NYC Judge Delivers Massive Victory to Uber

By Published on September 12, 2015

Uber and other ride-sharing platforms have been handed a major victory after Queens Supreme Court Justice Allan Weiss threw out a legal challenge to ride-sharing companies’ freedom to be hailed from apps.

Four credit unions with significant financial interests in yellow cab medallions argued that app-based services such as Uber are more akin to street private-hire vehicles, that can only pick up pre-booked passengers, but the app enables them to act like a street hail service.

However, Weiss rejected the arguments, saying that Uber was not breaking any regulations or infringing on the yellow cabs exclusive right to pick up street hails. The judge delivered a strongly worded response explaining some basic economics to the plaintiffs.

“Any expectation that the medallion would function as a shield against the rapid technological advances of the modern world would not have been reasonable,” Weiss wrote. “In this day and age, even with public utilities, investors must always be wary of new forms of competition arising from technological developments.”

Todd Higgins, representing the credit unions, was equally strong in his response saying, “a catastrophe is unfolding, as an entire industry continues to be illegally destroyed, while elected officials allow it to happen on their watch,” reports Crain’s.

Higgins appeared to be referring to NYC Mayor Bill de Blasio, who recently backed down from a controversial crackdown on Uber’s growth, when he said “It is a stunning abdication of leadership and responsibility that will haunt New York City for years to come.”

The credit unions could be facing huge financial challenges after loaning money to taxi drivers for medallions. With the value of medallions rapidly declining and more pickups going to ride-sharing service such as Uber and Lyft, the credit unions could face a sharp rise in delinquency rates.

The four credit unions hold stake in more than 5,000 medallions, the value of which has dropped by 30 percent to $700,000 since 2013, reports The New York Daily News.

Weiss held that it was not his role to interfere in this aspect of market disruption and innovation. “It is not the court’s function to adjust the competing political and economic interests disturbed by the introduction of Uber-type apps,” Weiss said.

The plaintiffs consisted of Melrose Credit Union, Montauk Credit Union, Progressive Credit Union and LOMTO Federal Credit Union.


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