New York City Council Passes Year-Long Cap On Uber And Other Ride-Hailing Services

New York City just became the first municipality in the country to cap the number of ride-sharing vehicles that operate on its streets. As expected, the City Council voted Wednesday to stop issuing new licenses to Uber and other for-hire services for one year—with the exception of wheelchair accessible vehicles—while officials study how the ballooning number of app-based cars are impacting the city.

The bill, which passed by a 39-6 margin, is part of a sweeping legislative package that aims to give the city tighter control of the e-hail companies. In addition to the first-of-its-kind cap, the legislation will establish a minimum pay standard among drivers, with the goal of reducing how much time empty cars spend on the road. Currently, Uber and Lyft drivers have no passengers for about 45 percent of the the time that they're in circulation; according to a report commissioned by the Taxi and Limousine Commission, the vast majority of app-based drivers make less than minimum wage.

"The unchecked growth of app-based for-hire vehicle companies has demanded action—and now we have it," said Mayor Bill de Blasio, whose efforts to cap the ride-hailing services three years ago were famously crushed by a ferocious Uber campaign. "More than 100,000 workers and their families will see an immediate benefit from this legislation. And this action will stop the influx of cars contributing to the congestion grinding our streets to a halt."

By elected officials' own admission, the bills are intended to compensate for past policy failures. Though councilmembers blocked the mayor's proposed cap in 2015, City Council Speaker Corey Johnson now admits the body made the wrong call, and says that he deserves "demerits for not understanding the depth" of the issue. He's added that the situation is "worlds different" this time around, due to the citywide explosion in for-hire vehicle use.

Several other prominent transportation voices have also evolved on this issue, including the city's leading ride-hail expert Bruce Schaller, who opposed the cap the first time around. "That was with 15,000 ride-hail vehicles in the city," he wrote in a Daily News op-ed last month. "Now we have over 65,000 Ubers, Lyfts, Vias and others. Spiraling growth of ride-hail cars, ever-more-clogged streets and three years of subway and bus ridership declines now make action imperative."

According to the FixNYC panel convened to study congestion pricing, for-hire vehicles—which include taxis, liveries, black cars, and luxury limos—now total around 100,000, and account for 50 to 75 percent of all traffic on some of Manhattan’s busiest streets.

But transit advocacy groups like the Riders Alliance and Transportation Alternatives say that while the legislation may ease some of that traffic, it likely won't go nearly far enough. "Let’s be clear: this legislative package is no substitute for congestion pricing. It is only a small part of the equation," said TransAlt spokesperson Joe Cutrufo in a statement.

That view was echoed in a statement released by Uber spokesperson Danielle Filson, who noted, "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."

Beyond addressing the issue of congestion, the newly passed legislation is also seen as a lifeline for the city's struggling cab industry. In recent months, six drivers have taken their own lives as a result of financial turmoil caused by diminishing wages, according to the New York Taxi Workers Alliance. Members of the advocacy group, which represents 19,000 drivers across several sectors, have regularly demonstrated outside City Hall in favor of the cap, and continue to accuse the city of abandoning its professional drivers.

“As far as I’m concerned, the medallion is a contract with the city, and the city reneged on that contract,” former Department of Transportation Commissioner and MTA Board Member Lucius Riccio told Gothamist this spring. "The suicides are the final recognition that the people who warned us how bad this would be have been right all along.”

In a statement, Taxi Workers Alliance Founder Bhairavi Desai said, "This victory belongs to the thousands of NYTWA members scraping by to feed their families, who took time away from their cars, losing precious and hard fought income to be on the streets standing together and standing up for each other."

For its part, Uber has publicly fought the cap (though perhaps less forcefully than it did three years ago) while supporting the minimum wage for drivers. In emails to millions of New York-based customers, the company has claimed that the legislation "could make Uber more expensive and less reliable," and warned that outerborough residents will be left stranded.

But whether those grim predictions actually come to pass may have less to do with the council's vote than how Uber and its ilk respond to the new regulations. As Schaller told us last month, "it all depends on what kinds of decisions Uber makes."