New York, Uber call a truce ahead of council vote

Last Updated Jul 22, 2015 5:03 PM EDT

New York City and Uber have struck a deal on the eve of a City Council vote that could have placed a cap on the number of cars the ride-hailing company can have on the streets of the nation's largest city.

Mayor Bill de Blasio's administration announced Wednesday that Uber agreed to a four-month study on the impact of the cars on traffic and the environment. Under the deal, the city will not cap Uber growth during those four months.

The agreement averts a vote by the City Council, which had been expected to pass judgment Thursday on the de Blasio administration's plan to curb the number of vehicles Uber is allowed to have on city streets.

"We're pleased to have reached an agreement with Mayor de Blasio's administration and the City Council to collaborate on a joint transportation study and to work together on ways to continue expanding economic opportunity, mobility and transportation access in the city," said Josh Mohrer, general manager of Uber NYC, in a statement. "We are pleased new drivers will continue to be free to join the for-hire industry and partner with Uber."

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Citing concerns over congestion, De Blasio's administration had proposed requiring the Taxi and Limousine Commission to restrict the issuance of new for-hire vehicle licenses. That would have limited Uber's growth at 1 percent over the next year, allowing it add no more than about 200 drivers.

Uber, whose explosive growth since launching in 2009 now values the venture capital-funded startup at around $40 billion, has grown increasingly popular in New York, with an estimated 25,000 cars on the streets. By comparison, the city's yellow taxi fleet numbers about 13,000.

Uber executives and de Blasio's administration have conducted an unusually fierce war of words, with the company running full-page newspaper ads attacking his plan and organizing protests in front of City Hall in downtown Manhattan.

But the hostilities were set aside to announce the surprise arrangement, which also includes commitments from Uber to make more of its vehicles handicap-accessible and to turn over data to the city on the location and duration of its rides.

City officials said the deal was reminiscent of what the de Blasio administration offered Uber early in the negotiating process. They said a cap could still be imposed if Uber reneges on the agreement.

"Uber has also agreed to maintain its approximate current rate of growth and not flood the streets with new licenses and vehicles," said New York First Deputy Mayor Anthony Shorris in a statement, noting that the growth cap bill would be shelved while the city conducts the traffic study.

Though most observers believe the City Council legislation would have passed, the de Blasio administration's position appeared to weaken as Uber unleashed its ad campaign, depicting the mayor as too influenced by the yellow taxi industry, which ranks among his biggest donors.

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Gov. Andrew Cuomo and other public officials also called for the council to delay the vote.

The ride-hailing service, which provides cars summoned by smartphone app, attacked the mayor even in the hour before the deal was announced, saying his central argument -- that Uber is a leading cause of traffic -- was not true.

Yellow taxis make 90 percent of their trips in Manhattan, according to city officials. Uber released data that it said showed a far lower percentage of its rush hour trips began there.

Uber officials also said it has an hourly average of just under 2,000 cars in the city's central business district during the day, a far cry from the huge number of yellow taxis that operate there. The company's seemingly ubiquitous ads also touted its service to minority riders in outer boroughs - de Blasio's political base.