The local council of New York City has suspended the process of granting new licences to ride-hailing companies for one year. It blamed firms such as Lyft and Uber for the congestion problems of the city.
The package of measures that were outlined by Bill de Blasio, the mayor of the city, overnight also includes establishing a minimum wage for drivers, following the statement of the New York Taxi Workers Alliance that said that low incomes had served as a contributing factor to six suicides among its drivers in recent months.
The package will implement a 12-month ban on the issuance of new for-hire vehicle licences. However, it will not include those which are wheelchair-accessible. It has been vehemently criticised by the major ride-hailing companies that are operating in New York.
The news signifies the first time that a large US city has imposed a cap on ride-hailing companies, with New York City being one of the major sources of revenue for the companies.
In a statement, Uber said that the pause will endanger ride-hailing companies as a viable transport option for the people in New York, while “doing nothing to fix the subways or ease congestion.”
Lyft agreed, saying: “These sweeping cuts to transportation will bring New Yorkers back to an era of struggling to get a ride, particularly for communities of colour and in the outer boroughs.”
In an email that was addressed to city users last July, Uber criticised the move for a possible increase in prices, longer wait times, and fewer services in outer-city areas.
Ride-hailing cars in New York City have increased by more than 85 percent during the last three years. It is now sitting at approximately 80,000 as compared to only 14,000 yellow cabs.
De Blasio said that he intends to impose the measures into law. He says that it will “stop the influx of cars contributing to the congestion grinding our streets to a halt.”
Firms such as Uber have also experienced trouble elsewhere from city authorities. Recently, it restarted its operations in Finland after shutting down while the new laws came into effect.
Meanwhile, in London, Uber is operating under a renewed 15-month licence that was granted by the Transport for London on the condition that the firm has reformed its “gung-ho” attitude to the business. It continues to suffer a backlash from taxi drivers.