Uber vs Yellow Cabs: Let The Battle Begin

The fight between Uber and yellow cab drivers finally came to a head after a few medallion owners filed a lawsuit last month in New York.

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Sukhdev Singh has been driving a yellow cab for five years now. An immigrant from India, Singh moved to New Jersey when he was 12-years-old. He now owns a cab and a medallion which he bought along with his brother for $950,000 about one year ago.

Singh’s livelihood, however, has become precarious with the emergence of Uber.  The number of black cars or Uber cabs has increased multifold over the past two years and now outnumber the yellow taxis. The yellow colored cabs that have become as synonymous with New York as the Empire State Building are competing aggressively for fares.

“Uber is really killing the business right now,” said the 26-year-old Singh, sitting in his cab in front of Grand Central.

Following the angst that has been building up for a while now, a lawsuit was filed last month charging that the Uber cabs are violating New York State and City laws. “We represent a few medallion owners, taxi drivers and leasing agents,” said Eric Hecker, the attorney who filed the lawsuit.

The petition challenges that the e-Hail system used by non-medallion black cars especially Uber is “arbitrary, discriminatory, and otherwise unlawful”. An e-hail is equivalent to a conventional street hail, according to The Taxi and Limousine Commission. Yet the drivers of yellow cabs pay hundreds of thousands of dollars to buy the medallions to have that right. Uber drivers can drive without one. Currently a medallion in New York City costs around $800,000. The price has dropped sharply in the last year.

According to the petition, “yellow taxi drivers must purchase or lease medallions and they may not charge more than regulated meter rates. Black car drivers are not required to follow these obligations.”

Yellow cab drivers like Singh are fine with companies that provide long haul fares or airport drops since they are prearranged pick-ups. That system has been in place for decades with livery and limousine services. Uber, however, has changed the game with e-hails, smaller investment costs and lower meter rates.

Voicing the same problems that are listed in the 41-page petition, Singh said that Uber’s e-hail system is pulling away his daily income. Earlier, he said he was earning around $60,000 a year and now it has dropped to $40,000 – $45,000.

According to the Taxi and Limousine Commission, as of April 2, there are 14,587 vehicles affiliated to Uber’s bases. For now, the TLC does not appear to be taking sides.  A spokesman would not comment on the lawsuit specifically, only on the industry in general. “The TLC does always endeavor to create a level playing field for the various industries we regulate. We provide a foundation upon which business can flourish, and offer the riding public safe and reliable service that is there when they need it,” said Greg Gordon, TLC’s public affairs officer.

Mohammed Ghani, another yellow taxi driver stood outside Grand Central Station for passengers on Thursday morning shared his view that Manhattan should be left to the yellow cabs.. “They are putting the black cars parallel to the medallion cabs,” Ghani said. Singh and Ghani argue that Uber can work the airport drops and the other four boroughs like the green cabs. “The permit costs a million dollars. Nobody is listening to us here. It is just a money game for the city,” said 55-year-old Ghani, who estimates that he is losing as much as $100 a day because of Uber.

This is the first lawsuit that has been brought forth by frustrated medallion owners in New York and brings a battle to head that has been brewing for a while. More may be coming down the road.

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