A lawsuit brought against the New York City Taxi and Limousine Commission in New York by four credit unions was adjudicated on Friday. Queens Supreme Court Justice Allan Weiss ruled that the commission need not block the “pre-arranged transportation” generated by Uber, with the ruling preventing shutdown of the service in New York City. At stake is not only Uber’s continued existence in New York City, but the financial backbone in the city built around loans to acquire taxi medallions, valued at up to $1 million each.
The suit alleged that livery cars were prohibited from summoning transportation by smartphone, as such behavior mandates a taxi medallion. The ruling paves the way for Uber to continue to make inroads in the New York City cab market, which is now in decline as a result of the competition. The medallion resale market was estimated to be worth $10 billion prior to the Uber rollout.
Attorney Todd Higgins for the complainants said that “a catastrophe is unfolding, as an entire industry continues to be illegally destroyed, while elected officials allow it to happen on their watch. It is a stunning abdication of leadership and responsibility that will haunt New York City for years to come.” The attorney has already declared the complainant’s intention to appeal.
The judge disagreed with Higgins’ assessment of the situation. Judge Weiss declared that “any expectation that the medallion would function as a shield against the rapid technological advances of the modern world would not have been reasonable. In this day and age, even with public utilities, investors must always be wary of new forms of competition arising from technological developments.”
According to Crain’s New York Business, the Melrose Credit Union has 78 percent of its loan portfolio in taxi medallions. The Uber expansion is blamed for the decrease in medallion pricing, and idle cabs in the city clogging street-side parking in residential neighborhoods.
Taxi and Limousine Commission Chairwoman Meera Joshi said of the ruling that, “This decision is a victory for the riding public, and leaves no question as to the appropriateness of our regulatory approach to app-dispatched services.”
