New York's Unlicensed Cabbies, and Their Passengers, Get a Long Overdue Break

As the city's assault on gypsy cabs gets a slap, and restrictions are eased, maybe it's time for officials to just get out of the way.

Well before Uber and Lyft, there were gypsy cabs. Whether personal cars, car service vehicles, or out-of-town cabs, they aren't licensed for street pick-up. But they often defy New York City's restrictive laws to fill the gap between demand for transportation and the wildly inadequate supply of city-issued medallions permitting cabbies to respond to street hails. Not too long ago, that tightly controlled supply drove the price of the aluminum plates to over a million dollars each. With an artificial shortage of medallions for yellow cabs, ambitious cabbies lacking official credentials have long transported New Yorkers and visitors alike around the city's neighborhoods and major destinations.

Faced with overwhelming scofflawry inspired by their own stupid collaboration with established cab companies to impose a ridiculous taxi shortage on the city, officials have escalated their war on gypsies to the point where they've been flat-out stealing cars from drivers—even lying to do so—from people who haven't enjoyed due process or, sometimes, violated the rules at all. On September 30, federal judge Valerie Caproni finally ruled that the city has gone too far and handed a measure of relief to unlicensed cabbies, the passengers who rely on them, and to anybody who drives a car in the city and risked being scooped up in the dragnet.

Despite the scare stories—often spread by medallion owners and city officials—gypsy drivers face more danger from their passengers than their passengers do from them. When I was younger and lived in Manhattan, my friends and I hailed gypsies at least as often as we hailed yellow cabs, even though my grandfather and great-uncle owned a cab and medallion and made their living that way for decades. Not only were the gypsies actually available in some out-of-the-way neighborhoods, but an agreed-upon flat fare was often a pleasant alternative to a ticking meter when the evening had depleted cash reserves.

The situation hasn't improved in the (many) intervening years. In 2011, the head of New York City's Taxi and Limousine Commission conceded as much, writing, "You've probably heard the statistics many times already: 97 percent of yellow taxi trips originate in Manhattan and the airports, even though 80% of the City's residents live in Brooklyn, Queens, the Bronx and Staten Island."

The legally strangled supply of taxis licensed for street hails has logically focused its efforts where money and demand are concentrated.

Lots of other places in the United States and around the world also choke off the supply of licensed taxis, favoring established players while inconveniencing the public and barring would-be competitors from the aboveground market. This has created an opening for high-profile innovators like Uber and Lyft, which allow passengers and part-time drivers to meet through phone apps. But old-fashioned black market operators have been there the entire time. In New York, rather than welcome this flow of supply to satisfy demand, city officials escalated their efforts against drivers who haven't been able to win their way to legal status.

In her ruling against New York City, Judge Caproni outlined the city's increasingly draconian efforts. The city began with summonses and fines to unlicensed cabs, but these "resulted in unsatisfied default judgments" and were insufficient to deter drivers. In 1990, the city started seizing cabs without warrant or due process, holding them until car owners pleaded guilty or paid a stiff fine. That still didn't deter drivers. So the city raised penalties "and reduced the number of violations within a 36-month period that could trigger vehicle forfeiture from three to two."

The Taxi and Limousine Commission became so enthusiastic about punishing unlicensed cabbies by seizing their cars and either holding them for ransom or selling them that it got sloppy about making sure that any of its stringent rules had actually been violated. In 2014, news site DNAInfo.com researched the matter and found that "hundreds of people going about their daily routines had their cars seized because TLC inspectors suspected they were unlicensed cabbies." Many were people transporting spouses, children, and friends.

TLC inspectors admitted that they were under pressure to simply grab cars, because the official carjackings were big money-makers for the city. Inspectors took vehicles with minimal or no evidence, and even tailored their testimony to fit the desired outcome. It was easy to do, since the vehicles could be taken on a whim.

In Harrell v. The City of New York, five drivers who had their cars seized sued based on the Fourth and Fourteenth Amendments to the United States Constitution and similar provisions in the New York State Constitution.

Pointing out that "'Probable cause' is not a talismanic phrase that can be waved like a wand to justify the seizure of any property without a warrant," Caproni slapped down all of New York City officials' arguments that nabbing people's cars and turning the owners out on the street is just dandy so long as they eventually get a chance to prove their innocence. The due process, she notes, is supposed to come before the government takes your stuff. Otherwise, officials might grab stuff in error (or, perish the thought, even lie to pad government bank accounts).

The policy does in fact violate the Fourth and Fourteenth Amendments, Caproni ruled. She scheduled further proceedings on injunctive relief.

Through this all, by the way, gypsy cabs still weren't deterred from cruising the streets and picking up fares.

New York City's government knows that it has a big mismatch between the number of taxis it legally allows on the streets and the demand for transportation. When conceding that licensed yellow cabs focus on Manhattan to the detriment of the other boroughs, the head of the TLC also admitted that "some of this demand is currently met by illegal livery pickups."

The city has even come up with a halfway reasonable response, in the form of green cabs licensed to pick up fares in northern Manhattan, the Bronx, Queens, Brooklyn, Staten Island, and at the airports. Allowing more competitors into an industry is a hell of a lot healthier approach than punishing would-be entrants and ignoring the pent-up demand that draws them.

But it took decades to get that far, and gypsies still lined up for fares even when the city adopted arbitrary, unconstitutional, and criminal tactics to drive them away.

Here's a thought: Maybe transportation needs would be satisfied much more quickly, and official capriciousness dramatically reduced, if the government just stepped out of the way and let supply meet demand.