The likes of Uber and Lyft have suffered a major defeat in New York, with the city council voting to limit the number of ride-hailing cars and on-demand delivery vehicles on the city’s streets.
There will be a limited number of Uber and Lyft cars on New York City streets for at least a year as the city looks to freeze new ride-hailing vehicles while it studies the industry.
In August 2018, New York City Council voted to stop giving out licenses to new for-hire car companies, with the exception of wheelchair-accessible vehicles. That means the current number of Uber, Lyft and other ride-hailing vehicles will not increase for a year. New York has also voted to establish new pay rules for drivers.
New York becomes the first city in the US to apply limits and pay rules on companies like Uber, and the news will come as a bitter blow to the ride-hailing company as the city is one of its largest markets.
Prior to the vote, the proposal evoked strong views from interest groups on either side of the argument. New York’s taxi industry has long argued against ride-hailing services, claiming such companies are ruining the business and devaluing the medallion that yellow taxis must own to operate in the city. The politicians behind the proposal, including New York City mayor Bill de Blasio, claim that the bill will ease the city’s traffic congestion and improve drivers’ wages.
“More than 100,000 workers and their families will see an immediate benefit from this legislation,” de Blasio said after the vote, “and this action will stop the influx of cars contributing to the congestion grinding our streets to a halt.”
On the flip side, Uber mounted a strong and costly campaign against the plan. According to the New York Post, ride-hailing companies spent $1 million on ad campaigns lobbying against the proposal and encouraging users to speak out against them. They have claimed the cap will leave many drivers without income and hurt minorities in low income areas of the city that are underserved by public transit and traditional taxis.
“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.