New York City is reining in the growth of Uber, Lyft and other app-based ride services with a temporary cap on new cars picking up fares.
In what is the first-in-the-nation, the City Council approved a package of bills Wednesday that included a one-year moratorium on new licenses for for-hire vehicles while the city studies the rapidly changing industry.
The Council also voted to set a minimum driver wage equivalent to the yellow cab wage for app-based drivers.
Backers of the proposals said both the traditional yellow cab industry and drivers for app-based services are suffering as Uber cars flood the city’s streets. They said the growth of ride-hailing apps has also worsened traffic congestion.
But opponents said Uber and Lyft provide needed service to neighborhoods outside Manhattan that are poorly served by yellow cabs.
For generations, taxi drivers in New York were protected by rules restricting competition. Around 13,500 yellow cabs had the special licenses, called medallions, needed to pick up passengers on the street. Several thousand more drivers worked for black car companies that dispatched vehicles by phone, mostly in the outer boroughs of Bronx, Queens, Staten Island and Brooklyn, where yellow cabs generally wouldn’t travel.
That system was smashed when the city began allowing passengers to use smartphone apps to hail cars almost anywhere.
The change kicked off a dizzying increase in the number of car service drivers from about 65,000 in 2015 to 100,000 now.
One unforeseen development has been plunging value of the traditional taxi medallions. As recently as four years ago, they were changing hands at prices reaching $1 million. They were considered such a ticket to guaranteed income, banks allowed owners to borrow huge sums against them for home mortgages or school loans.
Now, many of those loans are coming due. Drivers no longer have the income to pay them off. And with medallions now trading at $200,000 or less, owners don’t have the collateral to refinance.
Driver Lal Singh said he owes $312,000 on a medallion he thought would be his ticket to middle class comfort. But he can’t sell at a price high enough to cover his debt. So at age 62, he’s still driving 14-hour shifts, despite having high blood pressure and diabetes, with every penny going to pay off his debt.
“Everybody say, ‘This is my retirement. Some income will come in from the medallion. We will survive,'” he said. “But now we have no hope and I don’t see any place, which direction I should go.”
Six drivers have taken their own lives in the last year, including one who shot himself in his car in front of City Hall after railing against politicians and Uber in a newsletter column.
“I will not be a slave working for chump change,” Douglas Shifter wrote. “I would rather be dead.”
Drivers previously pushed for a cap on new competition in 2015, but were beaten back by ride-hailing companies. The same companies are now pushing back on the new proposals, saying they would prevent them from replacing drivers who quit and lead to reduced service.
“We’re really concerned about the process and the speed with which the council is trying to ram this through,” said Joseph Okpaku, vice president of public policy at Lyft.
Uber spokesman Josh Gold said a cap on new licenses would reverse the progress made extending service to neighborhoods poorly served by traditional taxis.
That argument has gotten support from some civil rights activists like the Rev. Al Sharpton, who have long criticized the yellow cab industry for discrimination and profiling of minorities.
“They’re talking about putting a cap on Uber, do you know how difficult it is for black people to get a yellow cab in New York City?” Sharpton wrote on Twitter.
The level of upheaval in the industry hasn’t been seen on this scale since the first half of the 20th century, when the medallion system was put in place to deal with issues of competition, said Graham Hodges, a professor at Colgate University.
Flaws in that system, like racial profiling and inadequate demand, “made it easy for Uber, Lyft and the others to come in, say, ‘We’re going to provide a much better service,'” he said.
“That doesn’t mean those flaws couldn’t be remedied without destroying the system,” he said.
(AP)
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One Response
There are too many uber vehicles out there. Anyone get now easily lease a car and be a uber driver. Their cars are all over. Leading to less parking spaces, which is unfortunate, because I know people don’t even bother moving their cars anymore, because they can’t find parking and uber anyway.