New York Caps Number of Uber and Lyft Vehicles with Plans to Increase Drivers' Pay

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New York Caps Number of Uber and Lyft Vehicles with Plans to Increase Drivers' Pay

On Wednesday, New York became the first major U.S. city to put a cap on the number of ride-sharing vehicles allowed to operate in the city. The New York City Council voted overwhelmingly in favor of the cap, which delivered a major blow to companies like Uber and Lyft, but was hailed as a victory for drivers.

The bill will help the ever-worsening traffic problem in New York City by capping the number of for-hire vehicles for a year while also allowing New York to set a minimum pay rate for drivers. During that year, the city will conduct a survey to examine the impact of for-hire vehicles. Mayor Bill de Blasio has expressed his support for the cap and is expected to sign the bill into law.

De Blasio and City Council speaker Corey Johnson said the bill will reduce traffic and increase drivers’ low wages. De Blasio said, “More than 100,000 workers and their families will see an immediate benefit from this legislation. And this action will stop the influx of cars contributing to the congestion grinding our streets to a halt.” Johnson said, “We are pausing the issuance of new licenses in an industry that has been allowed to proliferate without any appropriate check or regulation.”

This bill was considered a major win for drivers after reports revealed most Uber and Lyft drivers aren’t paid fairly. 74 percent of drivers make less than minimum wage in their state and 30 percent actually lose money while driving, while the Center for Automatic Research at Stanford revealed that drivers only make $3.37 an hour.

Recently, there have been growing concerns over both for-hire and taxi drivers’ financial turmoil after six New York City taxi drivers committed suicide in the past few months. The taxi drivers reportedly faced financial hardships after companies like Uber and Lyft came to town. On Wednesday, New York drivers rallied together outside of City Hall before the vote, holding signs that listed the names of drivers who recently committed suicide.

The Independent Drivers Guild executive director Ryan Price said:

It’s not easy taking on Silicon Valley behemoths, but we kept on fighting for what we know is right and today the workers prevailed. We are thankful to the New York City officials who listened to the stories of drivers who are struggling to support their families and stood by us in this fight.

However, Uber and Lyft aren’t as pleased with the bill. Uber spokesman Josh Gold said the cap “will threaten one of the few reliable transportation options while doing nothing to fix the subways or ease congestion.” Lyft vice president of public policy Joseph Okpaku released a similar statement, arguing that the cap “will bring New Yorkers back to an era of struggling to get a ride, particularly for communities of color and in the outer boroughs.” Uber also argued that yellow taxi companies racially discriminate in their latest major advertising campaign against taxi companies.

Following the vote to pass the bill, Uber said they would work to keep up with the growing popularity of their company, even if there is a new limit on their vehicles. Uber also pledged to reach out to taxi drivers that already have licenses and recruit them to drive for Uber in order to help with the financial turmoil their company has caused. However, if driving for Uber only earns you $3.75 an hour, that option isn’t much better for a New York City taxi driver. The company went on to say they would urge New York to implement congestion pricing that would institute tolls for drivers who enter the city’s busiest neighborhoods. This would ultimately take more money away from the drivers who are already paid less than minimum wage, and it would also require approval from state lawmakers.