New York City Clips the Wings of Uber and Lyft by Voting to Cap New Ride-Hail Vehicles

In a move aimed at reducing congestion and helping for-hire drivers make a decent living, the New York City Council has voted in favor of a 365-day ban on licensing new ride-hail vehicles and setting a minimum wage threshold for drivers

New York City Clips the Wings of Uber and Lyft by Voting to Cap New Ride-Hail Vehicles

The New York City Council on Wednesday (August 8) voted overwhelmingly in favor of enforcing a year-long cap on new vehicle licenses for ride-hailing services – a move that is being expected by many to result in increased fares and longer wait times.

This happens to be the first legislation of its kind passed by a major U.S. city and is part of a series of proposals that also calls for establishing a minimum wage for drivers.

Before they come into effect, both bills will need the final approval of Mayor Bill de Blasio, who has nothing but good things to say about the proposed actions and has already expressed his intention to authorize their implementation.

“More than 100,000 workers and their families will see an immediate benefit from this legislation,” Mayor de Blasio said in a statement, obviously referring to the megacity’s horde of for-hire drivers.

“And this action will stop the influx of cars contributing to the congestion grinding our streets to a halt,” the Mayor added.

While the 12-month legislation is in effect, the Taxi and Limousine Commission (TLC) will conduct a study to gauge the effects of ride-hailing services on the city’s traffic.

Corey Johnson, the City Council speaker, also voiced his consent to the bills, saying that the legislation would put a curb on proliferation by ride-hailing services that have gone on unchecked all this while.

“We are pausing the issuance of new licenses in an industry that has been allowed to proliferate without any appropriate check or regulation,” stated Johnson, going on to say that the new rules would not affect existing services availed by New Yorkers.

“I think New Yorkers can rest assured,” Johnson said. “If they depend on an Uber or a Lyft — that’s not going anywhere.”

With New York City being one of the most lucrative areas of operation for these businesses, it was but obvious that companies like Uber, Lyft, and Via would feel hard done by and would speak up against the idea of putting a cap on new licenses for as long as a whole year.

“The City’s 12-month pause on new vehicle licenses will threaten one of the few reliable transportation options while doing nothing to fix the subways or ease congestion,” Uber said in a statement.

“We take [Council Speaker Corey Johnson] at his word that the pause is not intended to reduce service for New Yorkers and we trust that he will hold the TLC accountable, ensuring that no New Yorker is left stranded,” the statement further said.

“These sweeping cuts to transportation will bring New Yorkers back to an era of struggling to get a ride, particularly for communities of color and in the outer boroughs,” San Francisco-based Lyft said in a separate statement.

“We will never stop working to ensure New Yorkers have access to reliable and affordable transportation in every borough,” assured the statement.

NYC-based Via Transportation also opposed the move but remained optimistic that the city would not impose any sanctions on carpools, as they contribute towards reducing congestion and ensure the highest remuneration for drivers.

Refuting the claims of ride-hailing services that their protests were falling on deaf ears, Johnson said, “Uber might not be saying this on the record, but they were involved throughout the entire process.”

He added: “They were real full stakeholders in all this.”

As was expected, the New York Taxi Workers Alliance (NYTWA), which is an 18,000-strong union for the city’s cab drivers, welcomed the decision in favor of the drivers.

“Today, NYTWA members won a historic victory as New York City Council voted YES on the first legislation of its kind to regulate App companies like Uber and Lyft!” said the NYTWA website.

“New York City is the first city in the country enact drivers’ demands into legislation! Months of tireless organizing from members of every sector – yellow, App-based, green, livery, black car – made this victory possible!” it said.

Bronx Democrat and Council Member Ruben Diaz Sr. did not mince words in his support for the legislation.

“Uber has about 80,000 vehicles in the city already, and no regulation — you think Uber is a taxi? We don’t even know what Uber is,” Diaz said.

“Now, we want to regulate Uber, and Uber will be a taxi,” he added.

While Uber rides are relatively more comfortable and economical compared to taxis, its drivers are finding it increasingly difficult to manage with what they are left with after deductions, a TLC study released on Monday (August 6) has revealed

“Their low pay has persisted despite the rapid growth of the industry,” said the study report.

New wheelchair-accessible vehicles, however, will not come under the purview of the new legislation and will, hence, enjoy exemption from the proposed year-long restriction.

Having lost an acrimonious showdown with Uber over a similar cap proposal back in 2015, Mayor de Blasio seems to have had the last laugh after Wednesday’s overwhelming majority in support for the bill.

“Our city is directly confronting a crisis that is driving working New Yorkers into poverty and our streets into gridlock,” de Blasio also said in his statement.

“The unchecked growth of app-based for-hire vehicle companies has demanded action – and now we have it,” the Mayor added.

If the new legislation succeeds in achieving its goal of easing congestion and improving the plight of drivers, it could well set the tone for similar action in other U.S. cities that are reeling under the influx of ride-hail vehicles, as well.

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