The cap will halt new ride-hailing vehicle licenses for one year while the council investigates how to mitigate issues that came with the influx of companies like Uber and Lyft, mostly related to congestion and driver wages.
The one-year cap - which won't apply to wheelchair accessible vehicles or in certain underserved areas deemed not to be affected by congestion - is meant to make way for a study on longer term regulations and standards for the industry.
The bill stipulates a 12-month cap on all new for-hire-vehicle licenses, unless they are wheelchair accessible, as well as minimum pay requirements for app drivers - regulated by the Taxi and Limousine Commission (TLC).
New York Mayor Bill de Blasio praised the vote, saying the council's actions will ease congestion in city streets and protect more New Yorkers from earning less than minimum wage. "In the meantime, Uber will do whatever it takes to keep up with growing demand and we will not stop working with city and state leaders, including Speaker Johnson, to pass real solutions like comprehensive congestion pricing". The same companies are now pushing back on the new proposals, including telling users through social media and on their apps that the legislation could make rides more scarce and more expensive.
"We will never stop working to ensure New Yorkers have access to reliable and affordable transportation in every borough", he said.
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However, the Independent Drivers Guild, which includes Lyft and Uber drivers, celebrated the passage of the new bills, highlighting the new minimum wage for drivers.
Yellow taxi drivers have been pushing for this legislation because they say the rapid growth of ride-hailing services is destroying their industry. Around 13,500 yellow cabs had the special licenses, called medallions, needed to pick up passengers on the street.
Lawmakers who backed the measure cited congestion in the city and hoped that it would stop the decline in compensation for drivers, according to WABC in NY.
The New York Taxi Workers Alliance, which has pushed hard for the freeze, hailed the city council. "And this victory belongs to New Yorkers and our allies who have stood with us to say, not one more death, not one more fallen driver crushed by poverty and despair".
Uber spokesman Josh Gold said a cap on new licenses would reverse the progress made extending service to neighborhoods poorly served by traditional taxis.
"And you know that yellow don't pick up black". The law does not put a cap on new drivers. By passing the proposal, NY becomes the first city in the country to impose these limitations. Uber is not going away'.