(Adds New York City comment)
By Jonathan Stempel
NEW YORK, March 30 A federal judge on Thursday
dismissed a lawsuit by taxi owners and lenders accusing New York
City and its Taxi and Limousine Commission of jeopardizing their
survival by imposing burdensome regulations and letting the Uber
ride-sharing service take passengers away.
U.S. District Judge Alison Nathan in Manhattan said credit
unions, medallion owners and trade groups failed to show they
were denied due process or equal protection by having to obey
rules on fares, who they can pick up, vehicle equipment, and
access for disabled people that Uber drivers need not follow.
While the city's ground transportation industry "may well,
as plaintiffs allege, be rapidly evolving," the differences in
how yellow cabs and ride-sharing services serve passengers,
including whether rides are hailed on the street or by
smartphone, "easily justify" such distinctions, Nathan wrote.
The growth of services such as Uber and Lyft in New York
has caused the value of a medallion, essentially the right to
operate a yellow cab, to fall by more than half from its $1.3
million peak in 2014, according to recent sale listings.
That has left lenders facing greater delinquencies from
drivers who owe more than their medallions are worth, even as
they risk losing additional market share.
"Make no mistake about it - we fully expect the fight on
behalf of the New York City taxicab industry to continue in
state and federal court for as long as it takes," Todd Higgins,
a lawyer for the plaintiffs, said in an email after Nathan
issued her 33-page decision.
Nick Paolucci, a spokesman for the city's law department, in
an email said the decision "recognized TLC's broad jurisdiction
and the complex dynamic of the regulator's role in industries
experiencing rapid change."
Among the plaintiffs were the Melrose, Progressive and Lomto
Federal credit unions, which said they had made more than 4,600
medallion loans worth over $2.4 billion.
Two of the other plaintiffs were the League of Mutual Taxi
Owners and the Taxi Medallion Owner Driver Association, which
together represent about 4,000 medallion owners.
Nathan said the city had a rational basis to treat yellow
cabs differently, citing needs to promote safety, convenience
and fare uniformity given that only those cabs could pick up
passengers off the street.
She said it was premature to call the alleged deprivation of
cabs' "right to hail exclusivity" an unconstitutional "taking"
without just compensation, saying the plaintiffs could seek some
redress through a state administrative proceeding.
The case is Melrose Credit Union et al v City of New York et
al, U.S. District Court, Southern District of New York, No.
(Reporting by Jonathan Stempel in New York; Editing by Tom
Brown and Leslie Adler)