Economy & Business

New York Cracks Down on Ride-Sharing Services, Caps Number of Drivers

The New York City council voted on Wednesday to stop granting new vehicle licenses for ride-sharing companies such as Uber and Lyft for one year while researchers examine the industry’s economic impact.

The legislation, which also establishes pay guidelines for drivers, is the most restrictive of its kind implemented by any American city and, according to Uber, is sure to negatively affect New Yorkers by driving up prices and increasing wait times.

City officials, however, have argued that the legislation was a necessary step in reining in an industry that has decimated the yellow-cab market and led to greater congestion, all while exploiting drivers.

“We are pausing the issuance of new licenses in an industry that has been allowed to proliferate without any appropriate check or regulation,” Corey Johnson, the city council speaker, said ahead of the vote on Wednesday

Mayor Bill de Blasio celebrated the legislation as a boon to impoverished drivers. “More than 100,000 workers and their families will see an immediate benefit from this legislation,” de Blasio said, referring to New York’s ride-sharing drivers, who comprise the largest market in the U.S. “And this action will stop the influx of cars contributing to the congestion grinding our streets to a halt.”

The issue of driver pay has been forced to the forefront of the debate surrounding the importance of regulating giant ride-sharing services, as a growing number of drivers, unable to make ends meet, have committed suicide in recent months.

Uber, however, focused on the city’s varied transportation issues, presenting the ride-sharing service as the only reliable way to traverse the city.

“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,” Josh Gold, a spokesman for Uber, said in a statement. The company plans to reach out to licensed drivers currently working for other car services to continue to expand their ranks while prospective drivers are unable to secure new licenses.

Lyft, Uber’s top competitor, argued that the legislation will disproportionately harm people of color who live in communities that are not frequented by yellow cabs.

“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,” Joseph Okpaku, a vice president at Lyft, said in a statement.

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