NEW YORK–In a move that could remove some of the pressure pushing down the value of taxi medallions–and their collateral value for credit unions that hold medallion loans–New York City is moving to limit the number of vehicles driving for Uber and other ride-hailing services.
The City isn’t acting because it wants to help taxi medallion lenders and borrowers. Instead, it is seeking to do something about growing concerns drivers working for rideshare companies have led to worsening congestion and low driver wages.
The New York Times reported that Mayor Bill de Blasio, while stopping short of fully endorsing the proposal, suggested that the time had come to rein in the industry.
The proposal supported by the City Council speaker, Corey Johnson, would halt the issuance of new for-hire vehicle licenses, except for vehicles that are wheelchair accessible, while the city conducts a yearlong study of the industry, the Times reported.
It is the second attempt by New York City — Uber’s largest United States market — to cap the company’s vehicles after a failed effort in 2015. Since then, the Times reported the number of for-hire vehicles in the city has surged, rising to more than 100,000 vehicles from about 63,000.
“Mr. de Blasio, Mr. Johnson and other elected officials have raised concerns about the decimation of the once-thriving taxi industry and the increasing gridlock on city streets,” the Times reported. “Questions over the impact of ride-hailing services have also become more visceral: Six professional drivers have killed themselves in in recent months, including three taxi drivers.”
Several of the drivers who committed suicide had loans from credit unions.
“The City Council’s Uber cap will leave New Yorkers stranded while doing nothing to prevent congestion, fix the subways and help struggling taxi medallion owners,” said Josh Gold, a spokesman for Uber, told the New York Times. “The Council’s cap will hurt riders outside Manhattan who have come to rely on Uber because their communities have long been ignored by yellow taxis and do not have reliable access to public transit.”