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Uber wins in NYC lawsuit filed by limo lobby, clearing the way for city to test e-hail apps

Uber wins in NYC lawsuit filed by limo lobby, clearing the way for city to test e-hail apps


A judge has ruled that the Taxi and Limousine Commission's e-hail pilot program is legal

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nyc taxis

A court ruling in Manhattan today represents one more incremental step in the drawn-out battle between transit regulators, established interests, and companies that hope to change the way the taxi industry works. Technically, it was the New York City Taxi and Limousine Commission (TLC) that won today. But it's also a triumph for Uber, Hailo, and similar startups that hope to bring hail-by-smartphone taxi service despite fierce opposition from established members of the city's complex transit industry.

The suit alleged that the city's plan to test out e-hail apps would blur the legal distinction between taxis and livery services (also known as black cars). The group cited seven causes of action including allegations that the TLC had violated its own rules for pilot programs, a claim that e-hail apps will have a discriminatory effect on the elderly, and a claim that the program violates city rules because it did not perform an environmental impact study. Today, Judge Carol Huff dismissed these charges one by one, mostly on technicalities. As for the claim of elderly discrimination, Judge Huff said, "there is no clear evidence that the program will have a potential disparate impact on the elderly."

The group cited seven causes of action

Taxi service apps have run into opposition from regulators and local car service companies in San Francisco, Chicago, Boston, Washington, D.C., and others. New York City initially barred Uber and its competitors from launching an e-hail service, which would allow customers to call a street cab on the spot. Then in December, the TLC approved a year-long "pilot program" that would test out a few apps in a limited area in order to ensure smooth integration with existing payment systems and regulations.

The pilot program was expected to roll out in mid-March when a lawsuit was filed in the New York Supreme Court by the Black Car Assistance Corporation, The Livery Round Table, and other members of the industry. With the exception of Arthur Harris, an elderly person who does not own a smartphone, the judge noted that petitioners all have financial interests in businesses that operate car services in New York. Later, City Council members Ydanis Rodriguez and Elizabeth Crowley also supported the lawsuit.

"The market will ultimately decide which apps rise or fall"

"This decision is a victory for all the riders who want to decide for themselves what technologies and services they want to use," TLC commissioner David Yassky said in a statement. "The market will ultimately decide which apps rise or fall and we have an obligation to give the riding public that choice." New York City Corporation Counsel Michael A. Cardozo added, "The TLC must be able to pilot new technology like e-hail apps to stay on the cutting edge of industry and to best serve the public."

New York City has proved to be a challenging market for Uber and its competitors, which include Hailo, GetTaxi, and others. Today's court ruling all but ensures that the pilot program will proceed and entrenched interests will have to adapt. Still, this is a fight that will be fought over and over in other cities as taxi startups expand.