Uber hits roadblock in ritzy N.Y. vacation spot

Uber has hit a roadblock in New York's exclusive summer vacation spot, East Hampton, and the company has pulled its services there, reports CBS News correspondent Michelle Miller.

"They are trying to intimidate us, and we're not going to be intimidated," East Hampton town supervisor Larry Cantwell said.

Legions of Uber drivers descended upon the tiny Long Island enclave of East Hampton as far back as 2012 looking for easy money. Residents complained and now Cantwell is laying down the law.

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Cab companies operating in East Hampton are now required to have a business address there. But most Uber drivers, with their unique business model, aren't faring well under this new law. Dozens were fined a few weeks ago for operating without a proper license.

East Hampton says they decided to act because Uber drivers were clogging their streets, but for a town that relies on accommodating visitors during the high season, denying them a service they're used to has already caused a headache.

"Uber needs to comply with the local laws like every other operator in East Hampton," Cantwell said.

He said the laws are not directed toward Uber in any way, but Uber NYC general manager Josh Mohrer disagrees.

"It isn't a matter of, well, Uber drivers have to be licensed, it's a matter of the way the rules are, it's basically impossible for us to do so," he said.

Rather than comply, last Friday Uber hit the brakes, blocking access to their app within the town limits, sending emails urging its customers to complain.

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"We had something like 15,000 riders last summer. There's clearly a need for the service," Mohrer said.

Even Cantwell recognizes its appeal.

"Uber's a very popular service and people use it all over the country, so you know, it's very effective, very efficient and it certainly has a strong customer base," he said.

Two-hundred-thirty licensed taxis service 20,000 yearlong residents in East Hampton, but during the summer months, the population more than triples.

Uber says their drivers decrease congestion, lower prices, and take potential drunk drivers off the road.

"Suffolk County has the most incidents of drunk driving in any state in recent years, and we think that this is an important measure -- having reliable transportation can save lives in places like East Hampton," Mohrer said.

But taxi owner Ted Kopoulos said everyone should play the same rules.

"We spent a lot of money here to have license for our vehicles, to maintain -- Uber jumps in and they spend nothing," Kopoulos said.

Mohrer said they had no problem with a previous law.

"We want to find a path to getting licensed, and the old schemed worked. It wasn't easy, but we were able to do it. The new licensing scheme makes it virtually impossible for us to be licensed at all," Mohrer said.

As for town supervisor Cantwell, he's not holding his breath for a change anytime soon.

"Uber is the one who decided to pull out of the market and I think that's very unfortunate," he said.

Uber said its lawyers have been reaching out to the town daily to see if public outcry has forced any change of heart, but New Yorkers aren't completely out of luck. Blade, an Uber-like helicopter service, will still fly them to the Hamptons for as little as $600.