Uber Sues New York City Over Vehicle Cap

A moratorium on ride-sharing apps will inevitably make it harder for low-income residents to get around.


Erica Schroeder | Dreamstime.com

Uber is taking New York City to court after lawmakers capped the number of cars allowed on the ride-sharing app.

Legislation passed by the New York City Council in August of last year imposed a yearlong pause on new vehicle licenses for Uber and Lyft drivers. Lawmakers who advocated for the restriction said it will help ease congestion. But Uber is pushing back on that, arguing the moratorium will create far more problems than it will solve.

"Rather than rely on alternatives supported by transportation experts and economists, the City chose to significantly restrict service, growth and competition by the for-hire vehicle industry, which will have a disproportionate impact on residents outside of Manhattan who have long been underserved by yellow taxis and mass transit," Uber's lawsuit says.

Mayor Bill de Blasio, who helped champion the restriction, did so under the guise that the yearlong window would allow the city to conduct a "study" on traffic outcomes. But that seems to have been a farce, as he recently told WNYC's Brian Lehrer that the caps will be "ongoing." With that in mind, it's likely the move was in service to a dying taxi industry, which has struggled to compete with Uber and Lyft's low prices and convenience.

The legislation also instituted minimum pay rules for drivers. That's bound to be a problem as well, since ride-sharing companies will deal with it by raising prices, which may discourage riders. And the state's mandated compensation increase is at odds with their vehicle cap, as the latter reduces opportunities for drivers to actually take advantage of any bump in pay.

"The City Council's new law guarantees a living wage for drivers, and the administration should not have blocked New Yorkers from taking advantage of it by imposing a cap," Harry Hartfield, a spokesperson for Uber, said in a statement to Reason. The company has endorsed a congestion pricing plan, which would allow the city to levy a surcharge on vehicles serving higher-density areas. "We agree that fighting congestion is a priority, which is why we support the state's vision for congestion pricing, the only evidence-based plan to reduce traffic and fund mass transit."

Indeed, the current data does not justify New York City's move. A report released by transportation consultant Bruce Schaller was hailed by ride-sharing critics, as it concluded that Uber and Lyft added approximately 5.7 billion vehicle miles in nine major metropolitan areas over the last six years. But as Robin Chase points out in CityLab, that's a static view of a dynamic problem. The Federal Highway Administration surveyed urban areas with rail systems, and found that taxis and ride-sharing services account for a mere 1.7 percent of miles traveled. Personal vehicle usage, in comparison, makes up a whopping 86 percent. New York City's own mobility survey confirms that travel by way of private car far outweighs transport via ride-hailing apps.

In other words, congestion was a problem before Uber, and it will be a problem with or without an arbitrary cap on rideshare licenses.

Meanwhile, throttling rideshare availability will hurt the most vulnerable at the expense of helping a choice few. Ninety percent of app-based drivers are first generation immigrants and speak English as a second language. That group faces an uphill battle when seeking employment, and the vehicle cap is yet another roadblock to their success. Over 3,000 New Yorkers have tried and failed to obtain a license since the cap went into effect, Hartfield tells Reason.

What's more, riders in low-income areas will have a harder time finding a way to get around. Many of those residents live in one of the outer boroughs, where taxi options have historically been scant and subway passengers face disproportionately longer delays. A vehicle cap means Ubers will be fewer and farther between in those areas: Drivers would be incentivized to stay in Manhattan where demand is higher, allowing them to pocket a higher payoff (and likely increasing congestion in the central business district).

According to Hartfield, the initial data supports this, as the number of intra-Manhattan trips has grown at a faster rate than those in Brooklyn, Queens, the Bronx, and Staten Island. Congestion will certainly be lighter in the outer boroughs, at least.

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  1. A moratorium on ride-sharing apps will inevitably make it harder for low-income residents to get around.

    They too poor to have feet? How about bicycles? There’s fancy new bicycle lanes all over the damn place.

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  2. Uber keeps forgetting to pay the required bribes to city hall.

    1. THIS. Christ, what corrupt assholes. They’re blocking the people they serve from enjoying lower priced transportation and the ability to earn extra cash with their own vehicle on the very streets their taxes pay for. Screw NY City Council.

  3. DeBlasio is a DOPEHAT.

    1. Oh no, not another episode of “Old White Lawyers Complain About Another Old White Lawyer.”

    2. If it weren’t for your hatred of negroes, you’d be a regular Atticus Finch.

      1. So are you still considering harming yourself?

  4. congestion was a problem before Uber,

    Why don’t they just blow their nose or something?

  5. “”A moratorium on ride-sharing apps will inevitably make it harder for low-income residents to get around.”‘

    No need to worry about that. With the new MTA surcharge that took affect, and congestion pricing coming by the end of 2020, low-income residents would not be able to afford it.

    1. MTA

      This is what happens when fares go up.

      1. Poor old Charlie.

  6. New York City should reduce traffic by directly connecting the Queens Midtown Tunnel with the Lincoln Tunnel and the Battery Tunnel with the Holland Tunnel, eliminating the Manhattan entrances and exits for all four tunnels, and banning motor vehicles from the Brooklyn Bridge, Manhattan Bridge, and Williamsburg Bridge.

    1. Cheaper to just nuke that hellhole.

    2. Really? How would you move goods and supplies into and around the city?

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  8. “Ninety percent of app-based drivers are first generation immigrants and speak English as a second language”

    So Debaseo is anti immigrant. What a bunch of hypocritical bigots,

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