New York City taxi drivers say they were put “financially underwater” by the City’s overinflation of taxi medallion prices and decades of corruption and negligence, a new lawsuit alleges.
A class action lawsuit led by two taxi drivers is demanding $2.5 billion from the City for allegedly artificially inflating the prices of the yellow cab medallions it sold to drivers at auction. The City is also accused of lying about its values, the New York Daily News reports.
The class action names New York City, the New York City Taxi, Limousine Commission, former-Mayor Michael Bloomberg, and several other officials as defendants.
Lawyers for the taxi drivers are expecting thousands of cabbies to join the class action lawsuit.
According to the lawsuit, the City had a years-long scheme that saw it net $855 million from medallions between 2004 and 2014. At the same time, the City allowed unlimited numbers of Uber and Lyft vehicles to operate, taking away business from yellow cabs and tanking medallion prices, the lawsuit alleges.
The lawyer representing the drivers, Jon Norinsberg, told the New York Daily News that the City ran a large-scale fraudulent scheme to artificially inflate medallion values and drive up the prices.
“It’d be one thing if the medallion prices rose through natural market conditions. But between 2004 and 2014 they skyrocketed as a result of fraudulent manipulation by the TLC and the city of New York.”
The New York City Taxi and Limousine Commission (TLC) is an NYC government agency that licenses and regulates the medallion taxis and for-hire vehicle industries. The medallion program was launched in 1937 to regulate the increasing number of taxis on city streets. The program only allowed drivers who owned a medallion to drive a taxi, and the number of medallions available was capped at 11,787 for decades.
In the late 90s, under Mayors Rudy Giuliani and Michael Bloomberg, the number of medallions was increased to 13,500, and selling prices often exceeded $1 million.
However, the value quickly dropped to below $150,000 as Uber and Lyft came on the scene—companies which do not require drivers to have medallions—the New York Daily News reports.
Despite staffers’ warnings that prices of medallions would significantly impact yellow cab drivers, the agency continued to inflate medallion prices, the lawsuit alleges, also claiming that some TLC officials planned to flood the streets with unlimited Uber and Lyft vehicles.
Federal racketeering law means the medallion owners are owed three times the $855 million in revenue the City earned through medallions between 2004 to 2014, Norinsberg told the New York Daily News.
The lawsuit follows a year-long investigation by New York State Attorney General Letitia James, who chose not to file a lawsuit against the City earlier this year despite finding that officials had ignored clear signs that the once-thriving industry was on the verge of collapse, the New York Daily News reports.
A representative for Attorney General James said that Jamesbacked off the $810 million because she believed a lawsuit could last years without a guaranteed victory. She thought that a bailout for beleaguered medallion owners was the best remedy, according to the New York Daily News.
The attorney leading the case on behalf of drivers told the New York Daily News that his team planned to “finish the job” which Attorney General James started.
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One thought on NYC Taxi Drivers Demand $2.5B from City in New Lawsuit Against Overinflated Medallion Prices
RIDICULOUS!!! FEES I HAD TO PAY WHEN I WAS IN NEW YORK!!
THEY OWE ME $$$ HUNDRED OF DOLLARS!!! OVERCHARGED ME!!!!