30 Jul New York could become first Major US city to cap Uber

The battle between traditional private hire and yellow cabs and Uber has opened up on a new front as New York City officials discuss capping the number of vehicles.

The move, reported in the New York Times, is set to address mounting concerns that the huge growth in Uber cars and other ride hailing firms has led to worsening congestion and pushed down average wages in the industry.

The legislation, which is supported by City Council speak Corey Johnson, would make New York the first major American city to set a limit on ride-hailing vehicles. Under the proposals, there would be a pause in the issuing of new for-hire vehicles except ones that are wheelchair accessible. During the licensing hiatus, a year long study of the industry would be undertaken.

The City’s Mayor, Bill de Blasio, has stopped short of endorsing the proposal, but has suggested that measures need to be taken to rein in the industry. His support would not be unexpected, however, given his attempts in 2015 to cap the number of vehicles Uber has in New York City. Since then the number of cars licensed to operate has rocketed to more than 100,000 from about 63,000 according to official figures. During this time there have also been six suicides by professional drivers, three of them taxi drivers.

New York may be the first major US city to try to cap vehicles in order to stop the freefall of wages due to over supply but it is not the first place to try to use legislation. Transport for London ended up in court over their decision not to renew Uber’s operator license, claiming it was not a ‘fit and proper’ company. But last month Westminster Magistrates Court agreed with the company that it had reformed and it was granted a 15 month operator license, with the industry anticipating that this will be extended and Uber will be set to dominate London when the new operator license fees are imposed which will give it a huge financial advantage over other firms.

Included in the proposals would be requests for minimum pay rules for app drivers, which would make New York the first major American city to establish minimum pay for drivers. Mr. Johnson, a Democrat who became City Council speaker in January, said that it was clear that something needed to be done to grapple with the disruption in the taxi and for-hire vehicle industry.

“This is the plan that we came up with and in my heart I believe it’s the best path forward,” Mr. Johnson said in a statement. “Our goal has always been to protect drivers, bring fairness to the industry and reduce congestion. 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.”

Unsurprisingly, the proposals were blasted by Uber who said the legislation would hurt consumers.

“The City Council’s Uber cap will leave New Yorkers stranded while doing nothing to prevent congestion, fix the subways and help struggling taxi medallion owners,” said Josh Gold, a spokesman for Uber. “The Council’s cap will hurt riders outside Manhattan who have come to rely on Uber because their communities have long been ignored by yellow taxis and do not have reliable access to public transit.”

Part of their response was an advert released on Thursday which focused on the problems people outside the centre of the city have in getting a taxi, showing vehicles disappearing. “If the New York City Council gets its way, all of this could disappear,” the ad says. They have also introduced a feature on their app, known as ‘de Blasio view’ which it says would show the expected wait time should the Mayor get his way.

Fareed Baloch from Zoom.taxi said the idea “may help to stop the eradication of all non-Uber private hire vehicles from the City”.

“There has been a ‘race to the bottom’ in wages brought about by a surge in the number of Uber cars and this is not good for the long term health of the industry – in New York or anywhere else.

“Drivers have no objection to technology – our customers come to us to improve their digital processes and ensure they have the technology that their customers are demanding now and Uber certainly provided a kick up the backside for cars who were not embracing digital. But what they do object to is predatory pricing models designed to force competitors out of the market so they can hold a dominating position and control prices and wages.

“Uber drivers have benefited from being ‘self employed’ thus able to charge 20% less than drivers from small businesses, just as the company is registered for tax in The Netherlands.

“London has become the Wild West of the gig economy and giving power to the multinationals with their friends in government will not help the drivers or the passengers.”