Uber in NYC: City Council proposes congestion study that would cap Uber’s growth, calls it research.

New York City Legislators Want to Impose an Uber Cap. They’re Calling It a “Study.”

New York City Legislators Want to Impose an Uber Cap. They’re Calling It a “Study.”

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Commentary about business and finance.
July 1 2015 5:54 PM

Uber’s Going to War With New York City. Again.

And this time, the ride-hailing service really, really has a point.

Uber's general manager for New York, speaks to the media while U,Uber's general manager for New York, speaks to the media while Uber riders and driver-partners.
Josh Mohrer, Uber’s general manager for New York City, speaks at an Uber-assembled rally outside of City Hall on June 30, 2015.

Photo by Eduardo Muñoz/Reuters

Oh, to be Uber in New York City, where someone is always mad at you. It’s natural that the taxi industry, which doesn’t take kindly to being “disrupted,” is a constant source of that ire. But sometimes it also comes from other parties—like Uber’s own drivers, and local regulators. So it’s no shock that on Tuesday, shortly after beating down a stringent proposal on updates to apps, Uber was already back on the defensive, this time to fend off a New York City Council bill that could bring its growth to a screeching halt.

Alison Griswold Alison Griswold

Alison Griswold is a Slate staff writer covering business and economics.

The proposal, from council members Stephen Levin and Ydanis Rodriguez, is to cap the growth in for-hire vehicles in New York City for roughly a year in order to study how their rapidly swelling numbers are affecting congestion and the environment. Since 2011, 25,000 new FHVs—a category that includes black cars, luxury limousines, and app-based ride services like Uber—have registered with New York City’s Taxi and Limousine Commission. Of those, 18,000 are affiliated with Uber, which would see its growth restricted most severely in percentage terms under the proposal. “It should come as no surprise to anyone here that the growth of the FHV sector coincides directly with the entry of app-based FHV companies to this transportation market,” Rodriguez, who chairs the council’s transportation committee, said at City Hall on Tuesday.

The bill’s supporters are adamant: The sudden spike in FHV registrations—which, implicitly, means in Uber cars—is hurting New York City. Traffic is slowing. Harmful emissions are increasing. Congestion is getting worse. While FHVs have long outnumbered yellow cabs in the city, as of March there were officially more Ubers than taxis. To accurately assess the extent of this harm and conduct a properly controlled study, those in favor of the bill say, a cap on FHV growth is necessary. “This increase is something we must evaluate and study ... before even more cars are added to our roads,” Rodriguez said.

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Data from the New York Taxi & Limousine Commission. No data available for 2005. Chart by Alison Griswold.

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But Uber is equally adamant and far more scathing. “The rationale for this study is at best questionable, and at worst negligent,” Michael Allegretti, Uber’s senior manager for public policy in New York, told the legislators. “The vehicle limits that accompany this study have nothing to do with congestion and air quality, but everything to do with limiting competition. The Committee for Taxi Safety offered a hauntingly similar proposal three months ago. Let’s acknowledge what’s really going on.”

As with most Uber battles, the company is waging a multipronged assault on this latest threat to its business. While the hearing dragged on inside City Hall, Josh Mohrer, Uber’s general manager for New York City, delivered his own speech on the steps outside at a “rider and driver rally” the company was offering free rides to and from. The proposed bill “would kill 10,000 jobs, increase wait times when you request a ride, hurt service in the outer boroughs, and basically end Uber as you know it,” Mohrer said. “We need you to make your voice to your elected leaders heard,” he continued, in a familiar Uber refrain. “Call them, email them, send them a tweet.”

While the grassroots-style call to action has carried Uber to political victories in other cities, it seems unlikely to work in New York, where residents have plenty of transportation options and are less inclined to get riled up over proposed regulations of just one of them. To wit, despite the free ride offer, turnout to the rally was poor, with most of the crowd appearing to be journalists or Uber employees. After Mohrer finished speaking, some of those employees milled about trying to hand out the Potbelly sandwiches they’d purchased for supporters. Unsuccessful, they instead offered the unclaimed food to tourists.

But Uber has something else going for it: that for once, a proposal it’s denounced as at best questionable and at worst negligent really does seem to be at best questionable and at worst negligent.

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Given how insistent they are that a cap on growth is necessary to conduct an effective study, the bill’s proponents are remarkably short on details as to what, exactly, that study would look like. “We need to get an expert to come out and do the study and spend the time that they need so they can have real numbers, real suggestions on how to work on the congestion,” Rodriguez tells me after the hearing. “It’s something that everyone agrees on—that in Manhattan, especially in midtown Manhattan, there’s a lot of congestion,” he continues, going back to the growth numbers in FHVs when I ask what data points he’s basing this assessment on. Who will the expert be? They don’t know yet. Why will the study take a year? Well, it might not. How were the percentage caps in the proposal set? Unclear, but Rodriguez is “open to working with the industry” on adjusting them. “First we’ll focus on the bill, and then after the bill is passed we’ll figure out the details,” he says.

If you’re Uber and stand to lose thousands of prospective drivers from such a study, all of that is hardly reassuring. The company’s specific claim that it would “kill 10,000 jobs” is almost definitely overstated and depends largely on how you’re defining “job.” But as Uber points out, there’s little to no precedent for implementing a cap on growth, as none of the 25 past transportation studies listed on the New York City Department of Transportation’s website imposed similar freezes on their subjects. And although the complaints about congestion are focused on midtown Manhattan, Uber’s largest growth in rides is coming in New York’s outer boroughs, which have historically been underserved by the taxi industry. Of the 18,000 vehicles Uber has registered, the company also estimates that 6,000 or so transferred from existing bases, meaning the company’s net addition to city streets is closer to 12,000. On top of that, most taxis are on the road throughout the day, while the median Uber driver in New York City works far less—29.5 hours a week, according to UberX data from late June.

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Courtesy of Uber

What’s worse is that the proposal seems to reveal a basic lack of understanding on the part of its sponsors about what causes congestion and how to study it. “Congestion in New York, and I think they really mean congestion in Manhattan, is due to several forces,” says Mitchell Moss, director of New York University’s Rudin Center for Transportation. Those forces include surging numbers of trucks making deliveries from Amazon and other on-demand platforms; a huge growth in intercity buses and tour buses; and a vast amount of street space that’s been converted to bus lanes, bike lanes, and pedestrian plazas. Last fall, New York City also cut speed limits on 90 percent of streets to 25 mph from 30 mph. “There’s a failure to understand that congestion is a part of New York’s lifestyle,” Moss says. “It’s not something we should be surprised at, and Uber certainly is not driving around cruising as taxis are, so I think that we shouldn’t assume that Uber is causing more congestion than taxis.”

The point is that there’s nothing wrong with wanting to study congestion—or even congestion due to FHVs. But you can’t do that just by capping the number of FHVs for a year and figuring out the details later. Because all the other forces that influence congestion—the trucks, and the buses, and the bike lanes, and the Amazon deliveries—are going to keep changing. It’s almost like saying, Hey, we have this really complex system with dozens of variables, so let’s just control one, ignore the rest, and if anything changes maybe we’ll attribute it to the one variable we controlled for.

Research doesn’t work like that. And New York City’s transportation industry shouldn’t have to suffer while its legislators figure that out.