NYC caps number of Ubers, Lyfts, gives drivers higher hourly rate

Uber, Lyft, Via, Juno, and other ride-hailing app drivers have some new protections and minimum pay guarantees in New York City after a city council vote this afternoon.

One of the votes put a cap on the number of vehicles licensed to drive for apps like Lyft and Uber. The “pause” will last 12 months; at that point the city will review how the break affected congestion, public transit, drivers, and passengers. It’s not a permanent ban on new ride-hailing vehicles, and there is some flexibility, like for new accessible vehicles. 

New York is the first major American city to take a stand on the number of vehicles Uber, Lyft, and other ride-sharing apps can have out on the street. 

Uber and Lyft, for their parts, seemed discouraged with Wednesday’s cap decision.

In a statement, Lyft VP of public policy Joseph Okpaku said, “These sweeping cuts to transportation will bring New Yorkers back to an era of struggling to get a ride, particularly for communities of color and in the outer boroughs.”

Uber also saw the cap as a hurdle for riders to easily access cars and shared rides. “The City’s 12-month pause on new vehicle licenses will threaten one of the few reliable transportation options while doing nothing to fix the subways or ease congestion,” a spokesperson said in a statement.

Amitai Bin-Nun, vice president of Autonomous Vehicles and Mobility Innovation at Securing America’s Future Energy, or SAFE, echoed concerns for riders in an email statement: “Caps on transportation network companies vehicles will likely do more harm than good.” For many riders, plentiful Lyft and Uber vehicles provide an easier way to get around the city, the organization said. 

The Amalgamated Transit Union in a statement said it “applauds” the temporary freeze. Lawrence Hanley, the union president, called this “an important first step in the fight for justice for rideshare drivers.”

NYC mayor Bill de Blasio also praised the yearlong vehicle hold.

The other big vote was on a minimum driver pay plan. In a 5-1 vote, the city voted to establish minimum hourly pay for drivers within a more “livable” range.

Drivers had been pushing for pay protection and were celebrating the win this afternoon.

The Independent Drivers Guild, which represents app drivers, was ecstatic about what it considers a pay raise. “We hope this is the start of a more fair industry not only here in New York City, but all over the world,” IDG founder Jim Conigliaro, Jr., said in a statement.

Lyft said it supports a livable wage for its drivers and is already paying close to the $17.22 minimum hourly rate (after expenses) to its drivers. Uber saw the combination of the vehicle cap and guaranteed pay rate as a way to encourage already licensed drivers to come to the Uber platform. Uber said there are 121,840 for-hire vehicles already licensed in the city, but apps like Uber or Lyft only work with about 80,000 of those vehicles. So the remaining vehicles are able to jump online and start earning. 

These new rules may push the apps to get creative to make sure ride-hailing passengers don’t experience huge service gaps and drivers stay happy.