig taxi medallion lenders, who argued that the e-hails favored by car services like Uber and Lyft are no different from physical hails—the kind that involve waiving your arm in the air and stepping off of the curb—and are therefore illegal if conducted by any driver without a yellow taxi medallion affixed to his or her vehicle.
Queens Supreme Court Justice Allan Weiss ruled that e-hails (or "app-dispatched calls" in official TLC terminology) are in fact distinct from physical hails, and therefore legal. “Passenger communications to Uber-type companies via a smartphone are not street hails, which are requests made by passengers standing on the street who gesture or make an utterance," she wrote in her decision.
The lenders' motivation for filing suit is not hard to discern. This summer, Uber waged a successful PR war against Mayor de Blasio, and managed to roll back legislation that would have temporarily capped its growth. The startup, valued at $50 billion, recently touted that it adds 25,000 New Yorkers to its platform each week. In the meantime, yellow taxi pickups decreased 10% in the first half of 2015, from 85.5 million to 77 million; Bloomberg reports that the value of the medallion, which peaked at more than $1 million in 2013, has slipped considerably—they're now selling for as little as $650,000 each.
If at all. In Greenpoint, where hundreds of unused yellow taxis have recently turned the blocks surrounding dispatcher McGuinness Management Corporation into a "taxi graveyard," dispatchers recently scoffed at a pile of dusty medallions that they haven't bothered to affix to vehicles. "Who's going to buy them?" said dispatcher Hossam Yossri. "There's no point in these stupid things."
The four lenders who filed suit against the TLC, Mayor de Blasio, and Attorney General Eric Schneiderman—Melrose Credit Union, Montauk Credit Union, Progressive Credit Union and LOMTO Federal Credit Union—have close to $2.5 billion in medallion loans in 5,000-plus medallions. If medallion owners are unable to make payments, those hefty loans will default.
Attorney Todd Higgins, who is representing the lenders, reportedly plans to appeal. "A catastrophe is unfolding, as an entire industry continues to be illegally destroyed, while elected officials allow it to happen on their watch,” he said in a statement.
In her own statement, TLC commissioner Meera Joshi called the ruling a "victory" adding that, "passengers will remain free to continue to enjoy the many transportation options available to them, whether new, more traditional, or both."
"Any expectation that the medallion would function as a shield against the rapid technological advances of the modern world would not have been reasonable,” said Judge Weiss in his ruling. "In this day and age, even with public utilities, investors must always be wary of new forms of competition arising from technological developments."
We have reached out to Uber for comment, and will update with any additional information.
Tagged
e-hail
medallion
Street hail
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uber
Emma Whitford
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