NEW YORK-The Big Apple won an appeal of its HAIL Act in the New York State Court of Appeals, turning back a challenge from credit unions that lend to taxi owners and the yellow taxicab industry.
The court upheld a new state law for creation of a street hail livery service in Brooklyn, Queens, the Bronx, Staten Island, and northern Manhattan, as well as for the city's sale of 2,000 additional medallions for wheelchair-accessible yellow taxicabs.
"For the first time in modern memory, the other four boroughs of NYC will have taxi service," said Mayor Michael Bloomberg during a press conference. "This is a huge win for riders and drivers alike."
Three separate lawsuits brought by the yellow taxicab industry, trade associations, and credit unions that lend money to finance taxi medallion purchases, claimed a 2012 law backed by Bloomberg allowing livery cabs to pick up street hails was unconstitutional, because the mayor bypassed the City Council and went straight to the state government. The Court of Appeals in Albany rejected these claims in a 22-page opinion released last month.
The credit unions challenging the law included Lomto FCU, Melrose CU, Montauk CU and Progressive CU, the four biggest lenders for taxi medallions in New York.
"The special interests have lost and the people of New York City have won," Bloomberg said.
What The Law Says
The state law allows the Taxi and Limousine Commission to issue 18,000 hail accessible outer borough taxicabs licenses over a three-year period. This year, 6,000 licenses will be available, and 20% must be wheelchair accessible. The licenses will cost $1,500 for a three-year license, which roughly equates to the same fee paid today for livery cabs.
The credit unions claimed that the so-called HAIL Act is invalid because, they alleged, it represents an illegitimate state takeover of many aspects of New York City's local property, affairs and government, which violates the New York State Constitution's Municipal Home Rule Law. They also claimed the state interfered with the City Council's long-standing regulation of the local taxi system.
The credit unions maintain the HAIL Act will devalue yellow taxi medallions and potentially trigger a credit crisis for the $5-billion medallion lending industry.
In a separate ruling, a state court on June 6 lifted an injunction that held up the city's efforts to launch a pilot e-hail program that would allow New Yorkers to hail cabs with their smartphones.
"Those industries who have tried to use the courts to stop progress have almost never succeeded," said Bloomberg.
