Replace: The New York Metropolis Council has voted to cap Uber autos.
As Uber has grown into a world behemoth, upending city transportation networks and altering the best way individuals get round, the corporate has usually discovered itself clashing with native governments or attempting to dig itself out of a public relations morass.
On Wednesday, it’s prone to endure one in all its largest blows.
The New York Metropolis Council is predicted to vote on a cap for Uber autos — a transfer that will be a serious setback for the tech large in its largest American market.
The Metropolis Council plans to vote on a bundle of payments that will halt the issuance of latest licenses for Uber and different ride-hail autos for a yr whereas the town research the booming trade. The laws would additionally permit the town to set a minimal pay price for drivers.
Why does the town say a cap is required?
Mayor Invoice de Blasio and Corey Johnson, the Metropolis Council speaker, say the payments will handle worsening road congestion and enhance low driver wages.
The battle over Uber’s future in New York has been prompted partially by rising considerations over monetary turmoil amongst drivers — an issue underscored by six driver suicides in latest months.
“The Uber enterprise mannequin is: Flood the market with as many vehicles and drivers as potential, achieve extra market share and to hell with what occurs to drivers or anyone else concerned,” Mr. de Blasio mentioned in a tv interview on Monday.
Mr. de Blasio, a Democrat, tried unsuccessfully to cap Uber in 2015. Since then, the variety of for-hire autos within the metropolis has surged to greater than 100,000 autos, from about 63,000 in 2015, in keeping with the town.
What would this imply for Uber?
The brand new guidelines would make New York the primary main American metropolis to limit the variety of ride-hail autos and to ascertain pay guidelines for drivers. They may set a precedent for different cities searching for to rein in Uber and doubtlessly set off a ripple impact.
Uber, which has been valued at $48 billion and may very well be shifting towards an preliminary public providing, has turn into wildly common whereas repeatedly moving into controversy.
In London, Uber’s most profitable European market, officers not too long ago allowed Uber to regain its taxi license after the corporate agreed to stricter rules, together with sharing site visitors knowledge with the town. Uber has additionally confronted regulatory battles in American cities, like Austin, Tex., and in international locations like Canada, Brazil and Italy.
The corporate’s new chief govt, Dara Khosrowshahi, has been working to restore the corporate’s picture after a collection of controversies, together with complaints over gender discrimination and harassment.
How would a cap impression New Yorkers?
Uber has mounted an aggressive promoting marketing campaign towards the cap saying that it may elevate costs for rides and lengthen wait instances for passengers. Uber additionally argues that New Yorkers want the app greater than ever as a result of the subway and bus techniques are in disaster.
“A 12-month pause on new for-hire car licenses will depart New Yorkers stranded whereas doing nothing to forestall congestion, repair the subways and assist struggling taxi medallion house owners,” Josh Gold, a spokesman for Uber, mentioned in an announcement. “It’s unlucky that the Council selected to tack this on to a considerate bundle, together with the residing wage proposal.”
Lyft, one other common app, additionally opposes the cap. Its leaders say that almost 1 / 4 of its drivers may depart due to routine turnover, resulting in a scarcity of drivers over the following yr.
How would the laws assist drivers?
Many taxi and Uber drivers say they assist the cap proposal.
Drivers hope the cap will halt the flood of latest autos clogging metropolis streets and permit them to finish extra journeys and enhance their earnings. Uber and different ride-hail providers may add new autos provided that they’re wheelchair accessible.
If the town units a minimal wage of $17.22 an hour after bills, that will improve driver earnings by about 22.5 p.c on common, in keeping with a research by impartial economists.
About 40 p.c of for-hire car drivers have incomes so low that they qualify for Medicaid and about 18 p.c qualify for meals stamps, in keeping with the research.
What’s the metropolis doing to assist taxi house owners?
The taxi trade has additionally been decimated by Uber’s rise. The worth of a taxi medallion, which is required to function a taxi in New York, has plunged from greater than $1 million to lower than $200,000.
Lyft’s leaders say the ride-hail corporations supplied to ascertain a $100 million fund to assist taxi drivers if the town dropped the cap proposal, however metropolis officers refused the provide.
The Metropolis Council is planning to think about a separate set of payments to assist taxi drivers, together with measures to create a well being advantages fund and to review how one can help medallion house owners with extreme debt.
On Tuesday, the New York Taxi Employees Alliance, a bunch that represents drivers, held a vigil outdoors Metropolis Corridor to recollect the drivers who killed themselves. The group launched a video from the brother of Kenny Chow, a taxi driver discovered floating within the East River in Could.
His brother, Richard Chow, asked New Yorkers to support the cap in order that “nobody else is pushed to monetary despair.”
Comply with Emma G. Fitzsimmons on Twitter: @emmagf