August 13, 2018
To dispel congestion on city streets and to help taxi drivers reap a fair economic share of customers, New York’s City Council voted by a 39-6 margin on August 8 to cap the number of e-hail vehicles allowed to do business in the Big apple. The city will stop issuing new licenses to Uber drivers and other app-based car-for-hire companies for one year, with the exception of a wheelchair-accessible vehicles. In addition, the new regulation gives the city’s Taxi & Limousine Commission authority to set minimum pay standards for drivers.
The passage of sweeping industry regulations—the first in the nation—signaled politicians’ changed attitudes toward the so-called gig economy and electronic car-hailing services such as Uber, Lyft and Via, Bloomberg reported.
The council voted against a similar cap proposed by Mayor Bill de Blasio in 2015, after Uber mounted a television ad campaign and mobilized drivers and customers to oppose it, Bloomberg said. App-based licenses have since increased to more than 80,000 from 12,600, according to the city Taxi & Limousine Commission.
Indeed, the heightened competition has suppressed pay for drivers of Yellow cabs, black car liveries and luxury limousines, Bloomberg reports. Hundreds of cab owners couldn’t earn enough to pay their car leases and taxi-license medallions, and economic desperation became a factor in at least six driver suicides since November.
Ride-hail companies argued against the cap, saying it would shrink the number of available drivers, especially in the boroughs outside Manhattan. Uber supported the minimum-pay standard that will obligate the company to make up the difference when drivers’ earnings fell short, seeing it as a way to give the company an incentive to limit its size instead of ceding that role to the government, Jason Post, a company spokesperson, told the business news outlet.. The level of the pay floor is still to be determined.
The law calls for the cap to remain in effect for a year during which city regulators study the economic and environmental impact of the electronic-hail industry, without restricting licenses for wheelchair-accessible cars. Post said the moratorium on new licenses and the minimum pay floor were the first in the U.S. to be imposed on his company.
Research contact: RDiaz@council.nyc.gov