Published: Thu, August 09, 2018
Finance | By Loren Pratt

New York City Council Votes to Cap Uber and Lyft

New York City Council Votes to Cap Uber and Lyft

The New York City Council on Wednesday agreed to cap the number of licenses for ride-hailing services such as Uber Technologies Inc for one year, dealing a blow to the companies that have relied on the largest US metro area for a major source of their revenue.

"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", the company said in a statement.

Mayor Bill de Blasio said he plans to sign the bills into law. De Blasio called the growth of ride-hailing a "crisis" and said the services are clogging streets and "driving New Yorkers into poverty".

City officials said that in the intervening years the number of for-hire vehicles on the streets has surged from 63,000 to more than 100,000, forcing drivers to compete for scarce fares and making it hard for any of them to earn a living wage.

But Councilwoman Laurie Cumbo, a Democrat, said Uber will still be available despite the moratorium on new cars.

This cap is the first of its kind in the country, and if it proves successful in addressing issues related to ride hailing, other cities could follow suit.

'Uber as you know it is going to be Uber as you know it, ' Cumbo said.

The city's measures follow mounting public pressure to confront the rise of the ride-hailing services, as taxi industry fortunes have fallen and workers have struggled to make a living. It comes in the wake of reports about the declining price of taxi medallions and taxi driver suicides.

Via Founder and CEO Daniel Ramot says that Via drivers are earning 50% more than drivers for other ride-sharing companies like Uber and Lyft.

"More than 65,000 working families will be getting a desperately needed raise because of today's vote".

Under the cap, drivers will be required to be paid a minimum wage and ride-hailing companies will be granted licenses for wheelchair-accessible vehicles.

"We are pausing the issuance of new licenses in an industry that has been allowed to proliferate without any appropriate check or regulation", Corey Johnson, the City Council speaker, told the New York Times before the vote.

Uber and Lyft contend they reduce users' dependence on private vehicles and complement public transit.

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