(Bloomberg) -- New York City Mayor Bill de Blasio moved to permanently extend the cap on for-hire vehicles working for companies including Uber, Lyft, Via and to add restrictions on how long such cars can cruise without passengers in part of Manhattan, seeking to ease congestion on traffic-clogged streets.
New York’s cap on drivers for such app-based services was enacted last August. De Blasio said reducing cruising time for empty cars and permanently limiting the number of for-hire vehicles is also intended to increase drivers’ pay as much as 20%. The extension to the cap needs approval from the Taxi & Limousine Commission, which would review it annually and decide where it should be set.
“For too long, app companies have taken advantage of hardworking drivers, choking our streets with congestion and driving workers into poverty,” de Blasio said. “Last year we took the first step, and this year we’re going further.”
Uber spokeswoman Alix Anfang said the mayor is trying to help the Yellow Cab industry, which has donated to his political campaigns. There are more than 13,000 of such taxis in the city, a total dwarfed by the tens of thousands of electronically-hailed for-hire vehicles that have emerged in recent years.
The surge in competition for fares has weighed on drivers who in some cases paid hundreds of thousands of dollars for medallions, which have since tumbled in value. Drivers for app-based services didn’t have to pay such licensing fees.
“The mayor’s cap will create another medallion system -- the same kind that bankrupted drivers and enriched lenders,” Anfang said. “Not only is the mayor’s policy hurting app drivers by forcing them to pay exorbitant fees to rent a car, but he has proposed nothing to fix the current medallion system that only benefits lenders and taxi insiders.”
Unrestrained growth and increased competition has suppressed pay for drivers of Yellow Cabs, black car liveries and luxury limousines. Hundreds of cab owners couldn’t earn enough to pay their car leases and taxi-license medallions, and economic desperation became a factor in more than half a dozen driver suicides in 2017 and 2018. About 85% of drivers for app-based companies earned less than $17.22 an hour, according to an industry study by New School’s Center for New York City Affairs.
After the limits and minimum wage standards were enacted last year, drivers earned $172 million more between Feb. 1 and May 19 than they did a year earlier, based upon per-trip pay comparisons before and after the rules took effect, the mayor said. About 80,000 drivers should experience pay increases averaging about $10,000 a year, he said.
The city’s Taxi & Limousine Commission will pursue efforts to extend the cap permanently, de Blasio said. It was enacted as a temporary one-year measure scheduled to expire in August. The limit will exempt wheelchair-accessible vehicles.
The prohibitions on cruising without passengers was proposed after studies found that 41% of for-hire vehicles are empty. Companies will be required to reduce that to 31% of the time vehicles are in use, with companies that violate the rule at risk of losing a license to operate in the city. The cruising limit would be in effect weekdays from 6 a.m. to 11 p.m. and weekends between 8 a.m. and 11 p.m., the mayor’s office said in a news release.
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