New York City pushes limits to Uber in effort to reduce congestion

NEW YORK - So many New Yorkers are signing up with Uber Technology that Mayor Bill de Blasio and City Council members blame the company and other ride-sharing services for clogging Manhattan's streets and air.

The mayor and the City Council want to slow the growth of the upstart app-based industry for about a year, giving them a chance to study its environmental impact. The council held a hearing on the proposal Tuesday that featured heated exchanges between members and Uber officials who say the city is trying to quash competition in a business that has grown 66 percent since 2011.

It's the latest salvo in a fight between the traditional taxi and limousine industry, which gave de Blasio's 2013 mayoral campaign more than $500,000, and digital ride-hailing companies like Uber and Lyft. The taxi industry also donated more than $150,000 to council members, including more than $8,500 to Ydanis Rodriguez, chairman of the Transportation Committee, who said Tuesday that the growth limits would be imposed.

"We are facing 2,000 more cars coming onto our streets every month, overwhelmingly in the most congested and crowded areas of Manhattan," said de Blasio spokesman Wiley Norvell. "It's good public policy to temporarily manage that influx of new vehicles so we can fully assess its impact on traffic and air quality."

Last month, the administration and the ride-sharing companies battled over a Taxi and Limousine Commission effort to require approval of any new app used to hail a ride. That effort ended with the city capitulating after 27 Silicon Valley companies - including Google Inc., Yahoo! Inc. and Facebook Inc. - accused the mayor of trying to harm the city's burgeoning technology industry.

The fight mirrors a global debate over how to regulate companies like San Francisco-based Uber, which has grown to include 160,000 drivers in 45 states. In Paris on Monday, police arrested two Uber executives on suspicion of operating an illegal cab company after French taxi drivers blocked airports and burned tires, protesting that Uber drivers don't pay the 100,000 euro ($112,000) license fees that taxi operators do.

"Everyone wants less congestion and cleaner air, but this process makes a mockery of these issues - manipulating them to do one thing: stifle competition," Michael Allegretti, Uber's senior manager for public policy in New York, told the council.

Uber held a rally outside City Hall Tuesday, after which yellow-cab drivers staged a counterprotest.

There are 63,000 for-hire vehicles - liveries, black cars and limousines - up from 38,000 four years ago, and city officials say that without a limit, that number could balloon to 100,000 within five years.

Much of the increase comes from the popularity of services that offer smartphone apps that use GPS technology to match drivers with nearby passengers. There are now more than 75 apps providing for-hire transportation in the city, not just by companies such as Uber and Lyft, said TLC Chairman Meera Joshi.

Joshi told council members the city isn't targeting Uber.

"Uber is one of many for-hire-vehicle companies legally operating under TLC licensure, and if enacted, this law would apply to all companies," she said.

The proposed laws would suspend almost all growth in the for-hire vehicle industry through August 2016 while officials study the impact of the growth of the cars on Manhattan's streets. Companies such as Uber, with fleets of more than 500 cars, could increase by no more than 1 percent a year.

"It's reasonable to assume there's been an impact on air quality and traffic, and a study is certainly warranted," said council member Stephen Levin, a Brooklyn Democrat and the bill's sponsor.

The new companies have grabbed as much as 20 percent of the car-for-hire business, according to Ira Goldstein, executive director of the Black Car Assistance Corp., a trade group representing limo drivers.

The traditional companies aren't the only ones worried about Uber. Diana Dellamere, a public-policy executive with San Francisco-based Lyft Inc., said a moratorium would solidify Uber's 90 percent market share, compared with Lyft's 7 percent.

The city Transportation Department says traffic on Manhattan's streets slowed to an average 8.5 mph last year from 9.35 mph in 2010, the year before Uber entered the market.

Whether that's a problem in a city where the mayor this year ordered the speed limit cut to reduce auto fatalities has become a matter of debate.

No matter how much the ride-sharing industry has grown, it's unlikely to have affected traffic flow as much as the installation of pedestrian walkways, bicycle lanes and bike- share racks on what had been parts of streets, said Mitchell Moss, a New York University urban studies professor.

"We should be very careful before we label congestion a problem," Moss said. "Congestion is a sign of success. It's a measure of how much people want to be here."

• With assistance from Julie Verhage in New York.