News & Politics

Why the City Council Is Turning Against Uber

Three years after councilmembers blocked Mayor de Blasio’s attempts to cap Uber drivers, things look very different for the rideshare giant

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Last week, the new Speaker of the New York City Council made a rather startling admission: He made a mistake by not trying to restrain the growth of Uber when he had the chance a few years ago.

“I’ll give myself some demerits for not understanding the depth of this and grasping the issues that we would come to face over three years ago,” Corey Johnson told WNYC radio, speaking of legislation that he refused to support in 2015. “I was skeptical at the time.” But in hindsight, he said, “given what we’ve seen and the explosive growth of this industry and how it’s affected the streets of New York City, I think we should have done more.”

Three years ago, then-Speaker Melissa Mark-Viverito defied Mayor Bill de Blasio’s 2015 drive to put a cap on the number of new Uber drivers. And she wasn’t alone: Most of the other leading politicians in New York, including Governor Andrew Cuomo, sided with Uber over the mayor.

Three years later, much has changed. The council is again considering a series of bills that could potentially kneecap Uber and its competitors, including imposing an annual $2,000 fee on each vehicle or establishing a “growth control mechanism” for for-hire vehicles, asTaxi and Limousine Commissioner Meera Joshi has suggested. And Johnson has expressed his support, tipping his hand in January when he created a new council committee to study regulating for-hire vehicles and tapped a staunch ally of the yellow taxi industry, Ruben Diaz Sr. of the Bronx, to chair it.

Why have Johnson and the council changed their tune? Why are they now embracing legislation they once helped kill?

Uber, as any New Yorker at this point knows, has expanded exponentially. The for-hire industry, which also includes popular apps like Lyft, Juno, and Via, has created unprecedented convenience for anyone fed up with public transit or even walking. On a whim and a swipe, at any time of the day or night, a car can be summoned. There are now more than 100,000 for-hire vehicles on the road, including black cars and liveries — more than double the number from five years ago — and nearly 72,000 are working for app-based services. Last year, Uber trips outstripped yellow taxi trips for the first time. A 2017 report from Bruce Schaller, a former New York City Department of Transportation official and street traffic expert, made clear the obvious: An explosion of for-hire vehicles is creating a traffic nightmare.

Meanwhile, all the other means of getting around the city are slowing down. New York now has the slowest buses in America, according to an analysis from the city comptroller’s office. And as the subway system struggles daily with delays, mismanagement, and disinvestment, commutes by car look ever more attractive — driving a decline in subway ridership and a further increase in traffic. It’s the perfect automotive storm.

De Blasio’s idol, Fiorello La Guardia, confronted a somewhat similar problem in the 1930s when an unregulated taxi industry flooded the streets with new cars. The medallion system was born, capping the number of taxis on the road. Today, there are a little over 13,000 taxi medallions. Once immensely valuable — medallions could sell for more than $1 million a few years ago, and were hoarded by wealthy moguls — medallions now trade for as little as $175,000 in the wake of the rideshare influx.

There will be no tears shed for taxi moguls like Gene Freidman, who rubbed elbows with the city’s elite while running into legal trouble. The taxi industry, an influential lobby that has flooded de Blasio’s campaign coffers with hundreds of thousands of dollars, has been a useful foil for Uber because the medallion system has bred serious income inequality. But there are numerous cab drivers, many of them immigrants, who literally invested their livelihoods in medallions. Their incomes decimated, drivers have begun to kill themselves.

Has all this moved the council to act? Those in the legislative body say so. But there’s also another stark truth: Uber ain’t what it used to be.

The summer of 2015 may have represented, in retrospect, the pinnacle of the rideshare behemoth’s power — at least in the five boroughs. To combat attempts at regulation, Uber hired the most prominent local and national strategists in America to crush City Hall.

There was David Plouffe, Barack Obama’s old campaign wizard; Stu Loeser, Michael Bloomberg’s longtime press secretary; and Bradley Tusk, a former Bloomberg and Chuck Schumer aide who grew rich from owning Uber stock. Not to mention Jimmy Siegel, a Hillary Clinton ad maker, and Patrick Jenkins, a leading lobbyist and close friend of Assembly Speaker Carl Heastie.

Uber ended up spending $1 million lobbying city government to defeat the driver cap bill. A self-professed progressive champion who rode to victory with the support of black New Yorkers, de Blasio was not prepared for Uber’s salvos: TV ads featuring people of color talking about how driving for Uber was a lifeline for them and accusing the mayor of wanting to steal their jobs.

Uber even created a “de Blasio” feature on its app projecting increased wait times for rides if the mayor successfully restricted the number of black cars on the road. Its political team enlisted prominent African American elected officials like Brooklyn Borough President Eric Adams to hammer home the narrative that de Blasio, rather than trying to restrain a corporation worth tens of billions of dollars, was constricting opportunities for black and brown New Yorkers.

Stephen Levin, the Brooklyn councilman who carried the bill attempting to curb Uber’s growth, wasn’t safe either. Uber sent emails to all users of the app in Levin’s district telling them their councilman wanted to take their rides way.

And then there were the celebrities:

Support for the Uber-restricting bills in the City Council collapsed. City Hall retreated. Uber had won.

Three years later, this multipronged offensive has not rematerialized. TV ads, attacking apps, and rallies may still come, but even if they do, Johnson and his council allies have said they intend to pursue bills to contain for-hire vehicles.

Those within politics will tell you Uber has lost its leverage, and they aren’t wrong. Once, like Apple, an unassailable tech brand representative of all that is fresh and desirable, Uber is now struggling to repair its image from a series of missteps and scandals.

There was Uber’s decision to drop prices around JFK Airport in the wake of Donald Trump’s first Muslim ban, undercutting protesting taxi workers; the revelations of Uber’s sexist culture, fueled by toxic machismo; and the ouster of founder and CEO Travis Kalanick. Drivers, meanwhile, called for employee benefits and decried the company’s ongoing exploitation of their labor. Suddenly, #DeleteUber was a movement.

The setbacks are global. London took away Uber’s operating license last fall, though the company continues to operate there while it appeals the decision. In December, the European Union’s highest court ruled Uber should be regulated like a taxi company, not a tech company, siding with Barcelona cab drivers who argued that Uber had an unfair advantage over them because it wasn’t regulated as heavily.

Uber remains popular among its users in New York, and it’s possible the rideshare giant will again try to marshal its user base to beat back City Hall. Yet its relative silence — a striking turnaround from 2015 — and the newly emboldened politicians indicate the fight may look very different this time around.

This time, at least, the celebrities aren’t tweeting about it.

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