New York’s city council on Wednesday imposed a year-long cap on new drivers for Uber and similar ride-hailing app services, as the city conducts a study on the effect of the industry. The council also passed a measure to consider a minimum wage for drivers, the first of its kind in the U.S.
The vote followed an intense public relations campaign by Uber and Lyft in recent weeks, with both levying threats that quick access to rides will become a thing of the past. The companies tepidly supported some of the council’s proposals, but argued the cap was counter-intuitive for New Yorkers and their business.
But officials were moved to act after six drivers committed suicide in recent months, citing mounting debt in wake of Uber and Lyft’s arrival. The city proposed a similar cap in 2015, but Mayor Bill de Blasio eventually relented in the face of a public relations ploy by the companies.
That changed on Wednesday.
“Our city is directly confronting a crisis that is driving working New Yorkers into poverty and our streets into gridlock,” the mayor, who is expected to sign off on the legislation, said in a statement. “The unchecked growth of app-based for-hire vehicle companies has demanded action—and now we have it.”
Drivers’ advocate groups hailed the decision, after a months-long campaign to convince officials to pass the measures.
“This victory belongs to our brothers and sisters who pulled over to the side of the road to call City Council members during their grueling 14 hour shifts,” Bhairavi Desai, president of the New York Taxi Workers Alliance, said in a statement. “This victory belongs to yellow cab, green cab, livery, black car, Uber and Lyft drivers who united together in our union to transform our shared struggle and heartbreak into hope and strength.”
It’s unclear how Uber and Lyft will respond, or if other cities will follow suit.
Uber said in a statement that the pause will “threaten one of the few reliable transportation options while doing nothing to fix the subways or ease congestion.”
“We take the Speaker at his word that the pause is not intended to reduce service for New Yorkers and we trust that he will hold the TLC accountable, ensuring that no New Yorker is left stranded,” the statement said. “In the meantime, Uber will do whatever it takes to keep up with growing demand and we will not stop working with city and state leaders, including Speaker Johnson, to pass real solutions like comprehensive congestion pricing.”
Lyft echoed those remarks, calling the cuts “sweeping” and said it will bring the city “back to an era of struggling to get a ride, particularly for communities of color and in the outer boroughs.
“We will never stop working to ensure New Yorkers have access to reliable and affordable transportation in every borough,” said Joseph Okpaku, Lyft’s vice president of public policy, in a statement.
The legislation also allows the city to pass a minimum wage. A study by the city’s Taxi & Limousine Commission proposed a minimum wage of $17.22 per hour, which is the equivalent for an independent contractor of $15 per hour plus paid time off. It covers al drivers who work for ride-hailing companies, including Lyft, Via and Juno.
The study’s authors, James Parrot of NYC’s New School and Michael Reich of the University of California-Berkely, said the minimum wage would have a significant impact for many drivers. The pair’s findings found that 85 percent of current ride-hailing app drivers earn less than their proposed wage.
“These drivers would receive an additional $6,345 per year,” they wrote. “The net (after-expense) pay increase among these drivers would average 22.5 percent.”
Officials also pointed to the study’s finding that 90 percent of the city’s app-based drivers are immigrants, and driving is the only job for two-thirds of them. An estimated 80 percent acquired their vehicle to enter the industry. And more notably, 40 percent of drivers have incomes so low they qualify for Medicaid, and another 16 percent have no health insurance. Nearly one-in-five drivers qualify for food stamps.
“More than 65,000 working families will be getting a desperately needed raise because of today’s vote. We hope this is the start of a more fair industry not only here in New York City, but all over the world,” said Jim Conigliaro Jr., founder of the Independent Drivers Guild, which represents tens of thousands ofd rivers in the city. “We cannot allow the so-called ‘gig economy’ companies to exploit loopholes in the law in order to strip workers of their rights and protections.”
The cap garnered support from drivers across the industry, including the brother of Kenny Chow, one of six drivers who’ve committed suicide in recent months as a result of increasingly high debt loads after Uber and Lyft arrived in the city.
“There are so many, over 130,000 vehicles on the street,” Chow, a cab driver himself, told Jalopnik in an earlier story about the proposed measures. He paused: “That’s why we’ve lost a lot of business.”