New York caps Uber vehicles

New York became the first major American city on Wednesday to halt new vehicle licenses for ride-hail services, dealing a significant setback to Uber.

By Emma G. Fitzsimmons
  • Published 10.08.18
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A driver helps a passenger into an Uber car at 6th Avenue in New York. (Reuters)

New York: New York became the first major American city on Wednesday to halt new vehicle licenses for ride-hail services, dealing a significant setback to Uber.

The legislation passed overwhelmingly by the City Council will cap the number of for-hire vehicles for a year while the city studies the booming industry. The bills also allow New York to set a minimum pay rate for drivers.

Uber has become one of Silicon Valley's biggest success stories and changed the way people across the globe get around. But it has faced increased scrutiny from government regulators and struggled to overcome its image as a company determined to grow at all costs with little regard for its impact on cities.

New York's move to restrict the number of ride-hail vehicles and to establish pay rules for drivers - another step no other major city has taken - could provide a model for other governments that want to rein in the industry.

New York's aggressive stance also raises questions over how fast Uber can continue to grow as the company, which has been valued at $62 billion, plans to move toward an initial public offering next year. The proposal to cap ride-hail companies led to a clash among interest groups with taxi industry officials saying the companies were dooming their business and Uber mounting a major advertising campaign to make the case that yellow cabs have a history of discriminating against people of colour.

Mayor Bill de Blasio and Corey Johnson, the City Council speaker, said the bills will curtail the worsening traffic on the streets and improve low driver wages.

"We are pausing the issuance of new licenses in an industry that has been allowed to proliferate without any appropriate check or regulation," Johnson said before the vote, adding that the rules would not diminish existing service for New Yorkers who rely on ride-hail apps.

De Blasio praised the bills and said he planned to sign them into law. The cap on new for-hire vehicles would take effect immediately.

"More than 100,000 workers and their families will see an immediate benefit from this legislation," De Blasio said, referring to the city's army of for-hire drivers. "And this action will stop the influx of cars contributing to the congestion."

New York Times News Service