Carlo Allegri/Reuters
- Uber and Lyft are lashing out at New York City regulators for restricting vehicle numbers, hiking minimum wages, and levying congestion charges.
- "The new rules could potentially restrict where, when, how drivers can work and we just don’t think that’s good for New Yorkers," Uber CEO Dara Khosrowshahi said.
- The regulations "create negative consequences for both drivers and riders," Lyft president and co-founder John Zimmer said.
- Watch Uber and Lyft trade live.
Uber and Lyft are lashing out at New York City regulators for continuing to restrict the number of ridesharing vehicles permitted to operate in the city — the latest in a series of regulations on their industry.
"The new rules could potentially restrict where, when, how drivers can work and we just don’t think that’s good for New Yorkers," Uber CEO Dara Khosrowshahi said on the ride-hailing group’s earnings call this week. "Anyone who thinks that the changes in New York City are good, [that’s] malarkey frankly."
The call came after Uber shocked investors by losing more money than expected, sending the shares tumbling.
The city’s Taxi and Limousine Commission voted last year to stop issuing new licenses for for-hire vehicles for 12 months, and extended that cap for another year on Wednesday. It also ruled that in a year’s time, drivers will only be allowed to spend 31% of their time cruising without a passenger below 96th Street in Manhattan, down from 41% currently.
Khosrowshahi said the city was "essentially introducing another medallion system," referring to the set number of New York City taxi licenses available. "That system is ripe for abuse by people in power and it’s happened in the past, and the city could be setting itself up again."
New York City officials have taken multiple steps to regulate the ride-hailing industry. In December, the TLC introduced a minimum wage per trip for "high-volume" drivers that corresponds to $27.86 an hour, or $17.22 after expenses. In April, the city introduced a congestion charge of $2.75 for each trip into the congestion zone below 60th Street in Manhattan.
Uber and Lyft have raised their prices to offset the higher costs.
Lyft is aligned with regulators’ goals of boosting drivers’ earnings and cutting congestion, president and co-founder John Zimmer said on the group’s earnings call this week. However, "We don’t believe the rules as written today do the best for those two aspects," he said. "They actually create negative consequences for both drivers and riders."
"Any increase in prices can lead to a decrease in driver work opportunities because of less rides," Zimmer added. "That’s the point that we’re trying to get across."
Uber is now growing fastest in wealthier areas where consumers can stomach higher fares, Khosrowshahi said. However, demand has stalled in neighborhoods such as Central Harlem and Wakefield, Bronx where poorer residents have been priced out and left with fewer viable transportation options, he added.
Khosrowshahi proposed a "better path forward" would be retaining drivers’ independent status while granting them protections such as "minimum earnings and benefits and a voice in decisions" that affect their livelihoods. "We think it’s a win-win."
See Also:
- GOLDMAN SACHS: These 30 stocks are poised to pop on earnings after a week of brutal trade-war news
- A Wall Street investing guru reveals his 4-part strategy for finding and exploiting market inefficiencies — and making a bundle in the process
- A fund manager who’s crushing 92% of his peers unpacks the blueprint he’s used successfully for 26 years — and shares his advice for surviving stock-market crashes
Source: Business Insider – tmohamed@businessinsider.com (Theron Mohamed)