New York's city council dealt a blow to Uber and other car-for-hire companies, passing a bill to cap the number of vehicles they operate and impose minimum pay standards on drivers. It makes New York the first major US city to limit the number of app-based rides and to impose pay rules, with authorities under pressure to act over pollution and worsening congestion.
The financial capital of 8.5 million is the biggest app-ride market in the United States, where public transport woes and astronomical parking costs have helped fuel years of untamed growth by the likes of Lyft and Uber. But that growth has brought New York's iconic yellow cabs to their knees and since December, six yellow-cab drivers have committed suicide.
Those deaths have been linked to desperation over plummeting income. The increased competition has slashed the value of yellow cab taxi licenses from more than $1 million in 2014 to less than $200,000 today. The bill stipulates a 12-month cap on all new for-hire-vehicle licenses, unless they are wheelchair accessible, as well as minimum pay requirements for app drivers -- regulated by the Taxi and Limousine Commission.
The TLC, which regulates taxis and is a powerful force in New York politics, commissioned a study recently in a bid to underscore the chaos and push city authorities into taking action. That report recommended a guaranteed income of $17.22 an hour for drivers -- the city's $15 minimum wage is due to come into effect at the end of 2018 -- plus a supplement to mitigate against rest time.
Uber hit back Wednesday, saying the 12-month pause would threaten one of the city's "few reliable transportation options" -- a swipe at a burgeoning subway crisis -- "while doing nothing to fix the subways or ease congestion." The spokesperson also said, "Uber will do whatever it takes to keep up with growing demand and we will not stop working with city and state leaders... to pass real solutions like comprehensive congestion pricing."
New York Mayor Bill de Blasio, a progressive Democrat, vowed to sign the bill into law, claiming that it would "stop the influx of cars contributing to the congestion grinding our streets to a halt." De Blasio also said, "More than 100,000 workers and their families will see an immediate benefit from this legislation."
It comes after the city was forced to shelve plans in 2015 to cap the number of vehicles operated by Uber, after the multibillion-dollar corporation fought tooth and nail against the legislation in a slick ad campaign. The Independent Drivers Guild, which represents more than 65,000 app-based drivers such as those from Lyft and Uber, on Wednesday celebrated.
"Workers and New York leaders made history today. It's not easy taking on Silicon Valley behemoths, but we kept on fighting for what we know is right and today the workers prevailed," said executive director Ryan Price. Most drivers in New York work full time and are often immigrants without higher education. They get into heavy debt to buy their vehicle license and have little other means of generating income.
Around 85 percent earn substantially less than the equivalent of a $15-an-hour minimum wage, according to the TLC-commissioned study. Around 80,000 drivers work for at least one of the big four app-based companies in New York, compared to 13,500 yellow cab drivers, it found.
Last year, London's transport authority stripped Uber of its license over safety concerns, but the corporation appealed the decision and was allowed to continue operating while the case was heard. In June, a British judge overturned the earlier decision and granted the ride-hailing app a 15-month permit.