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New York Taxi Commission Sued by Medallion Owners’ Group

Oct. 1 (Bloomberg) -- New York’s Taxi and Limousine Commission was sued by taxi-medallion owners over claims the agency is trying to reduce medallion values in retaliation for a challenge to a plan to allow car services to pick up street fares.

The Greater New York Taxi Association, a group representing the owners of about 1,500 medallions, filed the suit in state Supreme Court in Manhattan today, seeking a declaration that recent moves by the TLC and Commissioner David Yassky are “arbitrary and capricious” and asking to have them annulled.

“These illegal actions are all part of a concerted plan concocted by Mayor Michael Bloomberg and Yassky to severely and recklessly diminish the value of taxi medallions for no reason other than to retaliate against medallion owners who successfully challenged the mayor’s illegal plans,” the group said in its complaint.

The drivers accuse the commission of reaching a secret pact with the New York Taxi Workers’ Alliance, a group representing cab drivers, to support the plan to allow car services to pick up street fares in the city’s boroughs outside Manhattan in exchange for a fare increase, a lower percentage fee for credit card charges and a health and disability fund for the drivers.

A medallion is a license from the commission to operate a taxi in New York City, where 13,000 yellow cabs carry about 600,000 people in 450,000 trips every day, according to the commission. The average cost of an individual medallion rose to $717,000 in September from $713,000 a month earlier, according to the commission.

“The TLC’s 40-year history of thoughtful and prudent regulation makes GNYTA’s assertions ridiculous on their face,” Allan J. Fromberg, a commission spokesman, said in an e-mail. “At a time when medallion sales prices have yet again reached record highs, and the city itself is seeking to sell an additional 2,000 new medallions, their claim reaches a new level of absurdity. I have no doubt that the court will quickly recognize the inappropriate frivolity of this baseless accusation.”

Borough Plan

Governor Andrew Cuomo struck a deal with lawmakers in December for the city to permit car services to respond to passengers who hail them on the street outside Manhattan. The state legislature passed the law in February. Rules to implement the legislation were approved by the Taxi and Limousine Commission in April and were to take effect in June.

A state judge in June blocked the outer-borough plan, saying that three taxi groups had demonstrated it would cause them irreparable injury.

Bhairavi Desai, executive director of the New York Taxi Workers’ Alliance, which wasn’t named as a defendant in the lawsuit, didn’t immediately respond to a telephone message left at the group’s headquarters today seeking comment on the lawsuit.

The city is confident that the case has no merit and that it will eventually prevail in the suit, Kate O’Brien Ahlers, a spokeswoman for the city’s Law Department, said in an e-mail.

The mayor is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.

The case is Greater New York Taxi Association v. New York City Taxi and Limousine Commission, 103904/2012, New York State Supreme Court (Manhattan).

To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net

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

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