Business

Caps on ride-sharing drivers placed to combat NYC congestion

New York City passed a bill that places regulations on ride-sharing apps in early August, becoming the first major city in the United States to do so.

The new regulations include a yearlong freeze on drivers getting a license to drive for the services, a cap on the number of ride-sharing drivers allowed on the road and a minimum wage of $17.22 per hour for them.

These new rules are part of an attempt to reduce traffic and road congestion in the city and improve living conditions for drivers. Critics say that the regulations will make it more difficult and expensive for people in New York to get around, however, particularly in the outer boroughs.

Uber and Lyft have voiced their concerns with the proposal, arguing that it will only increase the wait times for rides and make it more difficult for users to find cars in some neighborhoods.

“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,” Uber said in a public
statement.

The companies argue that the new law will not help the congestion problem and will put even more pressure on the city’s out-of-date public transportation system.

Ride-sharing companies have acknowledged the problems that are occurring and are advocating for a comprehensive congestion pricing plan, which would regulate traffic in more densely populated areas by charging higher rates for rides within those areas, helping to raise the funds needed to fix the subway problem.

This type of plan was recently launched in New York, but failed to be imposed. Uber has also mentioned that it plans to reach out to tens of thousands of already licensed vehicle owners who do not work for them as a way of bypassing the new restrictions.

Recent studies have shown that the rise in popularity of ride-sharing apps and the quickly rising number of drivers available have led to a large decrease in the wages of both ride-sharing and classic
taxi drivers.

The taxi industry, as well as many ride-sharing drivers, support the new restrictions. The problem with drivers’ wages has been in the spotlight recently due to six suicides by drivers not earning enough occurring in the past few months.

The cap does not apply to wheelchair-accessible vehicles and cars in areas that have not been affected by congestion problems, and it will only remain for a year while the city analyzes the industry further.

Additionally, the companies will be required to provide analysts  with data on usage and charges in order for those analysts to better understand the situation, including details about the duration, cost, driver earnings and the company’s commission on each trip.

A major point of criticism toward the new regulation is that minority and lower income regions in New York City are being targeted by these new regulations because of their heavy reliance on these companies for transportation.

The minimum wage decided on was recommended by the NYC Taxi and Limousine Commission, which took into consideration the costs of driving and owning a car and made allowances for paid time off for drivers.

New York’s plan will likely be used as a model for other cities that are concerned with the growth of these apps, opening the door for governmental involvement in the industry.

Uber in particular has faced regulatory battles in American cities like Austin and in countries like England, Canada, Brazil and Italy.

September 4, 2018

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Estelle Saad


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