De Blasio Scraps Plan to Curb Uber’s New York City Growth After Backlash

New York City Mayor Bill de Blasio speaks during the Police Athletic League December Luncheon in Manhattan, December 22, 2014 in New York City.

Photo by Kevin Hagen-Pool/Getty Images

New York Mayor Bill de Blasio dropped a proposal to cap the growth of ride-hailing service Uber Technologies Inc. after the plan ignited a backlash from the company, its allies, Governor Andrew Cuomo and even model Kate Upton.

Uber agreed to provide data for a four-month study on the impact of cars on traffic congestion and the environment in return for the administration agreeing not to cap its growth during the study, said First Deputy Mayor Anthony Shorris.

“These elements represent a smart and fair way to address the issues posed by the FHV industry in New York,” Shorris said in a statement, referring to for-hire vehicles. “The City’s goals and obligations are clear -- protect the public, encourage growth and innovation, and keep New York City moving.”

The City Council had been expected to take up two bills related to the plan as soon as Thursday. One would have restricted the growth of fleets with 500 or more cars to 1 percent while officials studied congestion, a report that would have been due April 30. Under the agreement announced Wednesday, the legislation before the council will be put on hold during the study.

“Together, we can build an even better, more reliable transportation system,” Uber spokesman Josh Mohrer said in a statement. “This is great news for all New Yorkers, including Uber riders and drivers.”

The plan pitted de Blasio, who is backed by the yellow-taxi industry, against Uber, which has grown to include 19,000 vehicles and is expanding about 3 percent a month. While the limit would have affected all for-hire ride services, including traditional black-car companies like Carmel and Dial 7, the biggest loser would have been San Francisco-based Uber.

Cuomo Feud

The capitulation is a blow to de Blasio, who has been attacked by Uber in television advertisements for supporting the plan that the company warned would double or triple wait times and cause the loss of 10,000 jobs. It also marks a loss for the mayor in his continuing feud with the governor. The state’s top two Democrats have been sniping off and on the record about topics ranging from schools, general political acumen and now transportation.

Cuomo said in a radio interview Wednesday that the Uber measure would not have alleviated traffic and could have had statewide ramifications as Uber drivers left the city for neighboring counties.

“Uber is one of these great inventions, startups, of this new economy and it’s taking off like fire to dry grass and it’s giving people jobs,” Cuomo said. “I don’t think the government should be in the business of restricting job growth.”

Kate Upton

Celebrities including Ashton Kutcher and Upton joined the chorus of complaints.

“Why do you want to return to the days when on only those in Midtown & Lower Manhattan could get a ride?” Upton tweeted to the mayor -- and her 2.1 million followers.

The growth of Uber, which began operating its mobile app-based service in the city in 2011, is part of a boom in for-hire vehicles, which have ballooned 66 percent to 63,000 since 2011. City officials say that without regulation, the number could surge to 100,000 in five years.

The proposed legislation became the latest front in a battle between the traditional taxi and limousine industry, which gave de Blasio’s 2013 mayoral campaign more than $500,000, and digital ride-sharing companies like Uber and Lyft Inc. The taxi industry also donated more than $150,000 to council members, including more than $27,000 this year to council Speaker Melissa Mark-Viverito. Ydanis Rodriguez, chairman of the Transportation Committee and an outspoken critic of Uber, received $8,500 in 2013.

Uber executives say the planned council action would have threatened its business model. The company’s television ads depicted de Blasio as captive to campaign donors.

“Tell Mayor de Blasio: You promised to end income inequality,” the ads say. “Don’t put taxi donors ahead of jobs.”

De Blasio fired back, equating Uber to multinational companies like Wal-Mart Stores Inc. and saying unchecked growth could make the jobs Uber is bringing to New York less valuable as the battle for fares intensifies.

“There’s a lot of people in the private sector who’d like to have no government regulation whatsoever, but that’s always proven to be a huge mistake,” de Blasio said July 20.

This isn’t the first time the mayor has gone after the company. In May, he backed a plan to require Uber, Lyft, and other ride-hailing services to get approval for changes to the user interface on smartphone apps. The city dropped the plan after a backlash from technology companies, including Facebook Inc.

Founded five years ago with venture capital funding, Uber has grown to serve more than 300 cities worldwide, stirring conflict with traditional taxi and car-for-hire businesses. It has said its market value is $50 billion.

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