A New York judge handed a big victory to Uber and other ride-sharing services while delivering a crushing blow, and an economics lesson, to old-fashioned taxi companies.
Judge Allan Weiss, in Queens, dismissed a challenge to the ride-sharing platforms brought by four credit unions with financial investments in yellow-cab medallions.
The credit unions argued that these services were encroaching on the traditional taxi’s exclusive right to pick up people hailing a cab without a reservation by being virtually hailed on their respective apps, but Weiss was having none of that.
“Any expectation that the medallion would function as a shield against the rapid technological advances of the modern world would not have been reasonable,” the judge wrote in his decision. “In this day and age, even with public utilities, investors must always be wary of new forms of competition arising from technological developments.”
But Todd Higgins, who represents the credit unions, said caving in to the ride-sharing apps by politicians and the judicial system would damage New York City and destroy the taxi industry.
“A catastrophe is unfolding, as an entire industry continues to be illegally destroyed, while elected officials allow it to happen on their watch,” he wrote, alluding to defendants Mayor Bill de Blasio of New York City and state Attorney General Eric Schneiderman, Crain’s reported. “It is a stunning abdication of leadership and responsibility that will haunt New York City for years to come.”
According to the New York Daily News, the rise of Uber, Lyft and other ride-sharing services could mean major financial trouble for credit unions that have backed taxi cab medallions as the value of those medallions has fallen 30 percent since 2013, from $1 million to $700,000.
But the judge said it’s not the court’s job to level the playing field.
“It is not the court’s function to adjust the competing political and economic interests disturbed by the introduction of Uber-type apps,” he wrote.
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