The City of New York regulates taxicabs and fore-hire vehicles like Uber. Those regulations sometimes impact the First Amendment. In this case, the city's rules governing commercial speech in this vehicles are under attack. The Court of Appeals says these rules do not violate the First Amendment.
The case is
Vugo, Inc. v. City of New York, issued on July 16. The city has banned video advertisements inside for-hire vehicles (FHV) on the basis that "passengers rind in-ride advertisements . . . extremely annoying." But taxicabs (distinct from FHV's) are allowed to have certain advertisements (they call it "Taxi TV") to defray the costs of computer screens and related technology in those vehicles to alert riders to track the progress of their metered fare as the taxi's sit in traffic and the meter continues to rise. The FHV people claim the prohibition against these advertisements in their cars violates the First Amendment.
Commercial advertisements must satisfy constitutional standards, but since these advertisements do not involve political speech, the government enjoys additional leeway in regulating this speech, and the rules cannot be struck down unless they directly advance a substantial governmental interest and the regulation is no more extensive than necessary to sere that interest. We call this the "intermediate scrutiny" test, as opposed to the much more restrictive standards guiding political speech restrictions. After reviewing recent legal developments in this area, the Court of Appeals (
Katzmann, Livingston and Droney) concludes that the Supreme Court in
Sorrell v. IMS Health, Inc., 564 U.S. 552 (2011), has not altered the intermediate scrutiny standard relevant to these claims, and no Court of Appeals has ruled otherwise.
First things first: the Court says the City has advanced a substantial governmental interest in prohibiting video advertisements in FHV's because the public hates these advertisements. This logic derives from cases holding the government has a substantial interest in regulating community aesthetics and preventing "undue annoyance." This case extends that rationale to video advertisements.
Second, the regulation has a reasonable fit with the interest in avoiding customer annoyance. The FHV lawyers argue the regulation is underinclusive, which even the Court of Appeals says can raise a "red flag." But the government still has authority to regulate matters like this. The City wins this case (and the district court's contrary ruling is overturned) because (1) the Taxi TV exception facilitated the installation of the handy credit card machines in the vehicles and (2) the City had good reason to ban these annoying advertisements. And, by the way, it's not me who obsesses over these annoying advertisements. The Second Circuit ruling repeatedly makes reference to how irritating they are. The fact that taxicabs and not FHV's cannot use these advertisements is not fatal to this regulation, as the FHV's covered by the challenged rules accounted for more than one-third of the daily passenger trips in 2016, including the yellow and green taxis that are not classified as FHV's, the ones that we hail from the street. According to the statistics, that year, riders took 370,000 daily trips in yellow taxis and 213,000 daily trips in Uber and Lyft vehicles. Since that many people were spared these advertisements, that amount is substantial enough to justify the selective regulation.