By Dane Larsen | @therealdanelars
This Wednesday, the City Council of New York voted in favor of putting a cap on private companies that provide ride shares throughout the city.
The demand for these services in the public eye has grown exponentially recently. Lyft, for example, formed in 2012. Its alternative in the market, Uber, first operated in 2009. These companies have since gained a lot of traction, with just around 100,000 ride-sharing vehicles in the City, not counting the 20,000 yellow cabs. Each ride share company gives 10,000 rides per day to settle the high demand of people in the city. The number is only likely to grow. So, citizens are concerned that the government is passing this limiting bill.
The legislation itself calls for the restriction of access to get a licence for legitimate service with the major companies involved. Though the city has had taxi-cabs for as long as it has been the epicenter of the world economy, the implementation of private companies into this sector of the economy has caused a never-before-seen boom in the market. The city will, effective immediately, halt the option to obtain these licences for 12 months while they “research the… industry”. The council is said to have voted it down because of reduced revenue for public taxis. Uber and Lyft are also reportedly a net loss for the state department.
In addition, the city will provide a higher minimum wage to the employees of ride share companies Lyft, Uber, Via, and Juno. This minimum wage for the service will be $17.22, come the implementation of this bill. If the drivers do not earn this, the company will have to make up the difference. This is a plan to drive out the private ride share services and bring income back to the state.
Economists forecast that the rides, as a result, will grow more costly and harder to obtain. Uber and Lyft have already made public statements saying that their services will go nowhere, just slow down. Despite the multi-million dollar ad campaigns by the biggest companies in the industry, lawmakers still went through with the passage of this law.
“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,” -Spokesperson for Uber, NYC
Although multiple private companies have stepped into the picture to provide a better, more easily accessible, and affordable solution to a crisis in the city, the government has yet again intervened to slow down production to the economy. NYC is the first major city of the country to do so in this sector. Will other cities be soon to follow? How far will government go to cripple the action of ride sharing companies?
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