New York Attorney General Letitia James has threatened to file a lawsuit against New York City for allegedly inflating the value of yellow taxi medallions.
The medallions are permits that are required for owning a yellow cab. James alleges that the city’s Taxi and Limousine Commission operated a scheme from 2004 to 2017 that artificially inflated prices of the medallions, which are auctioned off.
The cost of the medallions increased from $283,300 in 2004 to $965,000 in 2014. James claims that Taxi and Limousine Commission, “-knew that the price of a medallion had exceeded its underlying value” by at least 2011, “but failed to disclose that information to purchasers.”
“These taxi medallions were marketed as a pathway to the American dream, but instead became a trapdoor of despair for medallion owners harmed by the T.L.C.’s unlawful practices,” James said. She went on to add that, “The very government that was supposed to ensure fair practices in the marketplace engaged in a scheme that defrauded hundreds of medallion owners, leaving many with no choice but to work day and night to pay off their overpriced medallions.” James is demanding for the city to compensate taxi medallion owners within a month, or else she is claiming she will sue the commission for fraud.
Bhairavi Desai, the executive director of the New York Taxi Workers Alliance representing cab drivers, said James’s call to action is welcomed as validation of the city’s liability in the taxi crisis. She said the medallion price inflation was a betrayal by the city.
“Not only did they close their eyes to predatory practices and directly engage in inflating the prices, but they then allowed in Uber and Lyft completely unregulated,” Desai said.
Officials have made an effort to provide financial help to taxi drivers, and for increases in the oversight of Uber and other ride-hailing companies. Desai, however, said the city’s response has been too slow and not sufficient.
“There has been no substantial financial relief — this restitution would be the first,” she said.
Freddi Goldstein, a spokeswoman for New York City Mayor Bill de Blasio, said the mayor has been trying to repair the city’s taxi crisis since he entered office in 2014.
“This crisis has been ours to solve — working tirelessly to clean up the carelessness and greed of others,” Goldstein said. “If the attorney general wants to launch a frivolous investigation into the very administration that has done nothing but work to improve the situation, this is what she’ll find.”