Cabbie Class Actions Spark City Probe

MANHATTAN (CN) - New York City's Taxi and Limousine Commission said it will investigate allegations in four class actions accusing taxi medallion owners of gouging drivers on their weekly leases.

Four cab drivers on Monday sued their medallion owners for allegedly charging them far more than the city's legal caps of $800 per week for gas guzzlers and $842 for hybrids.

Drivers Diego De La Rosa, Henry Desmangles, Khalid Pervaiz and Haroon Rashid say their bosses at All Taxi Management, Woodside Management, Queens Medallion Leasing, and B. Taxi Management, respectively, charged them from $900 to more than $1,000 for their medallions.

The companies also charged drivers 5 percent "pass-along" charges every time passengers paid with credit cards, even though processing fees were only 2 to 3 percent, according to the complaints.

Days after the cabbies sought millions in class damages, Taxi and Limousine Commission spokesman Allan J. Fromberg said that the city will investigate.

"The lease cap rules are intended to make sure that taxi drivers can earn a decent wage for the long hours they work, and the TLC takes violations of these rules very seriously," Fromberg said in a statement. "We investigate any reports of violations that we receive and prosecute as the facts dictate, and we will investigate these allegations accordingly."

When he filed the complaint, the drivers' attorney Dan Ackman criticized the TLC for its delay: "Price gouging of drivers is pervasive in the taxi industry," Ackman wrote. "The great irony is that 18 months ago, the TLC announced a massive investigation and prosecution of drivers for allegedly overcharging a few bucks at a time. But this kind of gouging where cabdrivers are the victims is routine and ongoing, and is many times greater in dollar terms."

The drivers seek punitive damages for the class, for violations of TLC rules and general business law.

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