Taxi Owners Sue NYC Over Uber, While Court Overrules Class-Action Appeal (thestack.com)

An anonymous reader writes: Taxi owners in New York have filed a lawsuit against cab-hailing app giant Uber, citing damaged revenues and a hefty fall in value of NYC's 'medallion' business. The case against the city and its Taxi and Limousine Commission claims that the regulators have unfairly permitted Uber to steal away business from the regulated cab industry. Getting away without regulation has enabled Uber drivers to compete directly, and drown out official taxi companies. A further lawsuit case hovering over Uber this week, is its request to immediately appeal an order approving class certification filed by its own drivers. The appeal was denied by a U.S. court yesterday.

Comments

Re:NYC taxi system could DESTROY uber

[ottothecow]

Plenty of cab companies and taxi associations have tried to create "official" taxi apps.

They are all god awful. People use uber partly because it is cheaper (is it even cheaper in NYC? I thought it cost more than a yellow cab there)...but they also use it because it is seamless, the cars are clean, and the drivers aren't smelly dudes yammering away on their phone. See the use of the more expensive "Uber Select" and "Uber Black" as proof that it is not just about undercutting the taxis.

Most NYC rides aren't dispatched anyways...they are flagged down on the street.

Re:NYC taxi system could DESTROY uber

[Firethorn]

The main difference in the business models is that Taxi companies have to pay hundreds of thousands of dollars for a taxi license/plate/medallion, the supply of which has been artificially restricted by government regulation. This forces costs up for them and prices up for customers.

Given that this is specifically about NYC, which I've done a bit of study on, it's actually worse than you say. NYC taxis are some of the most highly controlled in the world. London's Black Taxis are up there too, but at least they require quality drivers. NYC, from my understanding, is much more concerned with the vehicle, medallion, and operating methods.

Peak price for the medallion was over $1M, and the loan using one as collateral ran roughly 10%. So the 'permit' to operate a taxi in NYC ran, as an opportunity cost, roughly $100k/year. Before the costs of the car, insurance, fuel, and driver. If you figure on 3 rides an hour, 24 hours day, 365 days a year(they hand off the permit to successive drivers in the company), that's 26k rides. Or the permit being $4 for every ride.

2014 factbook: 13,437 medallions, 485k per day. That's 36 rides per medallion(I was figuring 72, double theirs), which increases that to $8/ride. Though I think the value of medallions have dropped from their high, and interest rates are lower. $740k@7% is only $142 per day, or still around $4/ride. ;)

Re:It's a tax

[Dynedain]

The city is not getting $1m for each medallion. That's the artificial market created by middlemen trading in medallions.