Update | 07.22.2015 | 6:50pm CT
The NYC City Council has dropped the proposed legislation and struck a deal with Uber Wednesday afternoon. The city will move forward with the traffic study, which Uber will contribute previously withheld data to. According to a statement from Deputy Mayor Anthony Shorris, the popular ride-hailing company “has also agreed to maintain its approximate current rate of growth and not flood the streets with new licenses and vehicles.” The proposed cap will be “tabled throughout the traffic study process”.
It’s a big win for Uber, but most notably for public sentiment and popular resistance. Not only did the company mobilize a clever ad-campaign, but citizens and celebrities alike spoke out because they value the service Uber provides. Mayor de Blasio warned Uber not to “dictate to government” and was in turn reminded that, in a democracy, the government does not dictate to the People, either. Considering the taxi industry had given $500,000 to de Blasio’s mayoral campaign and another $150,000 to city council members, this is a victory for the future.
The Committee for Taxi Safety, an industry group composed of New York City taxi reps, proposed a cap on the number of new for-hire vehicles in the city a few months back. The cap is aimed squarely at Uber and other app-based ride-hailing companies which are quickly outpacing the taxi industry. Last month, the NYC city council introduced legislation mirroring the CTS proposal. Here’s what you need to know.
NYC Council Bills 842 and 847
Council bill 842 entails a 1% growth cap on new for-hire vehicles for one year. Bill 847 provides for a study the impact of ride-hailing services on traffic and congestion in the city. Council member Stephen Levin, who introduced the legislation, spoke to Reason’s Stephanie Slade:
“New licenses for for-hire vehicles are being issued, right now, left unchecked, at 2,000 a month. And there are environmental impacts to that, because you have 25,000 new cars on the road that are driving around all the time. There is an impact to congestion, which slows down city buses, for example…There could be health impacts, potentially, with asthma rates. Regardless, it’s something that needs to be studied.”
In the same interview, Levin, who acknowledges backlash from his constituency, claims that there is “no scarcity of options” for for-hire vehicles in NYC. When Slade countered by asking why livery companies are adding 2,000 cars per month if there is “no scarcity of options”, Levin fumbled:
“Um…because…I mean, I don’t know. I think that’s one thing the study can look at.”
Uber has responded strongly to the proposed cap, claiming it would “destroy 10,000 jobs” and installing a new feature on its app: the De Blasio option, which increases your wait time significantly. Facing heavy backlash, the city has shifted its narrative:
“New Yorkers deserve a real examination of whether Uber drivers are treated fairly; whether customers are protected against discrimination; whether Uber and other for-hire services will provide accessibility for the disabled, which they don’t do reliably today; and whether New York City streets will become even more clogged as tens of thousands of more vehicles enter the market.”
Originally about traffic congestion, health and environmental impacts, the claimed purpose now is something New York City is well-versed in: regulatory oversight.
Uber experienced in fighting NYC
The proposed cap is far from the first time the young company has clashed with Empire City regulators. In September of 2012, Uber launched UberTaxi, a collaborative effort with yellow cab drivers in the city, which was promptly shut down by the Taxi and Limousine Commission (TLC).
More recently, the Big City has clamped down on Uber drivers who perform illegal street-hails. For-hire vehicle services are only allowed to do pre-arranged trips, whether through an internet app or a dispatching station. Between April 29 and June 15, the city seized 496 cars affiliated with Uber’s bases for violating the rule.
In May, the TLC proposed new rules on app-based ride services that would require the companies to submit each and every change to their app for approval, in addition to paying a $1,000 fee for the introduction of new apps. Opposition was mobilized quickly and forcefully in the form of a May 14 letter from the Internet Association to NYC Mayor Bill de Blasio, condemning the proposal that, they say, “risks undermining New York’s progress and status as a global leader.” Signed by tech giants such as Facebook, Google, Twitter, Yelp and several others, the letter picked up steam and, with the help of protests from Uber and Lyft, the TLC proposal was dropped last month. The new rules instead require only notification of app modifications, not approval of the changes.
Vote on legislation nears, gloves come off
In an editorial for the New York Daily News last week, Mayor de Blasio laid out his reasons for supporting the 1% cap on for-hire car services. Contradicting (again) the originally reported reason for the one-year cap (a traffic and congestion study), de Blasio criticized Uber’s marketing tactics in the city and demanded more oversight to protect workers and riders, derided the companies’ price-surge model and mentioned the congestion issues as a footnote. UberNYC General Manager Josh Mohrer penned a letter on Monday, responding to de Blasio’s op-ed point-by-point and inviting him to participate in a live-streamed debate. de Blasio, who received over $500,000 from the taxi industry during his 2013 mayoral campaign, declined the open invitation, warning the tech company that “people will reject” the ride-hailing service if it continues to “dictate to government”.
NYC Councilman Ydanis Rodriguez, who co-introduced the legislation, tweeted yesterday morning that if Uber drivers get into an accident, there is no insurance coverage involved. This claim is patently false, as the TLC requires every Uber driver to maintain commercial liability coverage of $200,000 per person and $100,000 minimum liability. After he was called out by Uber’s Josh Mohrer, Rodriguez deleted the tweet and reposted it, having added a link to an obscure investment blog article that worries Uber’s valuation is too high.
A vote on the bills could come as early as Thursday; check back for updates.
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