New York Could Become First Major U.S. City to Cap Uber and Similar Vehicles
 |
| New York City to Cap Uber and Lyft |
 |
| We can't take it anymore - CAP UBER AND LYFT - Demonstrators in the New York City demanding enforcement to Limit Uber and Lyft drivers in New york City. |
After
New York City and Amazon went to war over a new campus in Queens, the
city is heading into battle with another tech giant: Uber.
Mayor Bill de Blasio approved a yearlong cap on Uber vehicles last
summer, making New York the first major American city to rein in the
booming ride-hail company. Now Mr. de Blasio wants to extend the cap,
prompting Uber to sue the city last week to overturn the law.
Uber
has fiercely opposed the cap, arguing that it hurts New Yorkers who
rely on the app, especially outside Manhattan where there are fewer
transit options. The lawsuit called the city’s regulatory approach
“unfortunate, irresponsible and irrational.”
Mr.
de Blasio, a Democrat with presidential ambitions, responded by saying
the city’s new rules — both the cap and a measure to raise wages for
drivers — were needed.
“No
legal challenge changes the fact that Uber made congestion on our roads
worse and paid their drivers less than a living wage,” said Seth Stein, a
spokesman for the mayor. “The city’s new laws aim to change that.”
Like
many other cities across the world, New York is struggling to respond
to the explosive growth of the ride-hailing industry. The influx of
vehicles has raised concerns about street congestion, working conditions
for drivers, the decimation of the yellow cab industry and the
siphoning of riders from public transit.
The
lawsuit comes at a critical moment for Uber and its main competitor,
Lyft, as both companies rush to go public. Uber, which could be valued
as high as $120 billion, is likely to be one of the biggest-ever public offerings by a tech company.
The two ride-hail companies have bristled over new regulations in New York, Uber’s largest market in the United States. Lyft recently sued to stop the rules aimed at raising driver pay.
Uber and Lyft are also battling each other to dominate New York’s thriving bike markets. Lyft bought Motivate, the company that operates CitiBike, the city’s popular bike-share program. Uber bought another bike company called Jump and began offering electric bikes in the Bronx and Staten Island.
Uber supports the driver pay rules, but argued that the cap hurts drivers who want to join its app.
“It
is disappointing to see the de Blasio administration remain singularly
focused on a cap that evidence suggests is doing nothing to relieve
congestion while preventing thousands of New Yorkers from earning a
living wage,” Josh Gold, a spokesman for Uber, said in a statement.
Some business leaders worry that Amazon’s decision to abandon its deal with New York could hurt the city’s image as a tech hub.
But
Nicole Gelinas, a senior fellow at the Manhattan Institute, said the
struggle with Uber is not a tech issue — it’s about worsening street
traffic.
“We’re not really
afraid of being branded anti-tech,” Ms. Gelinas said. “In the long term,
our problem is how do we deal with all of this growth — and not the
risk that we’re going to drive away that growth with a little bit of
rhetoric and a little regulation.”
Mr.
de Blasio has a bitter history with Uber. When the mayor first proposed
a cap in 2015, Uber launched an aggressive attack, introducing a “de
Blasio view” in the company’s app to blame him for long wait times. Uber
won the debate and became shorthand in his administration for an embarrassing defeat.
But
Uber was on the defensive last year when the cap idea was revived by
Corey Johnson, the City Council speaker. Uber’s reputation had been
harmed by accusations of gender discrimination and other scandals. It
hired a new chief executive and a new leader for New Yorkto try to improve its image.
The
number of for-hire vehicles in the city has surged to more than 100,000
vehicles, from about 60,000 in 2015. But while Uber and other companies
are flourishing, many of their drivers are not. About 40 percent of
drivers have incomes so low that they qualify for Medicaid and about 18
percent qualify for food stamps, according to a study by prominent economists last year.
 |
| Rideshare apps saturatings streets all over nation - Uber and Lyft is the biggest problem of traffic all over USA. |
The
cap was expected to last a year while the city studied the
proliferation of ride-hail trips. At the end of that period, the city’s
taxi commission would review the number of vehicle licenses and decide
on how they would be regulated.
Last month, Mr. de Blasio said in a radio interview that
he wanted to “put ongoing caps in place on the for-hire vehicles.”
Officials at City Hall confirmed that the mayor was considering
extending the cap.
Uber’s
lawsuit argues that it was not legal for the city to delegate the power
to cap vehicles to the taxi commission. If Uber cannot meet growing
rider demand, the lawsuit says that could hurt the state’s efforts to
raise money for the subway through new fees on ride-hail trips.
The
lawsuit, filed in state supreme court in Manhattan, questions the
city’s motives: “This is less a ‘study’ and more a ‘post hoc
rationalization’ of a remedy the city appears to have already selected.”
Lyft
also opposes a permanent cap. “Any extension of this misguided policy
would do even more significant, long-term damage to drivers and riders,”
Lyft said in a statement.
The
City Council is proud of the new regulations imposed on the ride-hailing
industry and had the authority to approve them, said Jacob Tugendrajch,
a spokesman for Mr. Johnson. The speaker, his office said, wants the
taxi commission to make a decision about any future limits on vehicles
based on data from its study.
The
city’s taxi commissioner, Meera Joshi, recently announced that she was
stepping down in March. Her successor will have a powerful role in
determining the industry’s future.
In
a separate lawsuit, Lyft challenged the city’s rules to raise driver
wages to more than $17 an hour. Lyft claims the rules give Uber an
unfair advantage because it judges companies differently based on their
“utilization rate,” or how often drivers have a passenger in their car
versus driving around empty.
The
approach gives “the largest company with the biggest market share a
built-in and perpetual advantage over companies with lower
utilizations,” Lyft’s lawsuit said.
Lyft
has sold itself as the more ethical ride-hail option. But the lawsuit
hurt its image among some riders like Brad Lander, a councilman from
Brooklyn, who said he deleted the app.
After facing harsh criticism, Lyft announced that it would comply with the new pay rules while its legal case proceeded.
Uber
and Lyft say they care about public policy, but the lawsuits show their
first priority is self interest, said Bruce Schaller, a former city
transportation official who has closely studied the industry. The
companies face a difficult challenge of balancing both profits and their
public image. In this case, Mr. Schaller said, Uber chose to protect
its bottom line.
“Uber in
particular has been playing super nice since its change in management a
year ago and particularly as they get closer to the I.P.O.,” he said.
“Suing the biggest city in the country isn’t playing super nice.”
Reference;
Comments
Post a Comment