Uber sues New York City over capping of ride-hailing licenses

by Samuel Abasi Posted on February 16th, 2019

Uber sued New York City over over its policy of capping new licenses awarded to drivers of ride-hailing services six months after the City Council enacted a yearlong ordinance designed to reduce congestion and assist taxi drivers.

On Friday, the ride-hailing company filed a lawsuit in a New York state court, saying the ordinance is anti-competitive and exceeds the city’s authority.

“Rather than rely on alternatives supported by transportation experts and economists, the city chose to significantly restrict service, growth and competition by the for-hire vehicle industry, which will have a disproportionate impact on residents outside of Manhattan who have long been underserved by yellow taxis and mass transit,” Uber’s lawsuit says.

In August, New York City limited the number of ride-sharing vehicles allowed on its roads and requires the companies to pay their drivers a minimum wage.

Nearly 106,000 for-hire vehicles, including limousines and ride-hail vehicles, are licensed to operate in New York City. This is up 60 percent from 2016.

“No legal challenge changes the fact that Uber made congestion on our roads worse and paid their drivers less than a living wage,” Seth Stein, a spokesman for New York City Mayor Bill de Blasio, said in a statement. “The city’s new laws aim to change that.”

Uber says there are other ways to reduce congestion in the city.

“We agree that fighting congestion is a priority, which is why we support the state’s vision for congestion pricing, the only evidence-based plan to reduce traffic and fund mass transit,” Uber spokesperson Harry Hartfield said in a statement to Wired.

Instead, Uber said the cap would extend wait times and accessibility, especially in minority communities in the city’s outer boroughs.

The city Taxi and Limousine Commission has said it can lift the moratorium in specific neighborhoods if it observes longer wait times.

The New York Taxi Workers Alliances backs the cap on ride-hailing licenses.

“With more than 80,000 Uber cars on our roads, no driver can get enough fares to feed our families,” the alliance said the statement. “Uber created this crisis of congestion on our streets. Uber caused this crisis of plummeting incomes for all drivers. And Uber is worsening the MTA crisis, siphoning income away from public transit by subsidizing its passenger fares.”

The alliance added the limit will help Uber drivers.

“Uber drivers and yellow cab drivers from across the city united to win the historic cap on for-hire-vehicles — to put an end to the financial despair, debt, and poverty that is literally killing our brothers,” the alliance said.

In January, the city began charging a $2.75 “congestion fee” on each app-hailed trip passing through Manhattan’s business district.

And this month, the city’s Taxi and Limousine Commission implemented a law it says will guarantee ride-hail drivers a minimum wage. Lyft and Juno sued to halt those rules.

Congestion pricing has been implemented in London, Milan and Singapore.

New York Gov. Andrew Cuomo wants to raise tolls on all drivers entering midtown and downtown Manhattan.

Also Friday, the company reported an adjusted loss of $1.8 billion for 2018 and a slowdown in quarterly sales growth as it prepares for an initial public offering. Last year it reported $2.2 billion in losses.

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Samuel Abasi

Samuel Abasi

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