Miami-Dade County

Taxis suing Miami-Dade for $1 billion over new Uber law

Taxis wait in a holding area at Miami International Airport, Tuesday, Aug. 25, 2015.
Taxis wait in a holding area at Miami International Airport, Tuesday, Aug. 25, 2015. AP

A day after Uber triumphed in the battle to legalize its ride-hailing service in Miami-Dade, taxi operators said the new ordinance will end up costing them $1 billion as the cab industry withers in the face of an already dominant competitor.

Brandishing a lawsuit against Miami-Dade over the pro-Uber bill passed the night before, a taxi-company lawyer on Wednesday acknowledged sub-par service from many cabs but said the county is unfairly giving an advantage to deep-pocketed and tech-heavy newcomers.

“Give us equal protections under the law,” said Ralph Patino, a Coral Gables attorney who is pursuing a class-action suit against the county on behalf of the taxi industry. He said while taxis must wait in a holding lot for hours for a chance at Miami International Airport’s lucrative taxi stand, Uber drivers have been zipping in to meet passengers curbside for the last two years.

The reason “our vehicle may smell a little bit more than that of Uber at the airport, for instance,” Patino told an afternoon press conference, “is because our drivers have to sit in their cars for three hours awaiting a fare.”

His comments captured the primary divide in the debate over Uber and its smaller competitor, Lyft, in their largest Florida market and one of the biggest for both companies nationwide. The San-Francisco-based investor darlings, with combined values approaching $70 billion, rely on thousands of freelance drivers using their own vehicle and mostly picking up extra income for a few hours each week. The new law lets ride-hailing companies charge what they want, while taxis use full-time drivers who are limited to county-regulated fares in vehicles often driven day and night through multiple shifts.

As they have across the country, Uber and Lyft won support in Miami-Dade by launching their services in defiance of local laws and promising drivers to cover fines that now approach $4 million. After two years, Uber says it now has more than 10,000 drivers in Miami-Dade, far more than the roughly 2,200 taxis authorized to operate under the county’s capped system of cab medallions.

Mayor Carlos Gimenez and other elected leaders cheered Uber and Lyft as totems of the modern, tech-savvy image that Miami wants to project, and castigated the taxi industry for trying to preserve a monopoly rather than improving service for customers.

Miami-Dade Mayor Carlos Gimenez talks with the Miami Herald editorial board about the Budget, Transportation and legalization of Uber

“I heard horror stories about our taxi-cab industry,” Gimenez said after the County Commission voted to legalize Uber and Lyft on Tuesday night. “And I believe if the taxi cabs had not been so stuck in the past and really looked toward the future, they would be in much better shape than they are today.”

But the local taxi industry maintained it had served Miami’s tourism industry well for decades, including the dark days after Hurricane Andrew in 1992 and the 2001 terrorist attacks, only to be cast aside by county leaders eager to cater to the flashy newcomers.

“I drove for 25 years,” said Robert Rios, 44, who said he’s still making loan payments on four taxi medallions from Miami-Dade. “That was supposed to be my retirement.”

The Homestead resident is a partner in the company behind Miami’s Super Yellow Cab, which controls about 40 taxis in the county. The company, Miadeco Corp., is listed as the lead plaintiff in the suit Patino filed earlier this year against Miami-Dade as commissioners advanced the pro-Uber legislation through the committee process.

A just-amended complaint in Miami-Dade Circuit Court cited the newly passed ordinance and asks a judge to block the county from enforcing it. The law doesn’t take effect for 10 days, and county administrators are still working on some technical aspects of implementing it, including how Uber and Lyft would operate at MIA.

Patino said Wednesday he would not press for an injunction against the ordinance, but would instead focus on winning a class-action judgment for owners of the 2,121 county-issued medallions. He said he would request $1 billion in damages.

The lawsuit rests on an argument Uber and Lyft have faced nationwide as their app-based ride service has upended taxi industries in major cities coast to coast. Taxi industries last fall lost a key court ruling in New York, and Miami-Dade officials say they’re confident the county has no obligation to protect the value of medallions against changes to the local car-for-hire industry.

The capped medallion system prevented new operators from eating into existing cab companies’ market share, and the licenses soared in value during the last five years even as Uber was making a splash elsewhere. County statistics show the average medallion sold for $152,000 on the resale market in Miami-Dade during 2011, when Uber launched in New York, and then hit $293,000 in 2014, the year Uber came to Miami-Dade.

But by 2015, as Uber’s Miami-Dade fleet surpassed taxis themselves, the price plunged to $152,000.

Taxi leaders say Miami-Dade bears responsibility for the seesaw because the cash-strapped county in 2012 raised about $2 million by auctioning off just six medallions — setting off a frenzy that had one license go for $430,000. County law treats the medallions as property, and the suit seeks to hold Miami-Dade liable for lost value brought on by catering to Uber with unfair legislation.

“This is not the Soviet Union,” Patino said. “You cannot take away a property right without paying market value.”

Lynda Butler, director of the William and Mary Property Rights Project at the William & Mary Law School in Williamsburg, Virginia, said those types of claims are uphill fights when an asset is still worth something.

“It’s very hard to win as long as they retain value,” Butler said. “It’s hard to win unless it’s a total wipeout.”

Miami-Dade Mayor Carlos Gimenez talks with the Miami Herald editorial board about the Budget, Transportation and legalization of Uber

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