New York To Cap Uber, Lyft And Other Ride-Hail Services

The decision by New York’s City Council is a major blow to the tech companies.

New Yorkers who regularly rely on Uber, Lyft and other ride-hailing services to travel around the city’s five boroughs may find the apps less convenient in the next year. 

The New York City Council voted on Wednesday to cap the number of Uber and other ride-hail vehicles, imposing a one-year freeze on new vehicle licenses as the city studies the demand for and effects of such services on traffic in the area. The council also voted to require drivers get paid minimum wage. The law does not put a cap on new drivers.

The vote is considered a major setback for companies like Uber, since New York is the largest U.S. market for most of them. Critics of the cap worry ride-hail vehicles will become tougher to find and more expensive, while NYC taxi drivers, who often lament that ride-hail services threaten their earning potential, consider the vote a major win.

In a statement Uber spokesperson Danielle Filson said the council’s decision would not improve congestion in the city.

“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,” she said, adding that the company would work “to pass real solutions like comprehensive congestion pricing.”

A Lyft spokesperson said the council’s vote “will have a detrimental impact on those that have historically been underserved by taxis: communities of color and the outer boroughs.” A Via representative said the company was “deeply disappointed” by the “counterproductive” cap.

New York Mayor Bill de Blasio praised the vote, saying the council’s actions will ease congestion in city streets and protect more New Yorkers from earning less than minimum wage.

New York City is the first major U.S. market to place a cap on Uber and similar services, which could inspire other cities to adopt legislation as they grapple with the effects of ride-hailing services. 

In Europe, transportation authorities in London cracked down on Uber’s services last fall, withdrawing its license to operate in the city, which is Uber’s largest European market, according to The New York Times. The company eventually won an appeal on the decision in June after it agreed to open itself up to stricter regulation. The Times reported that Uber, which regained its license to operate for 15 months, agreed to report incidents to the police and share traffic data with the city, among other new measures.