NYC Freezes Licenses for Ride-Hailing, For-Hire Cars

New York City has become the first major U.S. city to cap ride-hailing services and for-hire cars, after the City Council voted today in favor of a package of bills that will further regulate the app-based services.

All new licenses for ride-hailing groups such as Uber and Lyft will be halted for a year — with the exception of wheelchair-accessible vehicles — while the council further studies the industry, particularly its impact on traffic congestion.

Currently, there are more than 100,000 ride-hailing vehicles in New York City, up from 63,000 in 2015. According to the New York City Taxi and Limousine Commission (TLC), those vehicles made 17 million trips in February 2018. At the same time, medallion-owning taxis made 8.5 million trips during the same time period, down from 11 million two years earlier.

Some city officials believe that the increasing number of ride-hailing vehicles is directly contributing to an increase of traffic congestion on city streets.

Uber officials previously wrote on the company’s blog that while some of the regulation bills put forward were worthwhile, the bill capping vehicles would result in a less reliable platform and more expensive rides. Similarly, Lyft officials said that the legislation could result in at least 25% fewer drivers on the road.

“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,” Uber said in a statement. “We take [Speaker Corey Johnson] at his word that the pause is not intended to reduce service for New Yorkers and we trust that he will hold the TLC accountable, ensuring that no New Yorker is left stranded. In the meantime, Uber will do whatever it takes to keep up with growing demand and we will not stop working with city and state leaders, including Speaker Johnson, to pass real solutions like comprehensive congestion pricing.”

As New Yorkers prepare for the 15-month closure of the L train, Lyft’s Vice President of Public Policy Joseph Okpaku said that the effects of the cap — less service, increased wait times, higher fares — will hurt the bottom lines of North Brooklyn businesses and “strand commuters in neighborhoods like Brownsville, Canarsie, and East New York who seek to move throughout the borough and into Manhattan.”

According to Lyft, 78% of its trips either start or end outside of Manhattan’s Central Business District, and 64% of rides take place during non-peak hours, when there are few transit options available. 

"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," Okpaku said in repsonse to the legislation's passing.

New York City-based ridesharing group Via called the cap “counterproductive.”

“Forcing pooled services like Via to provide shared rides in the low-capacity sedans that dominate the for-hire vehicle fleet in New York is inefficient and runs counter to the city's goals,” Via said in a statement. “Looking forward, we hope the TLC will use the discretion it was afforded by the Council to recognize the benefits of ride-pooling in high-capacity vehicles and exempt these vehicles, which reduce congestion and lead to the highest driver earnings, from the cap."

In anticipation of the vote, Uber launched a fierce campaign against the legislation, encouraging riders to use the hashtag #DontStrandNYC.

While the bulk of the legislation focuses on the controlling the number of ride-hailing vehicles on the streets, it also allows the city to set a minimum pay rate for drivers, another first for a major U.S. city.

The legislation is awaiting the signature of New York Mayor Bill de Blasio, who had previously voiced his support for it and is expected to sign it.

Originally posted on Auto Rental News