Bloomberg News

N.Y. Livery Car Groups Sue Over Smartphone Taxi-Hail Program

February 14, 2013

Livery car groups sued the New York City Taxi & Limousine Commission to stop a program that allows riders to hail taxis using smartphones from going into effect.

The Livery Roundtable, Black Car Assistance Corp. and several car-service firms filed a complaint today in state court in Manhattan alleging that the program violates city codes and discriminates against the elderly, who are less likely to own smartphones.

The new program, which a lawyer for the city said could start next month, also “fundamentally overhauls the city’s long-standing transportation policy that has drawn a clear, bright-line” between medallion taxis authorized to pick up street hails and black cars that must be hired by appointment, according to the complaint.

“This is not what street-hailing typically entails,” Randy Mastro, a lawyer for the livery groups, said to Manhattan Supreme Court Justice Arthur F. Engoron at a hearing today. “The procedural violations here are myriad.”

Under the anticipated yearlong pilot program, riders could use downloadable smartphone applications to summon nearby taxis to their location. Application providers would have to demonstrate compliance with commission guidelines and ensure that services are only provided by properly licensed drivers, according to the TLC.

‘Wild West’

“TLC believes the applications are going to come out on the market anyway,” Michelle Goldberg-Cahn, a lawyer for the city, told the judge. Without regulations, “it’s going to be a Wild West situation,” she said.

Engoron scheduled a hearing Feb. 28 on the livery groups’ request to halt the program. Approved e-hailing could begin as soon as March 2, Goldberg-Cahn said.

The suit comes as services such as Uber, Hailo, GetTaxi and Flywheel are already competing to sign up passengers and drivers in other cities, such as San Francisco and Chicago. In December, the TLC voted 7-0, with two abstentions, to allow for the pilot e-hailing program in New York.

In an e-mailed statement today, TLC Commissioner David Yassky said that the suit “seeks to keep the taxi industry and New Yorkers in the dark ages.”

“Our rules allow for e-hail now, and the only question is, do we embrace these new services and ensure that consumer protections are in place, or listen to obstructionists and watch e-hail apps proliferate without any regulatory input,” he said.

‘Outer Boroughs’

Engoron, who worked as a cab driver in the city more than 40 years ago, blocked a plan last year by the state to allow livery drivers to pick up passengers who hail them from the street in areas outside much of Manhattan, the so-called “outer boroughs” where taxi drivers are sometimes unwilling to go.

The plan, challenged by taxi groups, violated the “home rule” clause of New York’s Constitution, which restricts the state Legislature’s power to interfere in local affairs, Engoron found.

Under city regulations, only yellow cabs are permitted to pick up fares on the street, while car services are legally limited to calls dispatched by radio.

The case is Black Car Assistance Corp. v. The City of New York, 100327-2013, Supreme Court for the State of New York, County of New York (Manhattan).

To contact the reporter on this story: Christie Smythe in New York at csmythe1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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