The Class Action Lawsuit
New York City was charged with a class action lawsuit by taxi drivers alleging that medallions were overpriced.
Two taxi drivers filed the class action lawsuit in April 2021 in a New York federal court.
The lead plaintiffs attest the city has corrupted the price of the yellow taxi medallion, causing the value to increase very rapidly over the years.
The class action lawsuit aims to demand a payment of $2.5 billion from New York City due to damages incurred by taxi drivers.
It seeks to represent medallion owners who were affected by the city’s tremendous price increase.
New York Medallion Program
The city created the taxi medallion program in 1937. It was made to control the number of taxis in the city. It permitted yellow cab drivers to operate in New York.
For decades, the number of medallions given to yellow taxis is 11,787. However, the value was changed in 1996 when former Mayor Rudy Guiliani sold new medallions for auction. Taxi drivers paid for the price of the medallions because they believed it was a good investment.
During the reign of former Mayor Mike Bloomberg, the number of medallions allowed to operate in the city was 13,500.
New York Medallion Price
The lead plaintiffs claim that New York City has earned more than $855 million from selling yellow taxi medallions from 2004 to 2014.
In 2013, the selling price of the yellow taxi medallion had reached more than $1 million. However, the medallion value has decreased to $150,000 since the competition grew in the city.
They argue that the city had allowed taxi driving competitions to come in when the medallion’s price was increased.
The competition includes ride-hailing services such as Lyft and Uber. These competitions are not required to purchase the medallion to operate in New York.
The high medallion price and the added competition have allegedly caused taxi drivers to lose tremendous income. They contend that the city did not help them with their problem.
The class action lawsuit insists that the rise in the price of the medallion was not normal. It adds that it was hiked above natural market conditions.
The lead plaintiffs believe that TLC and New York City have conspired to manipulate the price of the yellow taxi medallion fraudulently.
They state that the city has known that medallion price would crash since they were notified by Gary Roth, a TLC staffer, in 2011. Despite this, TLC and the city allegedly continued increasing the medallion’s price.
The class action lawsuit declares that in September 2012, Matt Daus and David Yaasky, both former TLC officials, conspired to permit ride-hailing service to operate in the city.
It also states that New York City officials have knowingly misled taxi drivers into thinking that medallions are a good investment.
The lead plaintiffs believe that the issue is covered by federal racketeering law, which means that they can ask for three times the city’s profit from selling medallions from 2004 to 2014.
Editor’s Note on New York City Medallion Class Action Lawsuit:
This article is published to inform you of a class action lawsuit filed against New York City due to hiked medallion prices.
Case Name & No.: New York City Medallion Class Action Lawsuit
Products/Services: Yellow taxi medallion
Allegations: New York City and TLC conspired to increase the yellow taxi medallion’s price
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