New York City just voted to cap the number of Uber and Lyft drivers and will enforce a minimum wage for drivers

shutterstock/MikeDotta

Uber car service on the streets of New York

• The New York City Council just voted 36-6 to require ride-hailing apps like Uber and Lyft to pay their drivers minimum wage, and will prohibit them from hiring new employees for a year.
• The year-long halt on new driver hires will go into effect 120 days after the bill becomes a law.
• Uber was also recently required to classify NYC drivers as employees, rather than independent contractors, after the New York Unemployment Insurance Board ruled that Uber must provide unemployment benefits.
• Councilmember Adrienne Adams said that 85% of ride-hailing drivers currently earn less than minimum wage.

In a blow against Uber, Lyft, and other popular and fast-growing ride-hailing apps, the New York City Council just voted 36-6 to require ride-hailing services to pay their drivers minimum wage, and to halt all new driver hires for a year, Outline reports.

The council met Wednesday to vote on the legislation, which Uber rallied against in a social media ad campaign, titled #Don'tStrandNYC.

The halt on new driver hires will begin 120 days after the bill goes into effect. The estimated 80,000 ride-hailing drivers in NYC had not previously been covered under the city's minimum wage of $13 per hour, and councilmember Adrienne Adams said that 85% of ride-hailing drivers currently earn less than minimum wage.

Councilmembers were also concerned with the alarming rate at which drivers are signing up for these services -especially since a recent report indicates that ride-hailing apps are actually making traffic worse, not better. Transportation analyst Bruce Schaller estimated that ride hailing services have resulted in a 160% increase in traffic on city streets. The council's cap on driver hiring is meant to curb this growth.

Uber was also recently in the spotlight in NYC, when the New York Unemployment Insurance Board ruled that Uber must provide unemployment benefits to its drivers, effectively classifying them as employees instead of Uber's preferred classification of 'independent contractors."

In a statement, the Uber-linked local advocacy group Tech:NYC called the measure "a step backwards," saying that diminishing the supply of ride-hailing vehicles won't diminish the demand, resulting in higher prices and longer waits for citizens.

"While there's no doubt City Council means well with this legislation, the truth is it's a misguided solution that'll create more problems than benefits," reads the statement, in part.

Representatives for Uber and Lyft did not immediately respond to a request for comment.