A group of New York City yellow taxi medallion owners and the credit unions that finance them filed a complaint yesterday against the New York City Taxi and Limousine Commission (TLC) over alleged disparate regulatory treatment of smartphone ride hailing apps, such as Uber. The plaintiffs claim that the TLC’s decision to exempt Uber and its drivers from the requirements imposed on yellow cabs (including surcharges, mandatory vehicle requirements, and strict medallion leasing rules) rises to the level of a regulatory taking under the Fifth Amendment.
The medallion owners argue that taxicab medallions are a “protectable, vested property interest” that has lost up to 40% of its value since the debut of Uber and similar services. The plaintiffs further allege that the TLC has all but eliminated the yellow cabs’ monopoly on street hails in New York City, codified in 2011 in exchange for requirements to increase the number of handicap accessible cabs. According to the plaintiffs:
This dispute arises from the collapse of the regulatory structure governing for-hire transportation in New York City, amidst the government-sanctioned proliferation of smartphone technology being used by companies like Uber Technologies, Inc. to bypass taxicab medallions and allow passengers to electronically hail a parallel network of unlicensed on-demand vehicles . . . Defendants’ deliberate evisceration of medallion taxicab hail exclusivity, and their ongoing arbitrary, disparate 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.
In addition to the Takings Clause of the Fifth Amendment, the complaint includes claims under the Fourteenth Amendment’s Due Process and Equal Protection Clauses, New York State constitutional claims, and a state law fraud claim.
A judge has not yet been assigned in the case.