NYC mulls cap on ride-hailing services

NEW YORK—New York City’s iconic but imperiled yellow cab industry may be getting help from lawmakers who want to pump the brakes on fast-expanding ride-hailing services like Uber and Lyft.

In what would be a first-in-thenation step if passed, the City Council on Wednesday is set to vote on proposals that would cap new licenses for car service drivers for one year while officials study the massive changes rippling through the taxi industry.

Other proposals would set minimum pay levels for all drivers and minimum fares, which are now regulated for traditional cabs but not their multitudes of new competitors.

The legislation is a reaction to stories of financial hardship told by drivers, who complain that there are so many Uber cars on the road now that it is getting hard for anyone to make a decent living.

“There has to be a pause button that’s going to give people some breathing room,” said Bhairavi Desai, of the New York Taxi Workers Alliance.

City Council Speaker Corey Johnson said lawmakers aren’t against the ride-hailing newcomers. “We think they’ve actually filled a need,” he said. But he said better regulation is needed.

For generations, taxi drivers in New York were protected by rules restricting competition. Around 13,500 yellow cabs had the special licenses, called medallions, needed to pick up passengers on the street. Several thousand more drivers worked for black car companies that dispatched vehicles by phone, mostly in the outer boroughs of Bronx, Queens, Staten Island and Brooklyn, where yellow cabs generally wouldn’t travel.

That system was smashed when the city began allowing passengers to use smartphone apps to hail cars almost anywhere.

The change kicked off a dizzying increase in the number of car service drivers from about 65,000 in 2015 to 100,000 now.

One unforeseen development has been plunging value of the traditional taxi medallions. As recently as four years ago, they were changing hands at prices reaching $1 million. They were considered such a ticket to guaranteed income, banks allowed owners to borrow huge sums against them for home mortgages or school loans.

Now, many of those loans are coming due. Drivers no longer have the income to pay them off. And with medallions now trading at $200,000 or less, owners don’t have the collateral to refinance.