New York's City Council, with possible ramifications beyond the livery industry and the city itself, approved a package of bills Wednesday designed to regulate app-based, for-hire vehicles such as Uber and Lyft.
While they aim to curb the effects of the e-hails on city roads while protecting the crumbling taxi industry, they could also establish a marker for congestion pricing and other alternative forms of municipal street management.
The legislation includes a first-in-the-nation freeze on new licenses for such businesses. During the one-year cap, the city's Taxi and Limousine Commission will report quarterly on ridership data, including how often the vehicles are empty of passengers while crowding the streets.
The measure also requires that for-hire vehicles pay their employees the equivalent of a "living wage," or $15 per hour. It also enables the TLC to continue issuing new licenses in areas where transit alternatives are sparse and for handicapped-accessible vehicles throughout the five boroughs.
While pleas from taxi drivers, frustrations over street congestion, underpayment of livery drivers in general and the need for alternatives to a broken-down subway and bus system have sparked high emotions, broader debate over who should pay for local transportation infrastructure -- and how -- has rekindled.
Some council members and transit advocates Wednesday renewed their calls for congestion pricing, a form of tolling in high-density areas of Manhattan.
"The framework within these bills could integrate well with congestion pricing," council member Brad Lander said of a proposal that to date has stalled in the state legislature.
Such a plan would impose tolls in high-density parts of Manhattan. Proponents say the move could help fund the Metropolitan Transportation Authority's efforts to modernize the subway and bus system. More subway breakdowns occurred Wednesday, in the middle of a Northeast heat wave.
"It's wholly consistent, and could connect to a broader plan to improve the transportation landscape," Lander told reporters at City Hall before the council passed the bills, two of the three by 45-0 votes.
Six council members voted against the licensing cap, most citing the void Uber and Lyft fill in outer-borough "transportation deserts."
"People are using app-based services because public transportation has failed them," said Eric Ulrich, whose district spans parts of southern Queens. "The notion of yellow cabs is nostalgic, but it's a declining industry with an outdated business model."
Uber, valued at roughly $68 billion, is considering an initial public offering as soon as next year.
Uber and Lyft usage, once considered the realm of young professionals, has extended to lower-income neighborhoods in New York's outer boroughs.
These commuters "are essentially taking money out of their paychecks to make sure they get to work, which should be a basic service of the state," Howard Cure, director of municipal bond research for Evercore Wealth Management, said on a Bond Buyer podcast.
Mayor Bill de Blasio expects to sign the measures.
"The unchecked growth of app-based for-hire vehicle companies has demanded action – and now we have it," he said right after the council vote. The mayor and council Speaker Corey Johnson have planned a rally for noon Thursday at Union Square Park to celebrate the passage.
The city must absorb about 2,000 new vehicles on its streets each month.
Taxi associations have cited citing drivers' financial problems and even six suicides within the past year.
Uber and Lyft have countered with television advertisements touting themselves as welcome alternatives to a transit system in crisis.
Johnson said an abundance of for-hire cars on city streets is no solution to mass transit problems.
"It's not a fair characterization to think that to solve our way out of the subway crisis is to put more cars on the road," Johnson said.
Nick Sifuentes, the executive director of the Tri-State Transportation Campaign, also called for congestion pricing. "After all, congestion existed long before the first Uber hit the road."
According to Johnson, the new laws reflect input from all stakeholders, including Uber and Lyft.
"Uber and Lyft may not be saying this publicly, but they were part of the process," he told reporters. "They had a seat at the table. We're not doing this as a punitive thing."
MTA officials have cited the growth of app-based livery vehicles for a dropoff in ridership the past three years. Subway ridership fell by 30 million passengers in 2018 to 1.72 billion, officials said at the July board meeting.
The MTA is one of the largest municipal issuers with roughly $39 billion of debt under a variety of credits. Its overall debt total exceeds the amount of tax-backed debt issued by all but four states -- California, New York, Massachusetts and New Jersey.
"Considered another way, MTA’s debt comprises about 1% of total outstanding municipal debt ($3.8 trillion as of March 31, according to the Federal Reserve)," said Janney Capital Markets. "We find few New York investor portfolios without MTA bond positions."