Lines Being Drawn in the Battle Between NYC and Rideshare Companies

Lines Being Drawn in the Battle Between NYC and Rideshare Companies

The legal saga surrounding ridesharing companies continues as New York City becomes the first of its kind in the U.S. to halt new vehicle licenses for ride-hail app services such as Uber and Lyft, while it sets a minimum wage. The legislation, passed with virtually no opposition by the City Council, caps the number of for-hire vehicles for a year, giving the city time to thoroughly study this booming industry and create more permanent ordinances.

The council hopes this temporary move to restrict the number of ride-hail vehicles and to establish new pay rules – another recent step no other major city has taken – could provide a model for other municipal governments that want to rein in the industry. The only other such measure taken by any major city in the world to toughen ride-hailing service rules was in London earlier in 2018.

“No longer will the city of New York stand idly by while unfettered growth in the for-hire sector causes ever worsening traffic congestion, ever rising environmental degrading, and ever deepening human suffering,” said Ritchie Torres, an NYC council member representing the central Bronx.

Since establishing service in the city in 2011, the New York City market is particularly crucial to Uber and its other ride-hailing companion firms as the city is the now largest and most mature for-hire U.S. market. In May 2018, 18 million app-based rides were recorded by all ride-hailers, according to the NYC Taxi and Limousine Commission (NYCTLC), which regulates professional drivers in the city. That May 2018 figure eclipses May 2015’s almost three million rides six times over.

And yet, concerns about Uber’s growth (and that of ride hailing in general), their work cultures and how they do business have renewed focus on app-oriented ride services and how they impact the communities in which they operate – for both good and bad.

To get a sense of how significant that change is, consider this data from the NYCTLC. If Uber recognized its drivers as employees, as opposed to independent contractors, it would be the largest private employer in the largest city of the country with the world’s largest economy.

New York City lawmakers tried – and failed – to pass similar laws in 2015 that would have regulated ride-hailing company expansion, largely due to Uber’s campaign to quash Mayor Bill de Blasio’s and the City Council’s proposed regulations.

It is certain that Uber and its ride-hailing companions will not accept these new government restrictions without another fight. All are pitted against city government and taxicab medallion companies who have lost tremendous market share since app-based ride services arrived in the city.

Uber is warning its riders that the cap could bring higher prices and longer passenger wait times if it cannot keep up with growing demand. Ride-hail apps have become a reliable alternative to growing service delays within the city’s sometimes unreliable subway system. And part of ride-app growth is in neighborhoods outside of Manhattan, where subways cannot reach, and bus service does not approach the frequency of ride-hailing companies.

But the CEO of CB Insights, a software company which analyzes business technology trends, said the cap could impact any public stock offerings Uber may be considering if revenues are significantly reduced. It could also embolden other cities to take similar actions, which could further devalue any ride-hailing firm’s future IPO.

While the battle against ride-share companies and New York City continues, those who use the app and share the roads with on-demand drivers wish most of all for these services to be safe.

If you’ve been injured in a crash involving a ride-share vehicle, contact Kaplan Lawyers PC to learn more about filing a personal injury claim. We offer free consultations and earn no fee unless we win your case

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