The three companies are owned by Evgeny Freidman, the flashy taxi tycoon who manages the largest private fleet of cabs and drivers in New York City. Freidman filed for Chapter 11 bankruptcy protection for several of his companies on Wednesday amid an ongoing clash between traditional cab services and startups like Uber to own a piece of the nation’s most lucrative taxi market.
Nearly two dozen taxi services owned by Friedman are said to be affected, many named after types of liquor (Stoli Taxi, Vodka Taxi, Hennessey Taxi) and wine (Merlot Taxi, Chianti Taxi), as well as desserts (Pudding Tax), according to a copy of the bankruptcy filing obtained by Mashable.
The word “Uber” is mentioned 21 times throughout the filing, by way of explaining a frayed relationship with creditors, leaving little room to doubt the role that the $40 billion ride-hailing business had in this taxi franchise’s precarious situation.
“It appears that Citibank and other lenders were concerned about the effect that Uber and other nontraditional ridesharing companies would have on the traditional medallion based taxi business model,” the filing says. “In the Debtors’ view, this concern was misplaced as Uber only has approximately 4% percent of the market in New York City.”
“Nevertheless,” the filing continues, “since the entry of Uber (and similar services) in the marketplace and the publicity they have received, the liquidity in the medallion market has been adversely affected in the immediate term.”
Crain’s New York was the first to report the bankruptcy filing.
The bankruptcy filing comes just as New York City is expected to vote on a proposal to cap the growth of ride-hailing vehicles on the streets, citing congestion concerns. Uber has slammed the move as being motivated by taxi industry contributions to Mayor Bill de Blasio. The startup claims the cap would limit its coverage, cost thousands of jobs and deal a significant blow to its overall business.
In previous statements, Freidman has spoken positive of Uber and its impact on the industry. “Uber is a friend,” he said at one conference a year ago. “Uber has made us move in a direction that we would not have moved before.”
However, the filing makes clear that Freidman’s camp believes Citibank, its creditor, had a “strong desire to develop a relationship with Uber,” which may have motivated it to “pursue unreasonable positions against the Debtors.”
“Mr. Freidman’s management company will continue to operate all of his medallions in New York and nationwide,” Ronn Torossian, spokesperson for Mr. Freidman, said in a statement provided to Mashable. “Mr. Freidman has appointed a chief restructuring officer, and will work diligently to restructure the financial matters of these corporations.”