In major defeat for Uber and Lyft, New York City votes to limit ride-hailing cars

The New York City Council voted on Wednesday in favor of a cap on the number of for-hire delivery and transportation vehicles on the city’s streets, striking a stunning blow to tech companies like Uber and Lyft.

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.

Uber and Lyft have argued that the cap will lead to longer wait times and less reliable service in the city, especially in the outer boroughs. But according to city council speaker Corey Johnson, a Manhattan Democrat, New Yorkers won’t notice a difference in their day-to-day travel — aside from perhaps an extra 12 to 15 seconds taken when they order a car.

“I think New Yorkers can rest assured,” Johnson said. “If they depend on an Uber or a Lyft — that’s not going anywhere.”

Uber And Lyft Drivers Rally In NYC In Favor Of Cap For Fore-Hire VehiclesPhoto by Drew Angerer / Getty Images

Council Member Ruben Diaz Sr, a cowboy-hat sporting Democrat from the Bronx, characterized the legislation as an attempt to level the playing field. “Uber has about 80,000 vehicles in the city already, and no regulation — you think Uber is a taxi? We don’t even know what Uber is.”

He added, “Now, we want to regulate Uber, and Uber will be a taxi.”

New York is the first US city to propose a temporary freeze on the total number of ride-hail vehicles. The city is also one of the biggest money-makers for these same services. Growing numbers of residents are turning to ride-hail services to supplement — or sometimes replace — the city’s faltering public transportation system. Right now, there are more than 100,000 for-hire vehicles in New York, outnumbering yellow taxis four to one. Johnson argues that these vehicles help to worsen traffic congestion, citing a report that found that more than a third of them were empty at any given time.

The unchecked growth of these vehicles has seriously cut into the value of the city’s taxi medallions, the metal plate that is required to pick up street hails. In response to the booming growth in Uber and Lyft, taxi drivers have staged protests and lobbied elected officials for relief.

At the conclusion of the vote, Johnson noted the “real human impact” of the explosion in the number of Uber and Lyft vehicles in the city. Some taxi drivers have filed for bankruptcy, while others have reportedly committed suicide after falling deep into debt. Six drivers have taken their lives since the beginning of the year, Johnson said.

Uber and Lyft have pushed back hard, funding million-dollar ad campaigns and urging customers to lobby on their behalf. Not only will the cap leave their drivers without an income, they argued, but the cap would disproportionately hurt the low-income and minority residents in the city’s outer boroughs who lack easy access to most forms of public transit and are often overlooked by traditional taxi services.

Along with the cap, another bill would require high-volume ride-hailing companies like Uber and Lyft them to provide data on usage and charges or face a $10,000 fine for noncompliance. Geographic restrictions and a $15 minimum wage for ride-share drivers were also approved.

Uber and Lyft swiftly condemned the vote by the Council. “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,” a spokesperson for Uber said in a statement. Joseph Okpaku, vice president of policy for Lyft, said in a statement, “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.” Both companies vowed to keep up with demand under the new restriction.

But council members were unswayed. Ultimately, 39 council members voted in favor of the cap, while just six opposed it. Johnson denied claims from ride-hailing companies that their protests were being ignored. “Uber might not be saying this on the record, but they were involved throughout the entire process,” he said. “They were real full stakeholders in all this.”

The council’s vote Wednesday could have national consequences. If it succeeds in leveling the playing field for taxi drivers, easing congestion, and raising standards for all drivers, the bills could serve as a national template for other cities struggling under the strain of ride-hail cars.

But it was hardly the most dramatic moment of the day. An earlier vote to rezone a swath of Manhattan’s Inwood neighborhood drew vocal protests from opponents in the chamber’s upper balcony. Those protestors were cleared from the chamber after someone threw fake money down on the council members below.