Uber, Lyft and other ride-hailing services were dealt a major regulatory blow on Wednesday after the New York City Council voted to cap the number of new licenses for one year in an attempt to reduce traffic congestion and increase driver compensation.
New York City’s vote to cap ride-hailing vehicle licenses is the first of its kind in the United States. Despite lobbying efforts by Uber and Lyft that cost them millions of dollars, the 39-6 vote by the council is an attempt to slow down the explosive growth of drivers on its streets and to protect yellow cab drivers in the city who reportedly have seen an increase in bankruptcies and suicides in the past few years.
“Our city is directly confronting a crisis that is driving working New Yorkers into poverty and our streets into gridlock,” tweeted New York City Mayor Bill de Blasio after the vote. “The unchecked growth of app-based for-hire vehicle companies has demanded action — and now we have it.”
Lyft did not respond to a request from this news organization for comment.
But in a statement to CNBC, Lyft said the council’s decision will “bring New Yorkers back to an era of struggling to get a ride, particularly for communities of color and in the outer boroughs.”
Uber spokesperson Danielle Filson said in a statement to this news organization that the license cap “will threaten one of the few reliable transportation options while doing nothing to fix the subways or ease congestion.”
“In the meantime, Uber will do whatever it takes to keep up with growing demand and we will not stop working with city and state leaders … to pass real solutions like comprehensive congestion pricing,” said Filson.
No city in the Bay Area has proposed a similar move to cap ride-hailing licenses for Uber and Lyft, which are both headquartered in San Francisco.
The number of ride-hailing vehicles operating for Uber, Lyft or Via in New York City exploded from 12,600 in 2015 to 80,000 in 2018, according to the New York City Taxi and Limousine Commission. By contrast, there are 14,000 yellow cab drivers in the city, many of them immigrants who spent their savings to obtain expensive medallions allowing them to drive, according to New York City’s alternative magazine The Village Voice.
With Uber and Lyft drivers overwhelming cab drivers, yellow cab drivers’ incomes have plummeted, pushing many into debt, according to The Village Voice. At least six yellow cab drivers have died by suicide due to financial woes, according to New York Taxi Workers Alliance.
A recent study from a transportation consultant — who previously was employed by New York City Taxi and Limousine Commission — found ride-hailing services led to at least a 160 percent increase of overall miles driven in dense U.S. cities, including San Francisco.
In addition to the license cap, New York City Council passed a spate of bills on Wednesday to regulate Uber and Lyft. Another bill required Uber, Lyft and other similar companies to provide data on usage and charges, or face a $10,000 fine for noncompliance. Another approved bill set geographic restrictions and a minimum wage for ride-hailing services’ drivers, The Verge reported.
