NEW YORK—New York City taxi owners and credit unions are once again suing the city and its Taxi and Limousine Commission.
The latest lawsuit, filed Tuesday in Manhattan federal court, accuses city regulators of easing the pathway for ride-hailing services to operate with fewer burdens, saying the proliferation of the popular ride-sharing business Uber was destroying their businesses and threatening their livelihoods, Reuters reported.
In September a city judge ruled against three lawsuits that alleged Uber is operating illegally in the Big Apple. The those lawsuits, filed by a group of taxi medallion CUs, medallion owners, and taxi companies against the city of New York, alleged that the city has allowed Uber to illegally pick up street-hail passengers. The plaintiffs in that lawsuit were the $2.1-billion Melrose CU, the $174-million Montauk Credit Union, $718-million Progressive Credit Union and $278-million LOMTO FCU.
Melrose, Progressive and LOMTO are also plaintiffs in the latest lawsuit, and in the complaint state they collectively have made more than 4,600 medallion loans worth more than $2.4 billion. In September, the New York State Department of Financial Services placed Montauk into conservatorship citing “unsafe and unsound” conditions at the credit union.
Other plaintiffs in Tuesday’s lawsuit include individual medallion owners, as well as the Taxi Medallion Owner Driver Association Inc. and the League of Mutual Taxi Owners Inc., which said that together they represent about 4,000 medallion owners.
The complaint details that 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. Plaintiffs allege that has driven down the value of medallions, which Yellow Cab drivers need to operate, by 40% from a peak exceeding $1 million and caused more loan defaults.
"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 lawsuit seeks compensatory and punitive damages, including for alleged violations of cab drivers' property and equal protection rights under the U.S. Constitution.
NCUA data shows that Montauk delinquencies rose to 2.96% through June, and had been steadily increasing in the past year. In just six months, ROA dropped from 1.09% at the close of 2014 to -2.36% through June. Capital fell from 12.35% at the end of the year to 10.34% by the end of June.
Delinquencies at Progressive have leveled off at 1.04%, but capital has remained extremely strong and stable in the past year, ending June at 39.94%. Delinquencies are down at Progressive from just over 2% at the end of the year.
But the situation is not as good at Melrose CU, where delinquencies and troubled debt increased 25% over the two-month period ended July 31. Capital stood at 18.04% through June.
LOMTO delinquencies stood at 3.68%, and the CU’s capital was 16.73% through June.
Todd Higgins, the lawyer representing the coalition of taxi companies and credit unions in the initial lawsuit, in a previous report commented on the impact Uber is having on the taxi industry stating: “A catastrophe is unfolding, as an entire industry continues to be illegally destroyed.”