National News

This Time It’s Uber on the Defensive in Battle With New York

Posted July 27, 2018 11:08 p.m. EDT

NEW YORK — The last time New York City tried to impose a cap on Uber’s vehicles, the rout was brutal. Uber introduced a “de Blasio view” in its ride-hailing app, blaming long wait times on Mayor Bill de Blasio. Celebrities like Ashton Kutcher and Kate Upton voiced their support for Uber on Twitter.

The mayor was forced to back away from the plan in 2015.

Now, Uber is gearing up for another fight, this time over a proposal by the City Council for a yearlong cap on for-hire vehicle licenses. But the political terrain has shifted substantially, and this time it is Uber on the defensive.

Over the past three years, Uber and other ride-hailing companies have added tens of thousands of vehicles to New York’s roads, prompting growing alarm over congestion and low driver wages.

Uber’s reputation has also taken a beating over accusations of gender discrimination and harassment and other scandals. Its new chief executive, Dara Khosrowshahi, has tried to adopt a friendlier, more cooperative approach.

At the same time, there have been signs of a broader disillusionment with Silicon Valley in cities across the country. New York is also moving to rein in Airbnb, another popular service that has threatened the hotel industry.

On Friday, Corey Johnson, the City Council speaker, said he was confident about passing the legislation for a cap and other regulations for the for-hire vehicle industry. Johnson wants to vote on the bills by Aug. 8.

“We aren’t taking away any service that is currently being offered to New Yorkers,” Johnson said during a phone call with reporters. “We’re pausing the issuance of new licenses in an industry that has been allowed to proliferate without an appropriate check.”

New York is Uber’s largest U.S. market, and the cap is viewed as a significant threat to its booming business. Uber quickly signaled on Friday that it would push back aggressively against the proposal.

Uber views its army of riders as its best resource. The company sent an email to millions of customers that said the council’s legislation would make Uber more expensive and less reliable. It launched a $1 million ad campaign and a hashtag #DontStrandNYC.

Uber’s leaders say there was another significant change in New York in the past three years: The city’s subways have descended into a crisis and commuters have relied on Uber because of that.

“New Yorkers have been demanding that our leaders fix the subways; instead, they have decided to break Uber,” said Josh Gold, a spokesman for the company.

In a new ad, Uber argues that the app is needed outside Manhattan, especially for black passengers who have been turned away when hailing taxis in the past. Uber also supports congestion pricing — a proposal to levy tolls on vehicles entering Manhattan’s most congested neighborhoods — to reduce gridlock on city streets.

De Blasio, who has opposed congestion pricing, voiced his support for the council’s legislation Friday. In a radio interview, de Blasio criticized Uber for flooding the streets with vehicles.

“I think the council is taking a strong view of a very, very serious issue and they’re trying to do something about it and I commend them for that,” de Blasio said.

De Blasio mentioned the recent spate of driver suicides in New York — another factor that has focused attention on the industry. Six professional drivers have killed themselves in recent months, including three taxi drivers, for reasons that have included their financial distress as the industry has changed.

The New York Taxi Workers Alliance, a group that represents thousands of taxi and Uber drivers, said it supported the cap proposal. The group released a statement saying Uber’s rise had led to a “crushing race to the bottom and economic despair among a workforce of over 100,000 drivers.”

Lyft, the second-most popular ride-hailing app in New York, joined Uber in criticizing the cap.

“This would take New York back to an era of standing on the corner and hoping to get a ride,” said Adrian Durbin, a spokesman for Lyft.

Johnson is also pressing for several other regulations, including a move to set minimum pay rules for drivers working for app services. But some critics say the proposals might be too late to reduce congestion. The number of for-hire vehicles in New York has risen to more than 100,000, from about 63,000 in 2015, according to the city. A cap would have fewer repercussions for ride-hailing companies this time around because they have already flooded the market with vehicles, said Arun Sundararajan, a professor at New York University who has studied Uber.

“The fact that the cap was avoided in 2015 was very important for Uber and Lyft and others,” he said.

Uber, which arrived in New York in 2011, has been known for its aggressive tactics and for pushing boundaries. But Sundararajan said the idea of rolling out another “de Blasio view” feature would undermine the company’s attempt to show that it had grown up.

“I don’t think that kind of response would be consistent with Uber’s attempt to remake its image and project the image of a more mature company,” he said.

Karen Hinton, who served as de Blasio’s press secretary during the 2015 cap attempt, said that the proposed cap this time had more momentum. In 2015, “I don’t think people were educated about it,” she said. “In that three-year period, there has been much more research and dialogue about the good and bad elements of for-hire vehicles companies.”

Donovan Richards, Jr., a City Council member who represents a district on the city’s eastern edge in Queens, said he was undecided. He liked the idea that a cap might ease traffic congestion, but he was concerned that residents in boroughs outside Manhattan would see an adverse impact.

“For African-American males such as myself, it’s very hard to get a yellow cab in New York City, and I certainly want to hear from the taxi industry how they’re going to ensure, when I put my hand out outside of City Hall, I can get a cab,” Richards said.

Ben Kallos, a City Council member from Manhattan, said that he planned to vote against the cap, although he favors other bills in the package meant to regulate the industry. He said that he was bothered by the idea that the cap would halt new licenses while studying the industry.

“The scientific method says we test our hypotheses before we act on them,” Kallos said. “I don’t support any legislation that creates a solution before we know it actually fixes a problem.”