NEW YORK (Reuters) – New York City is moving toward becoming the first major U.S. municipality to cap ride-sharing services, sparking a tsunami of protest on Friday from Uber [UBER.UL] and others, which warned that those living in far-flung neighborhoods will suffer most.
The City Council is considering five bills aimed primarily at reducing traffic congestion and increasing driver paychecks in the wake of explosive growth of for-hire vehicles and a rash of suicides among financially challenged yellow taxi drivers.
“We are pausing the issuance of new licenses in an industry that has been operating without checks,” Council Speaker Corey Johnson told reporters on Friday.
The council’s move to vote on the measures as soon as Aug. 8 is the city’s second try to restrain an industry that has grown exponentially since Mayor Bill de Blasio’s failed 2015 attempt to rein it in.
Resurrection of the effort in New York – Uber’s largest U.S. market – outraged ride-hailing businesses, including Uber, Lyft and Via.
In an email barrage to nearly 5 million New Yorkers on Friday, Uber said riders would be hurt most by the squeeze, facing higher prices, longer wait times and less service in the city’s outer reaches by drivers more heavily dependent on higher demand in Manhattan, only adding to, rather than reducing, congestion.
“@NYCCouncil I’m a New Yorker, and I rely on @Uber to get around the city, especially when public transit isn’t available. Don’t leave me stranded and #DontStrandNYC,” tweeted thousands of New Yorkers, some using a link provided in the Uber email.
Since Uber and other app-based services debuted in New York City about five years ago, the industry has grown to more than 100,000 cars, according to the Taxi and Limousine Commission. At the same time, less demand for New York’s iconic yellow cabs has decimated that one-time route to middle-class income.
Six struggling professional drivers – including three yellow cab drivers – have killed themselves in recent months.
The New York Taxi Workers Alliance cheered the City Council’s pledge to move ahead with the bills.
The impending New York City limits come amid a worldwide effort to crack down on ride-hailing companies, including a move by Honolulu’s city council to cap fares charged when demand spikes.
London, in a test of Uber’s new senior management, in June, issued a probationary license to operate as long as Uber can show it has improved on safety and other concerns.