Taxi!

MANHATTAN (CN) - New York City can extend taxi service to the city's outerboroughs, the state's highest court ruled, overturning a decision that found the plan unconstitutional.

The Thursday ruling means the city can dole out up to 18,000 "hail licenses" in the next three years so drivers can pick up fares in areas rarely visited by Yellow cabs, specifically in northern Manhattan and Brooklyn, the Bronx, Queens and Staten Island.

New York City also now has a clear path to sell 2,000 more medallions for wheelchair-accessible taxis, which the city projects to generate $1 billion in revenue.

The HAIL Act, short for Hail Accessible Inter-borough Licenses, passed twice in Albany, in 2011 and 2012.

Yellow cab owners opposed it for fear it would ruin their business. They claimed New York City officials overstepped their boundaries when they took the matter to the state.

In 2012, the Manhattan County Supreme Court declared it unconstitutional, finding that Mayor Michael Bloomberg sidestepped City Council opposition by taking it to the Legislature.

The Court of Appeals, New York's highest court, reversed Thursday.

"We conclude that the HAIL Act addresses a matter of substantial state concern," Judge Eugene Piggott Jr. wrote for the court. "This is not a purely local issue. Millions of people from within and without the state visit the city annually. Some of these visitors are disabled, and will undoubtably [sic] benefit from the increase in accessible vehicles in the Manhattan central business district and in the outer boroughs. The Act is for the benefit of all New Yorkers, and not merely those residing within the City. Efficient transportation services in the state's largest city and international center of commerce is important to the entire state. The act plainly furthers all of these significant goals."

Bloomberg hailed the decision. "I am glad to say that the special interests have lost; the people have won," the mayor said.

Critics of the ruling - most of them representing taxi companies - claim to worry that the outer boroughs will get second-class service.

Another decision by the court on Thursday paved the way for passengers to hail a taxi using a smartphone.

Cabbies who want to purchase livery medallions may apply starting Friday.

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