The 2012 law backed by Mayor Michael Bloomberg ends the exclusive right of the city's yellow medallion cabs to pick up street hails.
The Court of Appeals in Albany rejects claims by medallion owners and taxi lenders that the law is unconstitutional.
A judge last June barred the Taxi and Limousine Commission from proceeding with plans for the city to sell 18,000 of a new kind of permit that lets livery cabs pick up passengers who hail them, but excluding Manhattan below 96th Street and the two airports in Queens.
The plan also authorized the city to sell 2,000 new medallions.
