The New York City Council voted on Wednesday to limit the number of ride-sharing services, including Uber and Lyft. After intense campaigning from taxi drivers in the city, council members agreed in a 39-6 vote to pass multiple bills that will halt the business of these ride-sharing apps.
“The council voted to halt the issuance of new for-hire vehicle licenses for 12 months while it studies the booming industry. Under the cap, Uber and Lyft could still be granted licenses for wheelchair-accessible vehicles — which both companies sorely lack — but would be prevented from adding new ride-hail vehicles for one year. The city’s Taxi and Limousine Commission could also issue licenses in particular neighborhoods that are running low on ride-hail vehicles. Another bill that passed would establish a $15 living wage for drivers. The bills now go to the desk of Mayor Bill de Blasio, who has indicated his support for a cap,” writes The Verge.
Blasio has been an advocate of legislation halting ride-sharing services in the past claiming that they increase congestion.
“Our city is directly confronting a crisis that is driving working New Yorkers into poverty and our streets into gridlock,” said Blasio.
“Our city is directly confronting a crisis that is driving working New Yorkers into poverty and our streets into gridlock. The unchecked growth of app-based for-hire vehicle companies has demanded action -— and now we have it,” tweeted the mayor.
Even some ride-sharing drivers are in support of the proposal because it will limit the competition and increase their wages.
“Workers and New York leaders made history today. It’s not easy taking on Silicon Valley behemoths, but we kept on fighting for what we know is right and today the workers prevailed,” said Ryan Price, the executive director of the Independent Driver’s Guild, which also represents 65,000 app-based drivers.
While taxi drivers and others in favor of the legislation are rejoicing, both Uber and Lyft are arguing that the cap will lead to longer wait times, higher fares, and will ultimately make it more difficult for users to get rides, especially in the outer boroughs.
“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,” said Danielle Filson, a spokeswoman for Uber. “Uber will do whatever it takes to keep up with growing demand.”
Lyft, which ironically has had to team up with Uber against this legislation, expressed similar sentiments.
“These sweeping cuts to transportation will bring New Yorkers back to an era of struggling to get a ride, particularly for communities of color and in the outer boroughs,” said Joseph Okpaku, vice president of public policy for Lyft. “We will never stop working to ensure New Yorkers have access to reliable and affordable transportation in every borough.”
These apps have changed the way New Yorkers get around the city. Users argue that they are more reliable and cost-effective than taxis.
The subway and bus ridership has decreased since the services became popular in the city.
New York City is the first U.S. city to propose this type of regulation, which will be temporary, at least for now.
“Currently there are approximately 100,000 — an increase of 37,000 just since 2015. During the year the cap is effective, the city plans to study the economic and environmental impact further and it is allowing the various services to add wheelchair-accessible cars and vans in the meantime,” writes the New York Times.
Also, if ride-hailing apps don’t offer up data on usage and charges, the companies could get fined up to $10,000. The bill also forces the companies to pay drivers the minimum wage.
New York City represents one of the biggest markets for these ride-sharing services. With that in mind, this legislation will likely have a significant impact on the ride-sharing apps’ sales.
Uber, which has plans to go public next year, made $7 billion in revenue last year but also lost $4.5 billion.
This legislation could just be the first of many, halting the profits of these tech companies.
Author’s note: Every time the government (on any level-city, state or federal) interferes with free enterprise, they halt its growth. This interference with Uber and Lyft, will not only force many people out of their jobs in New York, where it is already much more expensive to live, but it will push up the cost of transportation. Why should Uber and Lyft be punished for offering a better service than taxis? If anything, the taxi industry has had to improve their service in order to keep customers. From my point of view, that’s a good thing.