Nation's First Ride-Hail Cap Will Stay In Place, NYC Mayor Says

NEW YORK — New York City will extend its first-in-the-nation cap on vehicles used by ride-hailing apps and pursue new rules to keep empty cars out of Manhattan's core, Mayor Bill de Blasio announced Wednesday.

The moves mark the city's latest bid to crack down on companies such as Uber and Lyft, which officials say have upended the local taxi industry and contributed to traffic congestion.

"For too long, app companies have taken advantage of hardworking drivers, choking our streets with congestion and driving workers into poverty. That era will come to an end in New York City," de Blasio, a Democrat, said in a statement.

The city's Taxi and Limousine Commission will keep its freeze on most new for-hire vehicle licenses in place for another year instead of letting it expire in August, de Blasio said. The City Council approved the initial yearlong freeze last August, making New York the first city to impose such a limit on the exploding ride-hailing industry.

The legislation also directed the TLC to study whether it should impose additional regulations. The results of that study, released Wednesday, recommend limiting how long ride-hail firms can allow their drivers to cruise without passengers in Manhattan below 96th Street, a practice that officials say clogs traffic in the busiest part of the city.

The city says app-based drivers currently spend 41 percent of their time on the road without passengers. New TLC rules would require companies to reduce that rate to 31 percent by August of next year or face the possible revocation of their licenses, the mayor's office said.

"This innovative approach represents a major win for our hardworking drivers and the city as a whole," Acting TLC Commissioner Bill Heinzen said in a statement.

The moves will build on the city's first-in-the-nation pay floor for app-based drivers. As of last month, drivers had earned an extra $172 million since February, when the TLC's minimum pay rules took effect, according to de Blasio's office.

The new policies will increase evening rush-hour speeds by as much as 10 percent and raise drivers' net pay as much as 20 percent at the busiest times, the mayor's office said.

But both are likely to face heated opposition from ride-hailing firms, just as the initial freeze and the minimum-pay rules have.

De Blasio's announcement led spokespeople for Lyft and Uber — the latter of which has sued the city over the cap — to accuse the city of hastily imposing policies that will hurt drivers. Both companies pointed to the problem of risky lending in the city's yellow cab industry, which an investigation by The New York Times exposed last month.

"The Mayor’s cap will create another medallion system — the same kind that bankrupted drivers and enriched lenders," Uber spokesman Harry Hartfield said in a statement.

Lyft spokeswoman Campbell Matthews said the mayor should give all relevant parties more time to review the TLC's new report on the cap before extending the policy or imposing any new rules.

"The Mayor’s announcement today is misguided and will be damaging to riders and drivers, as further restrictions on rideshare will result in fewer rides and lower earnings," Matthews said in a statement.

Uber argues that having a finite number of for-hire vehicle licenses will force owners to rent cars from fleet owners at exorbitant rates, similar to the artificial scarcity that defines the yellow taxi medallion system.

That's a concern shared by the Independent Drivers Guild, a labor group for app-based drivers. Leasing typically costs a low-income driver $10,000 more every year than owning their own vehicle, guild spokeswoman Moira Muntz said. The group has urged the city to limit the number of for-hire drivers rather than the number of vehicles.

"Stopping apps from flooding the streets with excess drivers is a good thing, but any future cap policy must give existing for-hire drivers the ability to drive vehicles they own rather than lease at the hands of predatory leasing companies," Muntz said in a statement.