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NYC Livery Car Groups Lose Smartphone-Hail Program Bid

April 24 (Bloomberg) -- New York livery car groups lost their lawsuit seeking to stop a pilot program that would enable people to hail and pay for a ride in one of the city’s 13,000 yellow taxis using location-based smartphone applications.

The measure adopted by the New York City Taxi & Limousine Commission in December would run for 12 months and exempt areas such as airports that have provisions for taxi lines. While all licensed city cab drivers would be eligible, their participation would be optional.

The Livery Roundtable, Black Car Assistance Corp. and several car-service firms sued the TLC in February, claiming the program violates city codes and may let drivers discriminate against racial minorities based on their names or locations, as well as the elderly, who are less likely to own smartphones.

“At least on its face, the program appears better aimed at avoiding discriminatory passenger selection,” Manhattan state court Justice Carol Huff said in a ruling yesterday that lifted her March 7 order blocking the program and dismissed the case.

“The driver must accept an e-hail without knowing the passenger’s identity or destination,” Huff said, adding later, “there is no clear evidence that the program will have a potential disparate impact on the elderly.”

Taxi Competition

Radio-dispatched livery cars compete with the city’s medallioned taxis for fares, although they can’t be hailed on the street. Lawyers for the city and state, joined by attorneys for a group of livery organizations, are scheduled today to ask the state’s highest court to overturn an August ruling by a lower court that blocked a plan to allow street hailing of livery vehicles outside the borough of Manhattan.

“The decision is so fundamentally wrong in so many respects that we are contemplating an appeal,” Randy Mastro, an attorney for the livery cab companies with Gibson Dunn & Crutcher LLP, said in an e-mail.

“We are very pleased,” New York City Corporation Counsel Michael A. Cardozo said in an e-mailed statement. “The ruling confirms our position that the pilot was completely proper. The TLC must be able to pilot new technology like e-hail apps to stay on the cutting edge of industry and to best serve the public.”

South of Manhattan’s 59th Street, the program would be restricted to pick-ups within a half-mile range, according to yesterday’s decision. Elsewhere in the city, the range would extend to 1 1/2 miles.

Smartphone application providers would be subject to New York City Taxi and Limousine Commission approval, Huff said.

“The market will ultimately decide which apps rise or fall and we have an obligation to give the riding public that choice,” TLC Commissioner David Yassky said in by e-mail.

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 reporters on this story: Andrew Harris in the Chicago federal courthouse at

aharris16@bloomberg.net; Chris Dolmetsch in New York State Supreme Court in Manhattan at

cdolmetsch@bloomberg.net

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

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