Money & Business

Should New York City Cap The Number of Uber Drivers?

By / Jul 27, 2015 (Sergio Perez/Reuters)

After New York City’s mayor and city council dropped legislation that would have put a cap on the number of Uber cars allowed in the city, a number of associations responded with mixed reviews.

Uber and other ridesharing companies have the green light, for now, to operate in New York City without any impending restrictions on their companies’ growth.

This after the city’s mayor, Bill de Blasio, is no longer considering legislation that would have limited the number of Uber vehicles that can be operated within the city. The cap was an attempt to reduce traffic congestion, according to The New York Times.

Days before the bill came up for a vote in City Council, the mayor’s administration reached an agreement with Uber under which the city will conduct a four-month study on the effect of for-hire vehicles on New York’s traffic. As part of the agreement, Uber will give the city access to data to use as part of its study.

The deal received mixed reactions from associations.

The Consumer Electronics Association praised the agreement and encouraged the city not to consider legislation that would hinder innovation in the future. “We’re pleased with Mayor de Blasio’s decision to shelve the plan to put an artificial cap on Uber’s presence, and welcome the news that Uber, the mayor’s administration and City Council will work together on expanding economic opportunity and building a better transportation system in New York City,” Gary Shapiro, CEA president and CEO, said in a statement.

In a letter [PDF] to de Blasio a week before a deal was reached, the Internet Association also spoke out the potential danger to innovation that a cap on for-hire drivers could create.

“Solving big problems through innovation is the hallmark of the Internet industry,” the letter stated. “This is why it is particularly ironic that the New York City government is singling out the very Internet platforms that are doing the most to tackle congestion. … Technology and innovation allows us to better utilize the cars on the road, increase wages for drivers, and save money for riders.”

On the other hand, the App-Based Drivers Association, a Teamsters Union organization that Uber has referred to as “bogus,” said capping the number of Uber drivers would mean hirer wages for those left on the road. As Uber driver and ABDA member Peter Kuel told Inc, fewer for-hire drivers equates to less competition, and it correlates with higher prices for rides—a win-win for drivers.

“I think that there should be a limit in everything,” Kuel said.

Katie Bascuas

Katie Bascuas is associate editor of Associations Now. More »

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