Last week, the New York City Council voted 39-6 to approve a temporary cap on ride hailing companies, including Uber, Lyft, and Via, within city limits. The bill will limit growth on the number of for-hire vehicles for a year while it studies the impact of the booming industry. The bill also calls for the city to set minimum pay rates for drivers and waive the license fee for wheelchair-accessible vehicles.
While only temporary, the cap is still seen as a sign of trouble ahead of ride hailing companies, which are increasingly facing government regulation and suffering from public image issues. Experts believe that other cities may use New York as model to draft their own legislation.
It's the first major America city to enact such laws inhibiting the transportation services these companies provide, and a major setback for Uber in particular, since New York is its largest market in the US. The news comes as Uber prepares for an IPO in the coming year.
The past year has been difficult for the ride sharing business generally. Uber in particular has had to overcome a negative public image - partly the legacy of its founder and former CEO, Travis Kalanick, but compounded by scandals involving corporate employees, poor treatment and low wages for the drivers it contracts with, and stories about the human tolls of ride sharing's industry disruption. More metropolitan areas are questioning ride sharing's environmental impact and affect on traffic patterns.
Mayor Bill De Blasio commented that, "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."
Though the cap is limited, ride sharing companies view it as an attack on the company and public, warning that such a move "could produce higher prices and longer wait times for passengers if the company cannot keep up with the growing demand."
According to The New York Times, Uber criticized the Council's decision to approve the cap, saying, "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."
Several New Yorkers have welcomed the company as an alternative to the oft-delayed subway system, costly taxis, and alternative transportation services. Uber argues that such a cap could make ride hailing difficult across all parts of the city, especially less dense areas.
Still, ride sharing companies do have downsides, particularly for professional taxi drivers, who have seen their profits dwindle. And many professional drivers for Uber are supportive of the measure, embracing the opportunity to make more trips and improve their earnings with this piece of legislation.