Uber Drags New York City into Court over Draconian Cap on Ride-Hail Drivers

Uber is suing New York, seeking to overturn the city's year-long cap on new licenses for ride-hailing vehicles. The company said it's suing the city because it's worried that the temporary restriction could become a permanent draconian measure.

12-Month Cap Was Imposed To Curb Congestion

In its February 15 lawsuit filed in New York Supreme Court, Uber claims the city is punishing it with a "ban first, study later" approach that's anti-competitive and hurts customers who live outside of Manhattan.

"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."

"The City made this choice in the absence of any evidence that doing so would meaningfully impact congestion ― the problem the City was ostensibly acting to solve."

In August 2018, the New York City Council voted to impose a 12-month cap on new licenses for ride-hail companies such as Uber and Lyft, CNBC reported.

During the year that the cap is in effect, the NYC Taxi and Limousine Commission plans to examine the effects of ride-hail services ― notably, its impact on traffic congestion.

Suicides Spike among Yellow-Cab Drivers

Authorities also cited a growing economic crisis among yellow-cab drivers, who complain that increasing competition from Uber and Lyft is hurting their livelihoods. The result has been an alarming spike in suicides among yellow-cab drivers.

In a November 2018 statement, the New York Taxi Workers Alliance discussed the harrowing crisis:

"Eight drivers have now died by suicide because of the crisis Uber created. That's why Uber drivers and yellow cab drivers from across the city united to win the historic cap on for-hire-vehicles — to put an end to the financial despair, debt, and poverty that is literally killing our brothers."

Cyclists and Pedestrians Hate the Extra Traffic

Anecdotally, people who take taxis in New York City will tell you that yellow-cab drivers hate Uber and Lyft, which they complain are stealing their customers and taking money out of their pockets.

In addition, anyone who bikes on Manhattan's busy streets complains about the increased congestion caused by the barrage of ride-hailing vehicles. Finally, pedestrians are unhappy with the reckless driving of both yellow cabs and Uber drivers, who compete for fares.

Congestion on New York City streets is expected, but it has worsened in recent years due to the proliferation of ride-hailing vehicles. Ask any New Yorker, and they will confirm that this is true.

Amazon Ditches New York Amid Protests

The Uber lawsuit comes just days after online retail giant Amazon scrapped plans to build a second headquarters in Queens, New York.

As CCN reported, the facility would have created 25,000 high-paying jobs and would have been an economic boon to the industrialized area. The residual job creation was projected at an additional 67,000 jobs.

Democrat Congresswoman Alexandria Ocasio-Cortez led the protests to chase Amazon out of New York.

Ocasio Cortez is now being slammed for her disastrous activism, which is being blamed for the loss of tens of thousands of local-area jobs.

Now, there are concerns among some in the New York City business community that Uber might also leave the city due to its increasingly anti-business environment.

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About the author

Samantha Chang
Samantha Chang

Samantha Chang is a New York City-based financial editor who writes about crypto and business at CCN. She is a law school grad and an alum of the University of Pennsylvania. Email her at [email protected] or follow her on Twitter at Samantha_Chang.

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