Early on 8th of Aug, the ride-hailing service providers like, Uber Technologies, Lyft found themselves in the eyes of the storm. This time, it is New York City that has hit the brakes over the growth of the app-based ride-sharing companies.
The City Council has voted to halt new vehicle licenses for ride-hail services. The lawmakers have approved the proposal to freeze the new licenses for car service drivers for one year. By doing this, New York has become the first city in the US to impose such a restriction.
Along with the cap, another bill would require ride-hailing companies to provide data on usage and charges or face a fine $10,000 for noncompliance. Geographic restrictions and a $15 minimum wage for ride-share drivers were also approved.
New York’s Mayor Bill de Blasio tweeted saying he would sign the bills into law, “Our city is directly confronting a crisis that is driving working New Yorkers into poverty and our streets into gridlock. The unchecked growth of app-based for-hire vehicle companies has demanded action – and now we have it.”
In addition to this, the legislation passed will even set minimum pay levels for the cab drivers and minimum fares. These factors are currently only regulated for the traditional cabs. In a statement to CBS News, Uber said that the decision will “Threaten one of the few reliable transportation options while doing nothing to fix the subways or ease congestion.”
Joseph Okpaku, vice president of public policy at Lyft, was more heat than light over the City Council. Following the vote, he said in a statement, “These sweeping cuts to transportation will bring New Yorkers back to an era of struggling to get a ride, particularly for communities of color and in the outer boroughs. We will never stop working to ensure New Yorkers have access to reliable and affordable transportation in every borough.”
On the other hand, the New York Taxi Workers Alliance are on cloud nine. Having a whale of the time, Bhairavi Desai, executive director of the NYTWA, said in a statement, “This victory belongs to yellow cab, green cab, livery, black car, Uber and Lyft drivers who united together in our union to transform our shared struggle and heartbreak into hope and strength. And this victory belongs to New Yorkers and our allies who have stood with us to say, not one more death, not one more fallen driver crushed by poverty and despair.” NYTWA has pushed hard for the freeze as the taxi industry has been long decimated by Uber’s rise. As per reports, the price of a taxi medallion has plunged from more than $1 million to less than $200,000.
The industry experts are saying that a cap on new licence would reverse the progress of the app-based services to the neighborhoods that are poorly served by traditional taxis. However, the cap is definitely in the favor of traditional taxi services that were affected by the tech companies like Uber and Lyft.