NEW YORK—A state Supreme Court justice in Queens has ordered the administration of New York Mayor Bill de Blasio to appear in his court June 22 in response to four CUs suing the city over “illegal” street hails from ride-sharing services.
Judge Denis Butler is asking the city’s administration to discuss why the court should not compel the city to immediately stop ride-share companies such as Uber and Lyft from picking up riders who hail them via smartphone.
After threatening in April to sue New York City for allowing “illegal hails” by the popular ride-sharing service Uber, Melrose Credit Union took legal action last month, and has been joined in the suit by three other CUs that make taxi medallion loans. CUToday.info was first to report the Melrose action here.
Butler signed the order to show cause requested last week by the credit unions, who sued the mayor, his Taxi and Limousine Commission, and state Attorney General Eric Schneiderman, Crain’s New York Business reported. The CUs involved are Melrose, the $174-million Montauk Credit Union, $718-million Progressive Credit Union and $278-million LOMTO FCU.
For the credit unions and their members, the emergence of new ride-sharing companies is a significant issue that threatens the value of the taxi medallions, which can cost upwards of hundreds of thousands of dollars each. Those loans also make up significant portions of some CUs’ portfolios.
“The city has left us no choice but to pursue legal action in the courts, and that is what we have done," Todd Higgins, an attorney for the $2.1-billion Melrose Credit Union, stated in a previous report.
The credit unions are seeking a preliminary injunction to force the city to enforce a law that prevents anyone but medallion Yellow Cabs from picking up street-hails.
Melrose claims Uber’s electronic hails are illegal and had sent letters to the Taxi & Limousine Commission and de Blasio threatening a suit if the city did not act. Uber and other ride sharing services such as Lyft, have had dramatic effects on taxi cab revenue in some markets.
Melrose CU argues city law gives only Yellow medallion taxis and “street hail liveries” (also known as Green Cabs) the right to accept hails from passengers — an exclusive privilege in exchange for hundreds of millions of dollars in revenue from medallion sales.
In January, the Taxi & Limousine Commission (TLC) defined in new rules that a hail is a request for a taxi through calling out, raising a hand — or using an electronic method like an app, according to the MCU letter. David Pollack, director of the Melrose taxi action center, told CUToday.info in a previous interview that the TLC has not been enforcing the new rule and Uber drivers are taking advantage.
Uber disagrees with the idea that e-hails and street hails are identical. Yellow Cabs “are still the only people who can pick up off the street,” Josh Mohrer, Uber’s general manager in New York, told Crain’s New York Business. “That’s a fundamental difference.”
Uber executives also say the drop in Yellow Cab revenue—which city officials have pegged at about 5% over the last year—is partially attributable to competition from the new Green Cabs, which can pick up street hails in the outer boroughs and northern Manhattan, but not at airports, the publication reported.