New York City will extend its cap on the number of riding-hailing app vehicles on city streets, and temporarily waive an annual fee that yellow cab drivers have to pay — two measures meant to help yellow cab drivers struggling to keep up with the competition and high costs to drive.
A CAP ON UBER, LYFT, AND MORE
Mayor Bill de Blasio announced Wednesday afternoon the extension of a moratorium on most new licenses, a cap that the city passed as legislation last summer to stem the growth of Uber, Lyft, and other ride-hailing app vehicle companies.
The city is not required to pass legislation to extend the cap, which will be in place until the summer of 2020.
Yellow cab drivers have been under significant financial distress in recent years with the rise of ride-hailing apps, in addition to predatory lending practices. De Blasio in May ordered a joint investigation into predatory practices by taxi medallion brokers following a New York Times report that delved into the devastation caused by risky loans associated with the rise and collapse of taxi medallion prices.
"When these ride-share companies came along, unfortunately we found drivers on a pathway to poverty. It was the exact opposite of what we had hoped for," de Blasio said at the announcement. "Why did this happen? It was a cynical strategy by these big corporations to flood the streets with so many vehicles that there was no way they could all be used at the same time; to take as much market share as possible, no matter what it did to the city, no matter what it did to the workers."
The mayor and city lawmakers have been under pressure to regulate the ride-hailing app industry and provide relief for yellow cab drivers. In the last two years, nine New York City drivers — including some ride-hailing app drivers — have taken their own lives due to significant debt.
Uber is already challenging the cap in court. A spokesperson for the company said in a statement, "The Mayor's cap will create another medallion system — the same kind that bankrupted drivers and enriched lenders. 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."
AN END TO A $1,100 FEE
The mayor also announced that New York City will temporarily waive the annual $1,100 fee that is required by the Taxi and Limousine Commission (TLC) for yellow cab drivers to operate. The waiving of that fee will amount to about $10 million in savings for the yellow cab industry and drivers in the next two years.
But advocates who gathered for the announcement Wednesday say while that is a good starting point, it is a drop in the bucket and only the beginning of what the city should do to help the debt-burdened drivers. Advocates are hoping the city provides debt relief or cancellation for many of the drivers who have gone bankrupt and spent their life savings to buy medallions. Medallions once had values over $1 million; now they are worth a fraction of that, saddling yellow cab drivers with massive debt.
"Our crisis is deep. We know that one thing alone will not solve it," said Bhairavi Desai, the president of the Taxi Workers Alliance, a union representing approximately 15,000 taxi drivers in the city.
The City Council is also vowing to tackle the issue. Speaker Corey Johnson introduced a package of legislation Wednesday aimed at regulating loans that many say unfairly straddled drivers with debt.
A LIMIT ON HOW OFTEN A DRIVER CAN CRUISE WITHOUT PASSENGERS
As part of Wednesday's announcement, the city said the Taxi and Limousine Commission would institute a rule that by August 2020, the app companies could only have drivers cruising in Manhattan's core areas without passengers 31 percent of the time, down from the 41 percent of the time city officials said they currently do. If they don't reach that target, the city said, the companies will face sanctions.
Information from the Associated Press was used in this report.
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