NY AG Schneiderman says taxi rule could limit fair competition

NEW YORK, Nov. 10 (UPI) -- A proposed rule from the New York City Taxi & Limousine Commission limiting how car services like Uber and Lyft operate would prohibit fair competition, New York Attorney General Eric Schneiderman said.

In a letter from Schneiderman to the commission, obtained by BuzzFeed, the attorney general took a stance against the proposed rule, which would require for-hire-vehicle companies to be officially affiliated with fellow companies in order to share drivers on an as-needed basis.

App-based car service Lyft, a rival of Uber, said the new rule would effectively mean a monopoly for the better-funded Uber.

"The apt analogy would be looking at baseball," said David Mack, Lyft's public affairs director. "If one team has all the money, they're going to buy up all the best players and basically exclude them from going anywhere else."

Scheiderman agrees.

"From a competitive standpoint, these advances may lower the cost of entry for new for-hire vehicle services and encourage existing services to compete more effectively for both drivers and passengers," Schneiderman wrote in the letter he sent to commission.

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"Requiring agreements between competitors raises serious antitrust issues. Ultimately the proposed rule is likely to lead to market consolidation around a small number of the best-capitalized and most well-known services, whether large existing firms or well-financed newcomers. This market concentration will hurt consumers, who can expect fares to increase and service to decline. If this anti-competitive outcome followed from collusion in the industry, it would be illegal. It is no less disturbing as a product of regulatory action," he added.

The commission postponed making a decision on the possible rule at its last hearing on the matter. A new date hasn't been announced for making a ruling.