US: Uber sues NYC to get driver cap lifted

Uber, the ride-hailing startup, filed a lawsuit against the city of New York last week seeking to overturn a rule that puts a cap on the number of drivers that work for ride-hailing companies that can operate in the city.

According to a report in The Verge citing the lawsuit, Uber has an issue with the law, which is the first in the country and has been on the books since August, halting the issuance of new licenses to ride-hailing drivers for 12 months. Uber wants the law thrown out, fearing the city could make it a permanent cap.  The New York City Council also signed off in August on a minimum pay standard for drivers.

Backers of the law say it’s needed to enable the city to examine the impact ride-hailing has on congestion in the city, but Uber argues it amounts to a practice of banning first and studying later.

“Rather than rely on alternatives supported by transportation experts and economists, the City chose to significantly restrict service, growth, and competition by the for-hire vehicle industry, which will have a disproportionate impact on residents outside of Manhattan who have long been underserved by yellow taxis and mass transit,” argued Uber in the lawsuit, according to The Verge. “The City made this choice in the absence of any evidence that doing so would meaningfully impact congestion, the problem the City was ostensibly acting to solve.”

Despite Uber and Lyft’s popularity among riders, it has faced a lot of pushback from lawmakers, taxi medallion holders and a host of other groups.  Critics contend Uber and Lyft haven’t had to follow the same laws that taxis do, which hurt competition for taxi drivers. It has also resulted in more drivers than demand, resulting in lower wages and more traffic, noted the report.