This happened so much that Bloomberg said screw it and was basically turned a blind eye to what they were doing and let them operate. The NYC Taxi Union got pissed and complained. But while complaining they still basically said in so many words that they still weren't going to service the area. They just didn't want anyone else to.
I had a cab driver pick up my ex girlfriend and her coworkers and pull something shady along the lines of this. They were being dropped in mid town. She was being dropped off uptown. When he dropped her coworkers off, he drove a few more blocks and stopped the cab and told her she had to get out. He wasn't going to drive all the way to Uptown.
So yeah I was glad when Uber gave them competition. Now when I go to NYC I have no problems out of the cab drivers like I used to.