With a Heavy Hand, New York City Regulates Uber

New York City became the first city in America to put a cap on the number of vehicles used by ride-hailing services last month. The move by City Council is part of a broader regulatory scheme meant to address a range of issues concerning ride-hailing services including their effect on medallion prices, driver wages and benefits, and limited access for New Yorkers with disabilities. Uber, Lyft, and Via – the three most prominent ride-hailing services in the five boroughs – decried the regulation and said that their services offered a pivotal service to low-income New Yorkers without access to taxis or the subway, in addition to jobs with flexible schedules.

In addition to capping the number of vehicles used by ride-hailing services at their current level of 100,00, the bill also allows for New York to set a minimum hourly rate for Uber and Lyft drivers. Previously, these drivers were considered independent contractors under the law – not employees – and therefore were not subject to minimum wage laws, among other protections given to employees. According to the City Council and Mayor de Blasio, the new law will put a “pause” on the industry for twelve months while it commissions a study on the effect of ride-hailing services on congestion which the Mayor said contributed to the “congestion grinding our streets to a halt” without citing any evidence.

The Mayor previously tried to curtail Uber and Lyft back in 2015, however, he was met with strong resistance by New Yorkers and dropped the idea. Since then, the public sentiment has turned against the ride-hailing services.  These ride-hailing services, , have endured several notable public missteps – from issues relating to passenger safety to driver wages – and botched their responses. In the past six months, six taxi drivers have committed suicide because of the financial turmoil that Uber and Lyft brought upon their industry. Medallion prices, which are required to drive a cab in the five boroughs, cost less than $200,000 – down from an eye-watering $1 million in just 2010, the year before Uber came to New York.

Unsurprisingly, Uber and Lyft decried the move as harmful to riders, drivers, and especially low-income New Yorkers who they say rely heavily upon their services in areas without adequate public transportation. Drivers for both ride-hailing services and taxis lauded the move by City Council, telling The New York Times that they believe it will allow them to earn more money by decreasing congestion and decreasing competition. New York City residents, who have become accustomed to being picked up quickly by the multitude drivers constantly roaming the streets, only hope the City is not ruining the industry in the same way they have ruined the subway.

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