Legal Challenge for Taxi Hail Apps with NYC Yellow Cabs | Transportation Nation

by Bobby Mikul

Yellow cabs sued when the outer borough cab was proposed, and livery cabs are suing the city now that e-hailing testing is about to begin. Shenanigans as usual here in New York City.

If you don’t live in New York, why should any of this matter? The legal/economic conflict is emblematic of the promise and threat of tech at large. Really: the increasing friction between mobile technology and real-world regulation (and the structure of real-world markets) is nowhere quite as visible as it is in the for-hire-vehicle (taxis, limos and livery cars) industry.

In other industries, e-commerce only threatens to cut out an inefficient middleman, but with taxis (and their ilk) mobile tech has the potential to reshuffle the entire industry - not just the middlemen. Traditional distinctions between “medallion” cabs that can take street hails (and use an old-fashioned meter) and “livery cars” that can only take telephone orders and must quote standard (inelastic) prices in advance are going to be completely upended regardless of what the regulators choose and who files suit.

So the questions are two: (1) What are medallion owners and livery owners legally entitled to in a protected, highly-regulated market where, in NYC, a medallion is worth more than $1MM? And far more importantly, (2) what’s best for cities and the people who live there now that new technology has arrived?