Is this the end of the golden era of ride-hailing?

New York has just announced a year long cap on new licenses for Uber, Lyft, and others. Is this temporary or will it put an to end ride-hailing services as we know them?
9 August 2018 | 37 Shares

For-hire drivers and their supporters rally in favor of proposed New York City legislation that would put a cap on ride-hailing vehicles outside the headquarters of the New York City Taxi and Limousine Commission, which also houses offices of Uber and Lyft. Source: Drew Angerer/Getty Images/AFP

Do you struggle to book a ride on Uber or Lyft during peak hours? Well, if you’re in New York, you life isn’t going to get any easier.

The New York City Council has just announced a year long cap on new licenses for Uber, Lyft, and other app-based ride-hailing services.

It has also given the city Taxi & Limousine Commission authority to set minimum pay standards for drivers.

According to the Taxi & Limousine Commission, app-based licenses have increased to more than 80,000 from 12,600 three years ago. That’s a compounded average growth rate of 85.17 percent.

The rapid growth has increased congestion in the city and has reportedly increased competition among app-based cabs, Yellow Cabs, black car liveries and luxury limousines, resulting in lower wages for all.

“Hundreds of cab owners couldn’t earn enough to pay their car leases and taxi-license medallions, and economic desperation became a factor in at least six driver suicides since November. About 85 percent of drivers for app-based companies earn less than US$17.22 an hour,” found Bloomberg.

Over the next 12 months, as the cap is in place, city regulators are expecting to study the economic and environmental impact of the ride-hailing industry.

Ride-hailing: Bane or boon?

Well, for each individual consumer, it seems as though ride-hailing is a boon because of the convenience and ease of use it offers.

However, is it really great for the city? As New York regulators study it over the next year, what are they likely to discover? Evidence from studies conducted previously suggest there’s nothing good to find.

A study by the University of California-Davis (UC Davis) Institute of Transportation Studies found that after adopting ride-sharing services, there was a net 6 percent decline in transit based on survey respondents’ changes in travel behavior.

The UC Davis study also found that if ride-sharing had not been available, up to 61 percent of trips would not have been made, or would have been by walking, biking or transit.

Schaller Consulting, a specialist in urban transportation policy recently issued a study The New Automobility: Lyft, Uber and the Future of American Cities. That too, suggests that ride-hailing clogs cities up unnecessarily.

It claims that private ride services such as Uber and Lyft put 2.8 new cab miles on the road for each mile of personal driving removed, for an overall 180 percent increase in driving on city streets.

It concurs with the UC Davis study stating that about 60 percent of ride-hailing service users in large, dense cities would have taken public transportation, walked, biked or not made the trip if TNCs had not been available for the trip. The remaining 40 percent would have used their own car or a taxi.

Finally, the Schaller study also says that shared ride services such as UberPOOL, Uber Express POOL and Lyft Shared Rides, while touted as reducing traffic, in fact add mileage to city streets. These shared services put 2.6 new app-based vehicle miles on the road for each mile of personal driving removed, for an overall 160 percent increase in driving on city streets.

Other studies and reports seem to have similar findings. It seems as though ride-hailing services are taking users and revenues away from piblic transportation, clogging the roads, and making it difficult for regular cabbies to earn a decent wage.

If that’s what New York city regulators conclude, this could well be the beginning of the end of ride-hailing as we know it.