The New York City Council voted Wednesday to set a cap on the number of ride-hailing vehicles in the city, a move that will see Uber and Lyft’s growth curtailed. No new licenses will be issued for a full year as the city studies the issue further; legislation also allows the city to set a minimum pay rate for drivers, who, as legal contractors, are not subject to federal or state minimum wages.
“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, told the New York Times before the vote.
Uber has blazed the trail for the ride-hailing industry by ignoring local regulations, clashing repeatedly with city governments and often threatening to shut down service in response to legislation. Although a number of cities have tried to shut down Uber and Lyft altogether, or attempted to force the companies to operate exactly the same as taxicabs, this marks the first time a major city has passed legislation that will regulate ride-hailing apps as their own industry.
Uber has campaigned against the legislation, warning riders that a cap on drivers will create higher prices and longer waits for cars. “We take the Speaker at his word that the pause is not intended to reduce service for New Yorkers and we trust that he will hold the TLC accountable, ensuring that no New Yorker is left stranded,” the company said in a statement. “In the meantime, Uber will do whatever it takes to keep up with growing demand and we will not stop working with city and state leaders, including Speaker Johnson, to pass real solutions like comprehensive congestion pricing.”
Mayor Bill de Blasio attempted to pass similar legislation in 2015, but was defeated by a complex counter-campaign from Uber. This time around, he didn’t waste a second issuing a statement praising the legislation, which he is expected to sign. “Our city is directly confronting a crisis that is driving working New Yorkers into poverty and our streets into gridlock,” de Blasio said. “The unchecked growth of app-based for-hire vehicle companies has demanded action—and now we have it.”