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New York extends freeze on new Uber and Lyft drivers

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  • New York City is prolonging a temporary freeze on new ride-hail vehicles, in part to gain higher pay rates for existing drivers.
  • The city is also limiting how long drivers can cruise Manhattan streets without a passenger.
  • Both measures also aim to reduce traffic in the city's crowded central area.
  • Lyft calls the driver cap "misguided," and Uber is suing New York City over it.

New York City is extending a cap on the number of cars allowed to drive for ride-hailing apps like Uber and Lyft, Mayor Bill De Blasio announced Wednesday. The city is also imposing a new limit on how long a driver can cruise around Manhattan without a passenger, a change the mayor said would cut congestion in the city's central area.

The city first capped the number of new vehicles allowed to drive for the services last August in a move to boost drivers' pay to at least $17.22 per hour. The cap (which does not include handicapped-accessible or electric vehicles) will now be extended for another year, until August 2020. The city's taxi regulator will put out specific rules later this summer on the cap and the limit on driving without passengers, the mayor's office said.

The explosive growth of drivers in the city has become "absolutely unsustainable," Deputy Mayor Laura Anglin said Wednesday. Eight taxi and app drivers have committed suicide in the past year, many saying they were no longer able to make a living driving after Uber and Lyft pushed down prices.

"The right to stable and livable income should be a standard in this industry -- and that's only possible with a permanent cap" on for-hire vehicles, Bhairavi Desai, executive director of the New York Taxi Workers Alliance, said in a statement. "Uber and Lyft and their cohorts created a race to the bottom, filling our streets with so many vehicles that no driver could get enough fares to make a living."

"A new medallion system"

The two ride-hail companies decried the city's move, saying it would drive up the barriers to entry for new drivers. "The cap is going to create a new medallion system, essentially a permanent underclass of drivers who are forced to rent in order to drive," a spokesperson for Uber said.

A Lyft spokesperson called the move "misguided," saying "further restrictions on rideshare will result in fewer rides and lower earnings." 

Brary Guerrero, a driver with Uber for seven years, said he supports a limit on the number of ride-hail drivers but prefers to do it through a different method than the city is using. Guerrero pays $375 a week to lease a car that's licensed as a for-hire vehicle. By the time Guerrero tried to register a car he owned as a for-hire vehicle, the city was no longer issuing new registrations. "I missed my chance," he said.

Uber and Lyft both stopped signing up new drivers at the end of April to meet what they said was lower demand. Uber is currently suing the city over the cap on drivers, while Lyft is suing over the new pay standard.

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