NYC Is Set to Impose a Cap on Uber
Vote to limit app-based for-hire cars is planned for Wednesday.
(Bloomberg) -- New York’s city council is poised to approve a one-year cap on new licenses for Uber Technologies Inc. and other ride-sharing vehicles as part of a sweeping package of regulations intended to reduce traffic and halt the downward slide in drivers’ pay.
The measures, scheduled for a Wednesday vote, would make New York the first U.S. city to impose such limits and set a floor on compensation for the industry’s workers.
The plan is backed by Council Speaker Corey Johnson, who opposed Mayor Bill de Blasio’s similar proposal three years ago. The council killed that bill after an Uber television advertising campaign featuring drivers and customers. Now, Johnson says, he doesn’t buy Uber’s argument that a one-year “pause” will take away opportunities for jobs and transportation service in neighborhoods outside Manhattan.
“This time around is worlds different,” Johnson said, adding that the five-bill package has broad support among council members. “Congestion is worse now and there are so many for-hire vehicles on the road. We also can’t forget the crushing financial and emotional hardship drivers of all types face.”
The package comes after a spate of driver suicides dramatized the economic plight caused by an oversupply of taxis, e-hail vehicles and limousines. The city has more than 80,000 app-based cars, often without passengers, up from 12,600 since 2015, according to the New York City Taxi and Limousine Commission.
App-based companies Uber, Lyft Inc. and Via Transportation Inc. tried to head off the council vote with an offer to set up a $100 million fund to help debt-laden drivers who had borrowed hundreds of thousands of dollars to buy taxi medallion operating permits years ago. Council members rejected the deal.
“If they really wanted to help the owner-drivers who are facing financial hardship, they could still do that on their own, but it’s not going to affect how we arrive at a public-policy solution,” Johnson said.
The council bills also set a minimum pay standard, after a study last month found that 85 percent of for-hire vehicle drivers earn less than $17.22 an hour.
A First
New York’s growth cap and pay floor each would be the first in the U.S., said Uber spokesman Jason Post. The city is also unique in the U.S for regulating app-based companies as for-hire vehicles such as black car limousines, Post said.
The disruption caused by the app-based ride industry has drawn government scrutiny worldwide. Bulgaria and Italy have moved to ban it, and it’s faced suspensions in France, Spain, Hungary and the Netherlands. In Finland, Uber restarted operations recently after the government enacted new licensing rules. In London, it’s required to offer drivers insurance and limited work hours.
The Taxi Workers Alliance, a driver advocacy group that opposed a minimum pay measure last month over concerns it might hurt some drivers’ incomes, backed the rewritten version. The bill would require that companies pay any difference between the established minimum and what the driver earns through fares.
“Every driver needs a raise, and this package is the first step toward stopping the crisis of poverty,” said TWA Executive Director Bhairavi Desai.
Minimum Pay
Uber also supports the minimum-pay standard, spokesman Post said, because it gives the company an incentive to aim for a total number of drivers that isn’t so large that competition reduces their earnings.
The San Francisco-based company, which was founded in 2009 and operates in more than 600 cities worldwide, opposes any government-set cap on drivers, Post said. Such a limit would decrease overall service, increase costs for passengers and reduce service to neighborhoods that don’t have easy access to mass transit, he said.
Joseph Okpaku, a spokesman for Lyft, accused the council of rushing the vote, "essentially making sure that as few people have a chance to weigh in about the impact of this bill as possible.”
The legislation, though, follows months of council talks with economists, drivers, fleet owners and passengers, and is a rewrite of a package debated during an all-day public hearing in April. The debate mirrors an international discussion over how to regulate the ride-sharing services.
The one-year cap allows unlimited additional permits for wheelchair-accessible cars and exceptions in the event that data shows certain neighborhoods require additional cab service.
Mayor De Blasio, a second-term Democrat, supports the legislation.
“I think the council is doing the right thing here on this larger issue of for-hire vehicles, and one of the most central reasons is exactly why I ran for this office, to fight income inequality,” the mayor said Friday on WNYC radio. “It’s hurting the livelihoods of the yellow cab drivers as well. That alone is a reason to call a time out and assess what’s going on here.”
To contact the reporter on this story: Henry Goldman in New York at hgoldman@bloomberg.net
To contact the editors responsible for this story: Flynn McRoberts at fmcroberts1@bloomberg.net, Stacie Sherman, William Selway
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