clock menu more-arrow no yes mobile

Filed under:

Uber lost in NYC. But here’s the real problem.

What city will try heavy-handed regulation next?

Uber And Lyft Drivers Rally In NYC In Favor Of Cap For Fore-Hire Vehicles Drew Angerer / Getty

Uber and Lyft took on New York City once again, and this time they lost. The New York City Council voted today to pass a package of bills that would, among other things, instate a 12-month pause on adding new ride-hail cars while the city studies the companies’ effects on congestion and driver wages.

Uber and Lyft have warned users that this may lead to higher prices and longer wait times for rides. “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,” Lyft VP of Public Policy Joseph Okpaku said in a statement.

This is hardly the end of the world for either company, or for their local competitor, Via; the bills leave a reasonable amount of wiggle room for each to continue to grow. For example, they can apply for more vehicle licenses if they can show that service in underserved areas has been diminished. They can also add more wheelchair-accessible vehicles, which aren’t part of the cap — the issue is that wheelchair-accessible cars are typically much more expensive.

“We take the Speaker at his word that the pause is not intended to reduce service for New Yorkers and we trust that he will hold the TLC accountable, ensuring that no New Yorker is left stranded,” Uber spokesperson Matt Wing said in a statement.

But the real trouble is that this may set a precedent for other cities looking to regulate Uber. While Uber and Lyft may be able to stomach a pause in what is Uber’s largest market in the U.S., attempts to replicate these bills in other places may prove to be much more overbearing or sweeping than those passed today in New York.

And with both companies eyeing an IPO in the next two years, regulation that dictates how much these companies can grow across several top markets could pose a more serious risk to their forecasts.

While Uber won its last battle with New York City, its efforts to counter were weaker this time around. For one, both Uber and Lyft had less time to activate their most loyal riders and community leaders. The last time New York City Mayor Bill de Blasio tried to impose a temporary cap on Uber, the company had about a month to fight it. This time, Uber and Lyft only had around two weeks.

More importantly, it wasn’t just a cap that Uber and Lyft were fighting. The New York City Council rather strategically packaged the cap proposal with bills that would regulate minimum wages for drivers — which the companies didn’t oppose — in the aftermath of a string of driver suicides. Both companies simply had less ground in opposing this package of bills.

Over the next year, New York’s Taxi and Limousine Commission will study the ride-share companies’ effects on congestion, how often their cars have passengers and driver wages, among other things.

The findings will then be used to determine decisions like whether there should be a permanent cap on ride-hail licenses, minimum livable wages for drivers and a potential minimum fare for each ride. (Worth noting: Both Uber and Lyft have had often-contentious relationships with the New York TLC.)

But today, drivers — taxi and ride-hail alike — are rejoicing.

“Workers and New York leaders made history today,” said Ryan Price, executive director of the Independent Driver Guild, a pseudo-union created out of a settlement with Uber. “It’s not easy taking on Silicon Valley behemoths, but we kept on fighting for what we know is right and today the workers prevailed.”

This article originally appeared on

Sign up for the newsletter Sign up for Vox Recommends

Get curated picks of the best Vox journalism to read, watch, and listen to every week, from our editors.