Overview
Last week, Judge Nathan dismissed a challenge by a group of yellow taxi medallion owners to New York City's regulatory treatment of Uber and similar ride-hailing services. The plaintiffs alleged that the decision to exempt Uber and its drivers from the requirements imposed on yellow cabs constituted a regulatory taking under the Fifth Amendment and violated the Fourteenth Amendment's Equal Protection Clause (see our previous coverage here). Judge Nathan rejected the takings claim as untimely, noting that New York State provided a mechanism for seeking just compensation for a taking, but plaintiffs had not attempted to avail themselves of it.
In response to the plaintiffs' equal protection claim, Judge Nathan reasoned that the city was justified in separate regulatory regimes for yellow cabs and Uber:
The City's for-hire ground transportation industry - like its analogues in other parts of the country and the world - may well, as Plaintiffs allege, be rapidly evolving. And a notable feature of that evolution may indeed be that the Ubers and Lyfts of the world increasingly share important characteristics with traditional medallion taxicabs, including, as identified by Plaintiffs, the customers they serve, the drivers they employ, the manner in which they transact sales, and even the immediacy with which their services are delivered. But marshaling such similarities risks obscuring persistent (and undisputed) differences in the manner in which these industry participants interact with and relate to their consumers. One set responds, by virtue of a government-created monopoly, to spontaneous street hails by people with whom they have no preexisting contractual relationship and the pickup takes place with no information (for example, names, vehicle type) having yet been formally exchanged. The other responds, pursuant to a preexisting company-customer contract, to remotely transmitted electronic hails and the pick-up takes place following at least a minimal exchange of information. Such differences, easily "justify" Defendants' decision to subject these participants to "differential" regulatory treatment on the basis of legitimate government policy to serve the sorts of interests discussed above. Under the deferential standards of rational basis review, nothing more is required for the challenged regulations to survive.