After London bans Uber, New York weighs limits to help yellow cabs

Bloomberg

A week after London moved to revoke Uber Technologies Inc.’s operating license, the company and its electronic ride-hailing competitors are feeling the heat in New York as city officials consider moves to regulate and control the industry. The City Council was considering a six-month study of Uber’s impact on the traditional yellow cab business, where the value of medallions—licenses to operate taxis—has dropped by 90 percent in the past four years. Medallion owners and some council members say the city shouldn’t have allowed companies like Uber and Lyft to operate in New York without applying the same regulations.
The taxi owners are pushing officials to rescue their industry. They are emboldened by London’s move to ban Uber’s 40,000 drivers amid company failures to do driver background checks. “If the competition continues to insist on playing by a different set of rules, then NYNew York should simply follow London and tell Uber to hit the road,” said Richard Lipsky, a spokesman for the Taxi Medallion Owners and Drivers Association.

Uber Campaign
The last attempt at regulating the mobile ride-hailing companies ended badly for Mayor Bill de Blasio, who failed to limit the vehicles’ increasing presence on Manhattan’s clogged streets. The mayor backed down after Uber ran a multi-million-dollar television and social-media ad campaign that accused him of taking jobs from cab-driving immigrants, whom the mayor has considered part of his political base.
Taxi license owners also count themselves as losers and victims of Uber’s rise. Medallion Financial Corp., a public company specialising in taxi-medallion financing, has seen its stock drop to $2.13 from a high of $17.74 in November 2013.
Last month, MGPE Inc., a hedge fund, bought 46 medallions out of foreclosure for about $200,000 each including fees, according to Medallion Financial President Andrew Murstein.
That’s down from an all-time high of about $1.3 million four years ago, Murstein said.
Yellow cab operators are subject to the city’s Taxi and Limousine Commission regulations governing driver qualifications and cab operations.
That includes prohibitions on phone use, which don’t apply to electronic-hail drivers. While yellow cabs are restricted to about 13,600 in New York City, there’s no limit on how many Uber and Lyft cars may cruise city streets.
Before the advent of the app-based ride-sharing industry, there were about 38,000 vehicles for hire on the streets. Now there are about 110,000 cars competing for riders, and city officials say they expect 35,000 more within a year.
The advent of medallions 80 years ago created order on what had been a “Wild West of vehicles and drivers,” Riccio said.