NYC Judge: Taxis Must Compete With Uber, No Matter The Medallion Industry
from the bravo dept
If violence is the last refuge of the incompetent, as Issac Asimov's delightful line in Foundation tells us, then perhaps desperate lawsuits are the last refuge of the disrupted industry. There is simply no better example of this than the many groups affiliated with many city's taxi services and their many lawsuits against Uber. We've seen this dance play out in the past, with the disrupted industry flailing away in court, attempting to get the government and/or the law to protect its own business interests rather than competing with a disruptive newcomer. It almost never ends well for the old guard.
But it isn't just taxi companies themselves who have attempted to get into this mix against Uber. Take a case brought in Queens, for instance, in which Melrose Credit Union joined others in an effort to force Mayor de Blasio and New York's Taxi Commission to ground Uber on its behalf. Melrose Credit Union has most of its loan portfolio tied into medallion purchases, lending money to taxi companies in order that they could pay the once-expensive medallions. The problem, obviously, has been that taxis aren't making as much money as they used to because Uber is displacing them. As a result, taxi companies and drivers can't make enough to pay back the loans, the loans are defaulting, and Melrose Credit Union is freaking the hell out. They told as much to Queens Supreme Court Justice Alan Weiss. Weiss, as it turns out, was less than impressed.
“Any expectation that the medallion would function as a shield against the rapid technological advances of the modern world would not have been reasonable,” he wrote. “In this day and age, even with public utilities, investors must always be wary of new forms of competition arising from technological developments.”In other words: compete or die. And those really are the options, no matter what other legal actions might be taken or verdicts rendered. The fact is that the progress of technology will indeed march on and will create more efficient ways of performing within any given industry. Attempting to stem that flow with trumped up legal actions and proclamations of the industry's destruction would only work in the short-term, if at all. In this case, the court ruled that de Blasio and the Taxi Commission aren't required to keep Uber drivers from picking up customers. And why should they be? If the public wants the service, Melrose Credit Union would deny them that service on the argument that it will lose money? Judge Weiss wasn't having that.
Judge Weiss made clear that that’s not his concern. “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.Indeed it isn't, nor is it the court's function to countermand the Taxi Commission's stance that Uber rides are pre-planned rides, instead of hailed fares off the street, and therefore don't require a medallion. If medallions become less valuable, that's a problem for the medallion money-men to endure, not the public.
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Filed Under: cabs, competition, disruption, innovation, lawsuits, loans, medallions, new york, taxis
Companies: melrose credit union, uber
Reader Comments
The First Word
“Not as a reason to continue it.
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I wonder, where do limo drivers, shuttle buses, and cars-for-hire fall into all of this. They are exempt from medallions, right? So are they friends of Uber or do they also hate the competition?
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Limo *drivers* in NY need a Class E license, same as a Taxi driver. Shuttle buses are fixed-route, cars for hire (limo or anything under 16 passengers) require Livery plates and the driver must have a Class E.
In NY, anyway.
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If I may indulge in an anecdote, I was once travelling with a medium sized group on company business. We found it was cheaper to hire a limo that could hold us all than take two taxis. We found this because there were limos there waiting to be hailed and one of the limo drivers approached us to offer his services.
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Let me tell you a story about some cable companies....
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Compete or Die
Any investor's failure to understand that the risk of innovative disruption EXISTS marks them as incompetent as an investor or financier.
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Not as a reason to continue it.
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You can prove or disprove anything by NYC, it's too tangled to be rational. However, a more rational city has BANNED Uber:
http://xrepublic.tv/node/71929
Just for the record, I agree the judge is right that's not to be decided there; however, as same mode of people-carrier "Uber" employees / vehicles should be regulated otherwise just like taxis, except prevented from picking up when hailed.
Now, note that yet again, Techdirt is cheering JUST "Uber", not a mention of other corporations with same service.
And why is Uber valued at tens of billions in the stock market? Its service should cost about a quarter! Do you know how cheap it is to put up a web-site? Ebay does more for similar fees.
Geigner appears to be flooding Techdirt to re-build... whatever truthiness he had before yesterday's mega-flop.
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Re: You can prove or disprove anything by NYC, it's too tangled to be rational. However, a more rational city has BANNED Uber:
Mega-Flop sounds like a wonderful nickname for a certain body part of mine, so thank you!
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he's talking bout his cock
The one you can't get up?
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Re: he's talking bout his cock
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Re: You can prove or disprove anything by NYC, it's too tangled to be rational. However, a more rational city has BANNED Uber:
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Re: You can prove or disprove anything by NYC, it's too tangled to be rational. However, a more rational city has BANNED Uber:
Ahh, so now techdirt went from being a Google shill to being an Uber shill, right? You dropped your shilling contract with Google, which is why you have been so critical of them lately, and you started a new shilling contract with Uber because they are offering more. Always going to the highest bidder.
/Shill
"Its service should cost about a quarter!"
Why should laws be based on ensuring a minimum cost to a service? I think this shows your hatred for Uber. You don't care about safety or employee welfare (and do you have anything citing the employee benefits and labor laws taxi-cab drivers get and benefit from or extra vehicle regulations their vehicles must adhere to that regular and Uber vehicles don't adhere to), you only care about making Uber less competitive compared to the status quo.
I'm all for ensuring that Uber drivers face similar regulations as tax-cab drivers provided that the medallion system is abolished completely. The problem isn't about employee and safety standards that I'm concerned about. The issue is that a very limited, expensive, medallion is given to a very small select group of people that gives them special privileges over anyone else that have absolutely nothing to do with safety or employee welfare. Yes, let anyone be required to pass a safety test to become a taxi or Uber or whatever driver. Let them be required to pass a vehicle inspection test. Let them be able to have a special license including a business and safety license. Pass labor laws for those that are employees. But let anyone, including independents, have the same opportunity to enter the market without any limited licenses such as medallions. No more limited licenses. That garbage needs to end.
and I really don't see anything wrong with an app that provides the service of connecting independent, non-employee, drivers with people who need a ride. Now whether or not Uber falls in that category is debatable but I would argue that it shouldn't. You're not required to work a fixed schedule or to work when they call you or to work a minimum number of hours in a given period of time. You just go at your convenience at a location that's convenient enough for you for the pay at the time. You go as often or seldom as you like. No one is pressuring you to work a specific shift, it's at your complete discretion.
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Re: Re: You can prove or disprove anything by NYC, it's too tangled to be rational. However, a more rational city has BANNED Uber:
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There is NO uniform treatment in the US. Some states and localities do require taxi drivers be treated as employees while others do not. The tests to determine employee vs contractor are the same that Labor & IRS use. Uber is already running afoul of such tests in at least two jurisdictions that have ruled Uber drivers were employees.
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Re: You can prove or disprove anything by NYC, it's too tangled to be rational. However, a more rational city has BANNED Uber:
So let me get this straight. A service that helps someone get somewhere, one that requires real-world physical materials to perform (car, gas, drivers time) should cost pennies because it's "cheap to put up a website", but movies and music, which are entertainment and not "useful" in any other sense, MUST, by dint of LAW, cost many tens of *dollars* for every single instance it is experienced or else someone is "stealing" from someone. Do I have that about right?
Do you realize - at *all* - how patently ridiculous your priorities seem to *everyone else in the world*?
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You do realize that the second paragraph address this point exactly. Leave it to the angry commenter not to read beyond the first paragraph, huh?
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Anonymous Coward, Sep 11th, 2015 @ 12:39pm
He obviously didn't read the article.
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and I think this is the true reason Uber is hated among the shills here. It has nothing to do with employee benefits or safety standards or equality with taxi-cab drivers. It's that Uber competes with an undemocratically passed, publicly harmful, limit on competition that a small hand full of entities have managed to subvert the democratic process to obtain through politician buying. Uber creates equality, by letting more people equally enter a market, in a market where corruption has previously wrongfully bought inequality and the shills want their wrongfully bought inequality back.
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ftfy
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The government is supposed to be concerned with the public interest and not the private interests of some multi-billion dollar credit unions. That you care so much more about the multi-billion dollar credit unions over the public interest is proof of who you are really shilling for.
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Sheesh, don't even bother to hide your shilling or anything.
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How's the typewriter business doing?
Oh. Didn't I read that the Russians have re-instituted the use of typewriters in areas needing high security to avoid capture of information through Internet hacking?
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Re: How's the typewriter business doing?
Yes, and those who fail to comply get hit with a buggy whip.
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Market Disruption
Now I understand that there may be some difficulty in foreseeing or possibly even recognizing potentially disruptive technology coming down the pike, but why do the MBA's leave themselves vulnerable to the possibility? In this case, the ones that work for that credit union who over-positioned themselves with regard to funding medallion acquisitions.
I don't have an idea at the moment, but with disruption happening at an ever increasing rate one would think that there would be strategies in place to hedge bets made in every business plan. Maybe a sexier name for disruption would make it more status quo. Maybe there is another solution, but disruption isn't going away.
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Here's another "ride-sharing service" chiseling the public:
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Re: Here's another "ride-sharing service" chiseling the public:
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Can you please tell your peers that they should also be mindful of the wave of technological changes surrounding other monopolies and be brave in saying what you said.
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We should always be encouraging business models that are based on wealth creation and market efficiencies and attempting to undermine any business models that are based on political influence.
Uber has simply provided a business model that helps to disrupt a market inefficiency. What can be wrong with disrupting market inefficiencies?
It is wrong that taxis are lying idle and the "fix" is for the NY Taxi Commission to lower the regulated rates of using a taxi to be comparable to rates in Chicago, Philly, Wash DC, LA, etc.
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Ponzi Scheme
Of course it the court's function to countermand the TLC stance that Uber rides are pre-planned rides, instead of hailed fares off the street.
TLC stance vis-a-vis UBER e-hails it is already known and on the record: "e-hails is just that; hails"
There is nothing for the court to countermand the TLC.
City sold to the public, 1,400 taxi medallions, between 2006 – 2014 generating to City's koffers about $ 850 million in revenues. At about $ 900,000, each, these medallions were sold packaged with an exclusivity right to HAIL expressly guaranteed by NYS as well as NYC laws for eighty years. It is this exclusivity right to HAIL that anchors the values of every medallion. THIS IS A PONZI SCHEME run by the City and it should be investigate by FBI.
I smell a Madoff here !
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Uber is also evading taxes.
To those who claim that "innovation" justifies everything, read history - TAXI APPS existed years before Uber.
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Taxi Service
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