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Uber’s lawsuit challenging NYC’s cap on new vehicles is dismissed

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Taxi driver groups call it a ‘victory’

NYC First Major City To Attempt To Cap Number Of Ride-Hailing Services Photo by Spencer Platt/Getty Images

Uber’s lawsuit challenging New York City’s first-in-the-nation law capping the number of ride-hail drivers that operate on its streets has been dismissed.

The law, which went into effect August 2018, paused the issuance of new licenses to drivers for 12 months. Uber wanted the law overturned for fear that the city will ultimately make the cap permanent. Those fears are not totally unfounded: this past August, the New York Taxi and Limousine Commission voted to extend the cap another 12 months.

In his decision dismissing the suit, New York State Supreme Court Judge Lyle Frank wrote that he was unpersuaded by Uber’s arguments that the city exceeded its authority in instituting the cap or that the cap would conflict with the state of New York’s recently authorized congestion pricing scheme.

The law was part of a sweeping legislative package passed by the New York City Council in the summer of 2018 to give regulators more control over ride-hailing companies. In addition to the cap, the city council also approved a minimum pay standard among drivers, with the goal of reducing the amount of time drivers spend “cruising” for new passengers. (Uber filed a separate lawsuit against the cruising law, which is still making its way through the courts.)

“We’re disappointed that the TLC’s cap that punishes drivers who are forced to rent vehicles will remain in effect,” an Uber spokesperson said in a statement. The company is still mulling whether to appeal the ruling.

Uber and Lyft both stopped onboarding new drivers earlier this year as a result of the cap and the new wage laws. Uber argues that the cap forces drivers to rent vehicles, enriching fleet owners, and costing drivers thousands of dollars a year.

But taxi driver groups declared the ruling a victory. “This cap has been life saving and the basis for any group of drivers — Uber or yellow cab — to come out of poverty and instability,” New York Taxi Workers Alliance director Bhairavi Desai said in a statement. “Uber and Lyft have saturated the streets on drivers’ backs. They lost on this issue and need to stop wasting everyone’s time and money fighting it.”