Taxi Company Owner Sees His Industry Falling to Uber

Jul 26, 2017
Photo by: Pat Johnson Murray Rosenberg, a 30-year resident of Tuckerton, owns Yellow Cab in Atlantic City.

Tuckerton resident Murray Rosenberg, president and owner of Yellow Cab in Atlantic City, is a defendant in a class action lawsuit that Uber and Lyft rideshare drivers have brought against the taxi industry in Atlantic City, claiming taxi drivers have unlawfully poached their fares by signing up as drivers and getting locations of their customers.

But Rosenberg said it is the taxi industry that should be suing the ride-sharing companies because they have an unfair operating advantage over taxi drivers, who must pay a mercantile licensing fee (and receive a medallion) to the city and are required to maintain $35,000 worth of liability insurance. Taxi drivers also have FBI fingerprint background checks while Uber, in particular, does not require its drivers to have these checks, a safety factor that worries Rosenberg. They also drive their own cars and do not need to have liability insurance, the Tuckerton resident said on Saturday.

Rosenberg is running a business his father, a Latvian immigrant, built from a single taxi cab whose ownership he shared with two other men in 1950, into a thriving business that owned 101 cars and medallions.

After graduating from the University of Richmond and serving his country in Vietnam, Rosenberg took over the company in 1974. The Yellow Cab business, originally City Service Cab Inc., has been running continuously in Atlantic City since the 1950s.

Rosenberg said there are currently 250 licenses operating in Atlantic City and his company, Yellow Cab, still has 100 medallions, although 25 of them are now sitting on Rosenberg’s desk. “I can’t get anyone to buy them; they’re not worth anything now.”

That’s since the ride sharing companies started plying the streets of AC.

“Why would you pay $100,000 for the right to operate if someone else is getting it for nothing?” he asked. “You wouldn’t.”

A medallion is akin to a liquor license in that it is required by city ordinance, is limited by local government and is worth money – or at least it used to be.

“Medallions were established at the turn of last century,” said Rosenberg. “Local governments established an ongoing amount of public for-hire services in our cities and municipalities that required public transportation – beach resorts like AC –  to ensure that the public had a number of vehicles operating in that arena, and over the years it has grown to 250 medallions.

“Pre-gambling they cost $4,000 and $5,000, and post-gambling, the prices rose year by year. Many people mortgaged their homes and purchased licenses. We also purchased licenses for as much as $75,000.”

Yellow Cab also manages the medallions of widows or relatives who have inherited the medallion. “When the original owners are deceased, we try to help them so your business didn’t die with your husband and it retained a value.”

That safety net is now gone for beneficiaries since medallions have lost their value.

But Rosenberg is considering countersuing the ride-share companies, and he has a track record in the courts.

“Several years ago, Atlantic City arbitrarily decided they would issue 25 more taxi medallions and give them to retired police officers, and I took issue with that. I hired the firm of Cooper Levenson, and we successfully sued the city by proving the licenses were personal property and therefore couldn’t be arbitrarily issued without showing a clear-cut need and without affecting the current value of the medallions. The city conceded they were property, and the judge held they couldn’t do that; they would have to go on the market for the market price, and there had to be a legitimate reason for issuing more. When the city had a population of 65,000, we had 250 licenses medallions. The city’s population had dropped to about 30,000 at that time, and they wanted to issue 25 more and give them away for free. It didn’t make any sense. It would have made our medallions worthless if they were giving them away for free.”

In February, Gov. Christie signed legislation that legitimized ride-share companies in the state. Before that, drivers could be ticketed for operating a business without a mercantile license.

Rosenberg fought the legislation in particular on the issue of safety; there are news reports of instances when ride-share drivers have sexually harassed women and cases of alleged rape by drivers, one in Florida in May and two in one week in Queensland, Australia, this July.

Rosenberg said he called the governor’s office and his legislators before the vote and had not been given a reply. “I have complained to everyone under the sun, and I have been totally ignored except for one individual, and that is Director of Licensing and Inspection Dale Finch in Atlantic City.”

On Tuesday, Finch said the legislation that went into effect May 1 and covers the entire state “unregulated Uber. They are not required to do any of the things taxis and livery services are required to do. Prior to that, we could find them in violation of city laws for not having a commercial license.”

“The motor vehicle commission is supposed to come up with some regulations but hasn’t yet. I talked to them some time ago, and they said it would take them months. It’s really affecting the taxi and limousine and jitney business tremendously,” said Finch.

Uber or Lyft is required to pay a yearly $25,000 licensing fee to the state, while taxis and liveries must buy a medallion and pay an annual $150 fee to the city. “We have 250 medallions in the city, and they are like real property. At one time you could even borrow against them, but that was years ago,” said Finch.

“The only thing that will change the situation now would be for the Legislature to revise the legislation,” he said.

Rosenberg takes great pride in his family-run business. He also was on the board of the International Taxicab, Limousine and Paratransit Association and was president for a few years. “That organization is celebrating its hundredth year, too,” said Rosenberg, who said Yellow Cab is celebrating its centennial. In 2007, his Yellow Cab business was recognized as operator of the year by the ITLPA based on its safety record and clean, well-maintained cars.

He acknowledged that the convenience of using an iPhone app to call a driver is easier than looking up the taxi number and calling a dispatcher.

“I’m in the process of putting an app in place,” he said on Saturday. “I’m not against technology, but I am if you use it to make a monopoly and it’s designed to set you apart from everyone else and there are no rules. I don’t think technology should allow you to do whatever you want as a business enterprise.

“Why should I be required to do that and be monitored by every agency in the state and these guys just put their personal car on the street? I just want a level playing field. I care about the riding public.”

— Pat Johnson

patjohnson@thesandpaper.net

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