Uber sues NYC over new ‘cruising cap’

Back in August, the city’s Taxi and Limousine Commission (TLC) voted to enact a “cruising cap” to reduce the number of vehicles that drive around the city without passengers. And last week, as The Verge reported, Uber sued the city for the rule, arguing that it is “arbitrary and capricious, preempted, and otherwise contrary to law,” the complaint reads.

When the new rule was announced, TLC said that 41 percent of the time for-hire vehicles are on the road is spent idling without passengers. The cap requires app companies to reduce the number of idling vehicles with no passengers in the Manhattan core (below 96th Street) to 31 percent by August 2020. Along with the “cruising cap,” the TLC announced in August that it would extend a cap on for-hire vehicle licenses.

But in the lawsuit, Uber says that the rule was the product of a “rushed and unlawful process” arguing that the city based the “extremely ambitious” 31 percent target on a “deeply flawed economic model” and doing so without responding to comments from drivers and community groups who oppose the rule. The lawsuit also argues that the rule interferes with the state’s congestion pricing plans.

“Drivers’ flexibility is already being threatened by Mayor de Blasio’s regulations, and the cruising cap will only make that worse,” Harry Hartfield, a spokesperson for Uber, told Curbed in a statement. “This arbitrary rule used a flawed economic model, did not take into account how drivers are affected by previous regulations, is preempted by the state and was voted on despite the objection of City Council members and community groups.”

Additionally, the suit argues that the 31 percent target is not achievable given that no other point-to-point service providing mostly individual rides has achieved similar percentages and that it would “threaten the viability of the ridesharing model as it currently exists, jeopardizing the benefits this model has created for riders and drivers.” The complaint also alleges that the target levels of utilization can’t be sustained because, among other reasons, TLC considers “en route time,” or the time spent picking up passengers, as “cruising.”

The city says that both the cap on vehicle licenses—which Uber also sued the TLC for back in February—and the cap on cruising are legal and needed to reduce congestion.

“We will continue fighting for the people of New York City against a company that seeks to put profit first, and the people and drivers they serve last,” Seth Stein, a City Hall spokesperson told Curbed in a statement. “Extending the cap on the issuance of new FHV vehicle licenses for at least the next year in tandem with the cap on cruising is not only legal, it will bring needed relief to congested streets and hardworking drivers.”

The cruising cap and other measures to reduce the amount of vehicles driving around the city is something that taxi workers (who currently face crippling amounts of debt as the value of medallions dramatically decreased) have long supported.

“Uber has plenty of money to sue against life-saving rules that protect drivers drowning in a race to the bottom—but apparently not enough money to actually pay drivers,” Bhairavi Desai, president of the Taxi Workers Alliance, said in a statement. “Last week, Uber blamed the minimum wage and utilization rate on the company’s decision to log drivers off—Now, Uber wants to be able to flood the streets without limit and keep app drivers with their cars empty for longer, all the while wiping out yellow taxis and other sectors.”