NEW YORK (FOX5NY.COM) - New York City will temporarily cap the number of licenses for ride-hail vehicles, becoming the first American city to restrict the number of those vehicles, many of which are affiliated with ride-share apps such as Uber, Lyft, Juno, and others.
The City Council passed legislation that will freeze new for-hire vehicle licenses for a year so the Taxi and Limousine Commission can do an industry study of how often the cars currently on the streets actually have passengers.
The bill will allow the TLC to issue new licenses for any vehicles that are handicap accessible and also if the commission finds a certain area isn't being served.
An estimated 120,000 for-hire licenses are currently in circulation.
"Our goal has always been to protect drivers, bring fairness to the industry, and reduce congestion," Council Speaker Corey Johnson said.
The council also voted to establish minimum driver pay at $17.22 an hour. The bill's sponsors said that wage could add up to an additional $5,000 a year for struggling drivers who often work 6- or 7-day weeks just to make ends meet.
"The one-year cap maintains our current level and prevents greater saturation of the market," Council Member Stephen Levin, the bill's sponsor, said. "I hear from drivers all across the industries who say that they're driving around for longer, having a harder time getting rides and earning less income."
Many drivers of both yellow taxis and for-hire cars supported the legislation.
A number of councilmembers representing outer borough neighborhoods opposed the bill, saying that the city could return to pre-Uber days when yellow cab drivers were reluctant to leave Manhattan.
"I think my community will be hindered, suffered and not have services that they need," Council Member Inez Barron said.
Ride-share companies vehemently opposed the bill. The companies have said a cap will mean longer wait times and higher fares because of driver attrition.
"This is not just a cap. Around 25 percent of drivers cycle off of ride-sharing platforms annually anyway," Lyft's Joseph Okpaku said. "Without being able to quickly add drivers back on, that is going to result in longer wait times and higher costs."
Mayor Bill de Blasio has indicated he will sign the bill into law.
"Our city is directly confronting a crisis that is driving working New Yorkers into poverty and our streets into gridlock," de Blasio said. "The unchecked growth of app-based for-hire vehicle companies has demanded action—and now we have it."