NY Supreme Court suspends ‘e-hail’ system

Last week on this blog, we reported on the trend of companies taking cases to the courts in order to create legal obstacles for new market innovations that would cut into incumbent businesses' profits. One of the examples cited was in New York City, where Uber, along with other charter vehicle companies, is struggling to incorporate "e-hail" systems that would allow customers to use their smart phones to hire a limo or taxi. On Friday, though, the story took a surprising turn when a ruling against an e-hail system was filed not on one of the new startups, but on the New York City's Taxi and Limousine Commission.

In an effort to capitalize on new technologies, the city had approved a pilot program that would allow users to use location-based apps in order to hire a nearby cab rather than hailing one on the street. The move, though, brought immediate backlash – and, more importantly, a lawsuit – from private livery car companies in the city, which rely on pre-arranged car services. On Friday, Judge Carol Huff of the state Supreme Court ruled in favor of the livery companies, claiming that the e-hail program violated a law that prevents taxi caps from pre-planning rides.

"They're supposed to pick up the next street hail" instead of arranging fares in advance, lawyer Randy Mastro told Bloomberg News concerning taxis. "Only black cars with licensed dispatchers can do that."

As of now, the courts have only placed a retraining order on the city's pilot program, which will remain in limbo pending the lawsuit against the city. Arguments concerning the legality of the program will be made in court on March 18.

Whenever local companies are looking to use the latest technologies in their operations, it's important to seek the services of a Phoenix business law firm to ensure they're operating within all laws and regulations.

Categorised in: Business Law

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