Officials in New York City are considering a controversial push to limit the number of ride-hailing drivers for companies like Uber and Lyft that are allowed on the road.
The New York City Council, concerned that the companies don’t pay drivers fairly and that the advent of Uber and Lyft has added to traffic congestion, is preparing to make a decision on legislation that would put a cap on the amount of ride-hailing vehicles on the city’s streets.
New York is Uber’s largest market in America, and there are more than 100,000 ride-hailing vehicles operating in the city currently, according to numbers from the city as reported by The New York Times.
The proposed legislation would put a pause on issuing all new for-hire vehicle licenses, expect for those that are wheelchair accessible, while city officials take a year to study the effects of the ride-hailing market on New York. The measure has the support of City Council Speaker Corey Johnson and New York Mayor Bill de Blasio.
It’s not the first time New York has attempted to limit the app-based car services. Back in 2015, when the city says there were only 63,000 ride-sharing cars on the road, New York Mayor Bill de Blasio introduced a similar measure that failed to pass.
TPG reached out to City Hall for comment, and was referred to a recent interview with de Blasio on The Brian Lehrer Show.
“I think what we tried to do a few years ago to put some realistic limits in place to fight congestion in the name of fairness for everyone in the industry, I think it was the right direction,” de Blasio told the WNYC radio host. “We have more and more evidence — a huge number of these for-hire vehicles like Uber cars are driving around empty. Unfortunately Uber’s business model is to flood the zone, to get lots and lots of drivers, make them basically compete against each other, and a lot of times not make much money.”
The measure is one of the most aggressive proposals city officials have taken against the sharing economy. The City Council recently proposed new minimum wage requirements for ride-hailing companies — another first of its kind — and earlier this month mandated that home-sharing company Airbnb must share its New York City-based hosts’ names and addresses with officials.
“So, as far as I can see this proposed legislation is addressing some really serious issues in a smart way and I look forward to looking at it, and I think the Council is trying to do something important here,” de Blasio said.
Ride-hailing companies are not happy over the potential new legislation.
“This would take New York back to an era of standing on the corner and hoping to get a ride,” a Lyft spokesperson told TPG in an emailed statement. “Wait times would increase significantly and driver earnings and job opportunities would shrink. Worst of all, the proposals prioritize corporate medallion owners above the overwhelming majority of New Yorkers.”
Uber feels similarly to Lyft. “The City Council’s Uber cap will leave New Yorkers stranded while doing nothing to prevent congestion, fix the subways and help struggling taxi medallion owners,” Josh Gold, a spokesman for Uber, told The New York Times. “The Council’s cap will hurt riders outside Manhattan who have come to rely on Uber because their communities have long been ignored by yellow taxis and do not have reliable access to public transit.”
TPG also reached out to Uber for more information but did not hear back by time of publication.
Other critics of the measure say that the legislation would unfairly affect the outer boroughs — and minorities by extension. “While it’s entirely possible that a cap would reduce congestion in the central business district, it’s equally plausible that it would devastate transportation options in the rest of the city, predominantly communities of color, which have long been underserved and overlooked by transportation officials and independent cab drivers,” Arva Rice, president of the New York Urban League, wrote in an op-ed in May.
Another downside, critics say, is that the Metropolitan Transit Authority is missing out on hundreds of millions of dollars in fees to help fix New York’s ailing subways. Surcharges on New York’s taxis and for-hire vehicles will take effect in 2019 — part of an effort to reduce the city’s congestion. The fees, which will be an additional $2.75 for app-based car services, $2.50 for yellow cabs and $.75 cents for pooled ride-sharing, are estimated to generate an extra $400 million for the MTA.
The new legislation could “potentially depress revenues from the congestion surcharge as well, thereby impacting funding for transit,” the Tri-State Transportation Campaign, a nonprofit transportation policy organization, said in its report on the proposal.
App-based car services complete more than 10,000 trips per day in New York City. The City Council could vote on the driver cap proposal as soon as August 8 of this year.