Do Hailo and Uber taxi e-hail apps defy a NYC judge’s orders? Nobody knows

New York City’s much-anticipated e-hail app program was cut short by a temporary restraining order (TRO) just days after launch, but that hasn’t halted the operations of the two startups that were already approved for participation.

Hailo and Uber‘s cab drivers continue to pick up passengers via the companies’ mobile e-hail apps every day.

Why do they continue to operate even after the pilot program was so clearly blocked?

That’s an answer that no one seems able to agree on, or in some cases, even answer.

New York’s Taxi and Limousine Commission is tight-lipped as it works out what will happen next. Uber is similarly quiet, while Hailo is taking another approach that includes court sessions and courting Prince Harry.

Uber and Hailo in NYC

Even though Hailo and Uber are similar in allowing customers to use their respective apps to hail yellow cabs in New York City, the startups have reacted very differently to the TRO.

Uber spokesperson Matt Mittenthal declined to comment to Skift’s inquiry, but he did note that its competitor, Hailo, “is also operating at the moment under the same conditions.”

Hailo continues to aggressively pursue its entrance into the New York City market. The startup sent out an email on May 10 asking early Hailo Beta testers to “Tweet a pic of your first ride and tag it with #SaveOurSoles to score five Beta invites to share with your friends.”

It announced its open Beta via email on May 14 and tweeted a picture of Prince Harry receiving a brief tutorial of the app from co-founder Russell Hall the next day.

Hailo co-founder Russ showed Prince Harry how to use Hailo to get home after a big night at the @uktiusa Tech event: hailo.to/l4naQ

— HailoNYC (@HailoNYC) May 15, 2013

Hailo heads to court

Hailo CEO and co-founder Jay Bregman went to court on May 6 to argue that the startup doesn’t need a pilot program to run in New York.

Bregman’s affidavit (embedded below) estimates that Hailo is losing some $18,000 every day that the Pilot Program remains ordained. He also said that several of Hailo’s key employees have deferred payment, and six city launches have been delayed as a result of the changing situation in New York.

Bregman tells Skift, “The TRO enjoins the Pilot Program, not Hailo. In fact, we specifically went to court to clarify that point and the judge said unequivocally we were not affected by her ruling. The City has consistently maintained that absent the Pilot program e-hailing is legal – that there are no rules or laws preventing it.”

Stance of the Taxi & Limousine Commission

As Bregman points out in the affidavit, the Taxi & Limousine Commission‘s approval of the Pilot Program is key to eliciting cab drivers’ participation.

“It is apparent that many taxi drivers are wary of using e-hail applications without the express endorsement of the TLC, which is now tied to the fate of the Pilot Program,” Bregman writes in the affidavit.

TLC Commissioner David Yassky was bullish on the eventual success for the pilot program even after the pilot program was cut short.

Yassky is quoted as saying “The Supreme Court was absolutely right that taxi-hailing apps are not only good for the riding public, but perfectly legal as well.  It is appalling that narrow commercial interests continue to try to block passengers from using the latest technology….We’re confident this program will move forward.”

The Taxi & Limousine Commission; however, has been less forthcoming about its current position since the pilot program block.

The TLC was scheduled to meet on May 16, and although the meeting was ultimately cancelled, the e-hail app program was not on the agenda.

“I don’t expect it to be relevant to this meeting, other than a mention of the TRO during the chair’s report at the start of the meeting,” TLC spokesman Allan Fromberg responded in an inquiry from Skift.

New York City’s statement

The quotes captured from what appears to be New York City’s main spokesperson on the topic over the last three weeks make it difficult to deem the city’s official stance on the issue.

On May 1, the TLC cites Michelle Goldberg-Cahn, Senior Counsel of the NYC Law Department as saying, “It’s unfortunate that taxi riders will not be able to continue to test this innovative tool for hailing taxis.”

One week later, Goldberg-Cahn confirmed in a statement to the New York Daily News, “There are no regulations that prevent e-hailing per se.”

When Skift asked TLC spokesman Fromberg on May 14 if Uber or Hailo were allowed to operate outside of the pilot program, he could only reply:

From City attorney (Senior Counsel) Michelle Goldberg-Cahn: “The City is fully complying with the TRO.”

The fate of New York City’s e-hail apps is still pending, but we could have an answer by Monday evening.

A final decision on whether the restraining order will stand or be appealed will be issued on May 20 when a full panel of Appellate Division judges decides on the petitioners’ motion for an injunction.

Below is the affidavit of Jay Bregman, CEO and co-founder of Hailo, which outlines the impact of the pilot program’s delay on the plausibility of an eventual launch.

Download (PDF, 1.89MB)