New York City Goes After Uber and Lyft

When you get behind the wheel of your car, or clamber into a Lyft, or squeeze onto a bus, your commuting choice feels specific to you and your needs. But taken together, all these personal decisions influence cities' transportation systems, and how they work to move the masses. Then, when you layer in how transit options have exploded—ride-share, car-share, bike-share, scooter-share—it’s no wonder cities are grappling with what all those personal choices mean for our public streets, writ large. And trying to figure out what to do about it.

So it is notable that today, New York City became the first US city to pass legislation capping the number of ride-hail vehicles on its roads.

“No longer will the city of New York stand by idly while unfettered growth in the for-hire sector causes ever worsening traffic congestion, ever rising environmental degrading, and ever deepening human suffering,” Ritchie Torres, a council member representing the central Bronx, said before voting for the legislation.

For Uber and Lyft, the loss at the council today is a shift in fortunes—but one that’s been a long time coming. Much has changed since ride-hail companies injected themselves into American transportation systems in the early 2010’s. At the the start, the companies revolutionized personal transit, allowing users to quickly call a car, or drivers to get into the gig economy. Regulators and city councils might have been frustrated by the startups' “launch first, ask questions later” approach, but often lacked the authority to do much about it—or the political capital to try.

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Now, after years of scandal, bad press, and mounting reports that they are making traffic worse, the companies seem more ready to make concessions. And cities are finding new ways to assert their authority.

The package of bills New York’s city council passed today freezes the number of licenses available to for-hire vehicles for up to one year, effectively capping the number of ride-hail cars on the road, currently around 100,000. (About two-thirds of those vehicles are associated with Uber, though the city’s “for-hire” category also includes Lyft, Gett, Juno, car services, and black car operators.) During the one-year freeze, the city will commission a study on how to best regulate the services to promote equitable transportation options and wages for residents.

There are a few exceptions: New permits for wheelchair-accessible for-hire vehicles will still be available. Plus, the city’s Taxi and Limousine Commission will have the power to lift the moratorium in specific areas, should quality of service deteriorate—though the exact mechanism for doing so is not yet clear.

The package also sets a minimum wage for ride-hail drivers to around $17, a level that economists say represents a living wage. And it establishes a new kind of license for big ride-hail companies, which will demand they submit detailed revenue and trip data or face a $10,000 per day fine.

This is not ride-hail’s first tangle in the Big Apple. Back in 2015, Uber successfully fought off New York City’s attempt to cap the vehicles operating in the city by launching an all-out public war. It urged users to contact their local politicians and raised support among civil rights groups, who said the company had filled a gap for underserved communities that taxis and the city’s public transit system had refused to fill. (It also memorably trolled the city’s mayor with an in-app “De Blasio mode”, which showed 25-minute wait times.)

This year, though, the ride-hail company ground game—in-app messages, calls to customers, TV ads—fell short. For many council members, a recent spate of suicides among taxi and livery drivers seemed front of mind. (Some of those drivers’ families attended the meeting to watch the vote.) And while many were concerned that the regulations might limit service for outer borough residents, they seemed convinced that the Taxi and Limousine Commission’s power to lift the limits would obviate equity concerns.

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And council members were worried about the roads. Recent studies—one out just this past month—suggest even ride-hail companies’ pooled services, like Uber Pool and Lyft Shared, are pulling passengers from public transit and putting more cars onto the road, worsening the city’s already choking traffic.

Indeed, New York isn’t only city trying to regulate its ride-share market. Chicago hiked its per-ride fees on ride-hailing vehicles earlier this year. Honolulu, Hawaii, attempted to put a cap on ride-hail surge pricing in June. (The effort was vetoed by the mayor.)1 Washington, DC’s city council voted to raise its taxes on ride-hail companies earlier this summer. And London threatened to take away Uber’s operating license, forcing the company to up its safety features and admit it had made mistakes in the past.

San Francisco, meanwhile, is agitating for the power to regulate the number of ride-hail vehicles on its own street. Tom Maguire, the San Francisco Municipal Transportation Agency’s director of sustainable streets, says his agency is concerned with reports suggesting that ride-hailing services are moving riders off mass transit and clogging up roads. Right now, though, the authority to do anything about it sits with the California Public Utilities Commission, a state-level agency.

“I’m hoping that the experience in New York will show a model to the state that there’s a way for cities to be responsible partners in the regulation of transportation network companies [like Uber and Lyft],” Maguire said late last month, prior to today’s vote.

Lyft says it’s not concerned that New York’s regulations will spread to other cities, arguing its classification of ride-hail vehicles as “for-hire vehicles” gives the city authority that other municipalities lack. “It really is apples to oranges,” says Joseph Okpaku, Lyft’s vice president for public policy. Uber, too, argued the New York City market is distinct.

Both companies also warned the new regulations would reduce service for New Yorkers. “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,” an Uber spokesperson said in a statement.

A part of that may be true, transportation experts say. About 2.7 million vehicles enter New York City every day, and it’s doubtful that limiting the supply of ride-hail cars alone will clear the roads and air. “There’s still a ton of private cars that are clogging up the streets,” says Jon Orcutt, director of communications at the research and advocacy group TransitCenter. Sure, the city failed to pass a congestion charge earlier this year. But its attitude toward one kind of sweeping transportation regulation can changed pretty quickly. Who knows what could next.

1 Story updated, 8/10/18, 12:50 pm EDT: This story has been updated with information on Honolulu's surge pricing cap.

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