You can be on Entrepreneur’s cover!

Taxi Owners, Lenders Sue New York City Over Uber The lawsuit accuses the city of allowing Uber to violate taxi drivers' privileges and destroy their livelihoods.

By Reuters

entrepreneur daily

This story originally appeared on Reuters

Reuters | Kai Pfaffenbach

Taxi owners and lenders on Tuesday sued New York City and its Taxi and Limousine Commission, saying the proliferation of the popular ride-sharing business Uber was destroying their businesses and threatening their livelihoods.

The lawsuit filed in Manhattan federal court accused the defendants of violating yellow cab drivers' exclusive right to pick up passengers on the street by letting Uber drivers who face fewer regulatory burdens pick up millions of passengers who use smartphones to hail rides.

According to the complaint, the number of Uber rides in the "core" of Manhattan increased by 3.82 million from April to June 2015 compared with a year earlier, while medallion cab pickups fell by 3.83 million.

They said this had driven down the value of medallions, which yellow cab drivers need to operate, by 40 percent from a peak exceeding $1 million and caused more defaults.

Uber's rise also contributed to the July 22 bankruptcy of 22 companies run by taxi magnate Evgeny Freidman, and the state's Sept. 18 seizure of Montauk Credit Union, which specialized in medallion loans, the complaint said.

"Defendants' deliberate evisceration of medallion taxicab hail exclusivity, and their ongoing arbitrary, disparate regulatory treatment of the medallion taxicab industry, has and continues to inflict catastrophic harm on this once iconic industry, and the tens of thousands of hardworking men and women that depend on it for their livelihood," the complaint said.

The Taxi and Limousine Commission referred requests for comment to the city's law department. Nick Paolucci, a spokesman there, said the city would review the complaint.

Plaintiffs include the Melrose, Progressive and Lomto Federal credit unions, which said they have made more than 4,600 medallion loans worth over $2.4 billion.

Other plaintiffs include individual medallion owners, as well as the Taxi Medallion Owner Driver Association Inc and League of Mutual Taxi Owners Inc, which said that together they represent about 4,000 medallion owners.

The lawsuit seeks compensatory and punitive damages, including for alleged violations of cab drivers' property and equal protection rights under the U.S. Constitution.

It also seeks to ease cab drivers' regulatory burdens, including a requirement that half of their cabs be accessible to disabled people by 2020.

In September, a state judge in Queens County dismissed a lawsuit by the credit union seeking to stop the city from supporting Uber's expansion.

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. 15-09042.

(Reporting by Jonathan Stempel in New York; Editing by Toni Reinhold)

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business News

'Wildly Inappropriate': Woman Says She Was Denied a Job Because She Didn't Wear Makeup During the Interview

Melissa Weaver was applying for a VP of HR job at a tech company via video.

Business Solutions

Streamline In-House Developer Work with This $40 Program

Microsoft Visual Studio features tools to help programmers code faster and build complex projects across different languages and platforms.

Marketing

You'll Never Succeed in a Complex Market Unless You Try These Strategies

Complex industries offer opportunities in market needs, potential profitability and expansion opportunities — but the key to being successful is developing and supporting a clearly differentiated value proposition that separates your organization from potential competitors. Here's how to do it.

Thought Leaders

These Are the Five Attributes of Highly Successful and Happy People

If you'd like to be happier or more successful this year, then ask yourself if you're truly exuding these five attributes. The happiest and most successful people I know execute on these game-changers exceptionally well.

Side Hustle

I Started a Semi-Passive Side Hustle That Earns $33,000 a Week on Amazon: 'Selling There Is a No-Brainer'

Dr. Jenny Woo wanted to create a product that would help people connect, and it turned out to be a lucrative one.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.