The New York City Council on Wednesday agreed to cap the number of licenses for ride-hailing services such as Uber Technologies Inc for one year, dealing a blow to the companies that have relied on the largest USA metro area for a major source of their revenue.
"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".
Mayor Bill de Blasio and Corey Johnson, the City Council speaker, say the bill will help cut down on the amount of congestion on the streets of NY.
The City Council voted Wednesday on a package of bills that includes a one-year moratorium on new licenses for for-hire vehicles while the city studies the rapidly changing industry. Those wage concerns aren't limited to taxi drivers, though - in fact, the New York Times reports that almost 40 percent of the city's ride-hailing drivers qualify for Medicaid because their take-home wages are that low.
The legislation also allows the city to set a minimum pay rate for drivers and minimum fares for the industry.
Gold said the outstanding 40,000 licenses belong to black auto and livery drivers, workers Uber will aim to recruit.
This cap is the first of its kind in the country, and if it proves successful in addressing issues related to ride hailing, other cities could follow suit. The drop in incomes has demoralized many drivers and the New York Taxi Workers Alliance said there have been six suicides among cab and livery drivers in recent months.
New Yorkers who regularly rely on Uber, Lyft and other ride-hailing services to travel around the city's five boroughs may find the apps less convenient in the next year.
The cap has two carve-outs: There's no limit on new wheelchair-accessible vehicles, and neighborhoods that can show they are under-served could get added cars.
"We hope this is the start of a more fair industry not only here in New York City, but all over the world", the labor group's founder, Jim Conigliaro Jr., said in a statement. Officials have pushed for congestion-based pricing and measures such as ride-hailing revenue taxes - that aim to capitalize on the growth of ride-hailing to supplement public transit.
Uber and Lyft contend they reduce users' dependence on private vehicles and complement public transit.