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New York’s cap on Uber and other for-hire vehicles, explained

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Everything you need to know about the first-of-its-kind regulation on ride-hailing services

NYC First Major City To Attempt To Cap Number Of Ride-Hailing Services Photo by Spencer Platt/Getty Images

This week, the New York City Council voted to approve several pieces of legislation that will place a yearlong moratorium on the number of for-hire vehicles—Uber, Lyft, and their ilk—that are allowed on city streets.

The move comes at a time when the number of FHVs in use in New York has increased dramatically, but their impact—in increasing congestion, decreasing the value of yellow taxi medallions, and affecting the mental well-being of drivers—is less clear. The last time a study of FHVs was conducted in New York City was in 2015; since then, the urban transportation landscape has shifted substantially.

The city sees the cap as an opportunity to conduct a new study about the impact Uber and Lyft have on NYC. Those companies, however, have pushed back on the proposed regulations, asserting that a cap would drive up prices, limit the availability of cars, and target already marginalized populations.

Confused? Here’s what you need to know.

The backstory

There are more for-hire vehicles than ever in New York; recent estimates found that there are now more than 100,000 licensed FHVs (including livery cabs and cars affiliated with ride-hailing apps), and that the number of trips taken via those services has surpassed those via yellow taxis. (The MTA has also tried to blame its declining ridership numbers on the rise of FHVs, though surely its own meltdown is at least partially to blame there.)

The City Council bills, which were introduced at the beginning of 2018, will limit the number of FHVs to what is currently available while the city studies how the services impact traffic and transit.

This isn’t the first time that the city has attempted to curb the number of licenses being issued to for-hire vehicles: Back in 2015, Mayor Bill de Blasio supported a cap on the number of Ubers on city streets, but after a protracted battle with the company—which waged an effective lobbying campaign against the cap—the mayor backed off.

What will the for-hire vehicle cap do?

The legislative package is made up of five bills: One will stop the TLC from issuing new licenses for FHVs for one year, with the exception of wheelchair-accessible vehicles, while the city studies how the services impact traffic. Another will enact new regulations on high-volume FHV services like Uber and Lyft, requiring them to provide data on usage and charges, as well as impose a fine of $10,000 for those who do not comply.

Geographic restrictions, as well as a minimum wage for FHV drivers, will also be implemented through other measures. Members of the City Council also support “driver assistance centers” that would help struggling cab drivers.

Who supports the cap?

The proposals garnered broad support in the City Council, with all five passing with an overwhelming majority. “Our goal has always been to protect drivers, bring fairness to the industry and reduce congestion,” council speaker Corey Johnson said in a statement to the New York Times. “That’s what this proposal does, and it represents the broad outlines of what we think our next steps should be as a city to help the industry.”

The De Blasio administration is also on board: the mayor issued the following statement after the vote:

Our city is directly confronting a crisis that is driving working New Yorkers into poverty and our streets into gridlock. The unchecked growth of app-based for-hire vehicle companies has demanded action – and now we have it. More than 100,000 workers and their families will see an immediate benefit from this legislation. And this action will stop the influx of cars contributing to the congestion grinding our streets to a halt.

Some drivers, including members of the New York Taxi Workers Alliance (and the organization as a whole), support the cap, and believe that it will ultimately lead to better working and living conditions for drivers. The Independent Drivers Guild, which represents more than 60,000 NYC drivers, also supports the cap (and has a FAQ on its website aimed at helping drivers understand how it will affect them).

How have Uber and Lyft responded?

Similarly to when De Blasio proposed a cap on FHVs in 2015, services like Uber and Lyft have gone on the defense, arguing that a cap is not only bad for the drivers who rely on their services for income, but will also hurt New Yorkers, particularly those who live in areas underserved by transit.

A message sent to Lyft users on August 1.

According to the New York Post, those companies have spent $1 million this year on lobbying in an effort to get the City Council and the De Blasio to change their tune. They’ve also used their apps as a way to sway public opinion; messages sent out to users have suggested that the cap will lead to longer wait times for cars, higher prices, and an overall reduction in service, despite the fact that the number of FHVs won’t decrease.

The companies have also taken steps to try and sway the City Council in their direction. A proposed “hardship fund” to help taxi medallion owners was rejected by the city, and though Uber and Lyft have been publicly supportive of congestion pricing—which would curb traffic while bringing in revenue for the city’s chronically underfunded transit system—the proposal hasn’t really gone anywhere. (Governor Andrew Cuomo did, however, succeed in passing a surcharge on cabs and FHVs below 96th Street; using yellow taxis will cost an additional $2.50, while the fee for FHVs will be $2.75.)

Some civil rights organizations have sided with FHVs, including the New York Urban League and the NAACP. “It’s a racial issue,” The Rev. Dr. Johnnie M. Green Jr., the pastor of a Harlem church, told the New York Times. “The people that champion the crusade against Uber do not have a problem hailing yellow cabs.”

What happens next?

Now that the cap has been passed by the City Council, De Blasio will sign it into law. And Uber, at least, is already taking action to keep cars on streets, according to the New York Times:

Uber said the company would immediately reach out to tens of thousands of for-hire vehicle owners who are already licensed but work for other services and try to recruit them to work for Uber. The company said it would also continue to press for another solution, known as congestion pricing — a proposal to toll drivers entering Manhattan’s busiest neighborhoods and that would require approval from state lawmakers.