Uber Armistice: De Blasio Backs Away From Plan to Cap the App

The Great Uber War of 2015 is over. For now.

Uber charges passenger 16K for a 30-minute ride (Photo: Bloomberg/ Getty Images)
The Uber app. (Photo: Victor J. Blue/Bloomberg via Getty Images) (Photo: Victor J. Blue/Bloomberg via Getty Images)

In an abrupt about-face, the de Blasio administration is backing away from a plan to cap the growth of e-hail giant Uber (UBER).

Sign Up For Our Daily Newsletter

By clicking submit, you agree to our <a rel="noreferrer" href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime.

See all of our newsletters

Under the agreement, first reported by the New York Times today, the city will conduct a four-month study on the effect of Uber and other for-hire vehicle operators on the city’s traffic and environment. While the deal doesn’t rule out a cap further down the road, the city will not implement one before the end of the study.

“Today the administration, City Council and Uber have agreed to a framework that will advance the city’s vital policy goals for passengers, drivers and the public. It sets in motion a plan to guide a comprehensive and fair public response, driven by data, to the increase in for-hire vehicles. And it ensures that the future growth of this industry matches the values and the interests of New Yorkers,” Deputy Mayor Anthony Shorris, who is running City Hall’s operations while Mayor Bill de Blasio" class="company-link">Bill de Blasio is abroad, said in a statement.

The study, Mr. Shorris said, will be conducted over four months ending in November that will examine the impact of Uber and other e-hail apps on traffic congestion on city streets. Uber will share more information than was requested under the proposed bills, Mr. Shorris said, and will not grow at a faster rate than it is now.

“Uber has also agreed to maintain its approximate current rate of growth and not flood the streets with new licenses and vehicles,” Mr. Shorris said.

Uber also confirmed the deal to work together on a traffic study without any cap.

“We’re pleased to have reached an agreement with Mayor de Blasio’s administration and the City Council to collaborate on a joint transportation study and to work together on ways to continue expanding economic opportunity, mobility and transportation access in the city. We are pleased new drivers will continue to be free to join the for-hire industry and partner with Uber. Together, we can build an even better, more reliable transportation system,” general manager Josh Mohrer said.

The City Council bill, which was to come to a vote as early as tomorrow—and which its main sponsors and a Council source insisted had enough votes to pass—had called for a cap on the company’s growth at 1 percent. A separate bill would have commissioned a traffic study, and that legislation will still be voted on—adjusted to reflect the faster timing of the deal reached today.

A spokesman for Mr. de Blasio, Wiley Norvell, told the Observer that Uber reached out to Mr. Shorris last night seeking a meeting today—the first contact between the company and City Hall since Tuesday. The meeting, also attended by senior council staff, was held this afternoon at Council offices across the street from City Hall, according to a Council source.

At the meeting, the group discussed the framework outlined today, which Mr. Norvell said was roughly the same as City Hall had offered Uber a week ago—before the company blasted the airwaves with ads bashing Mr. de Blasio. Mr. Norvell said that Uber wouldn’t agree to the deal a week ago unless the cap was permanently off the table, but agreed to the deal today, even though the city has leave to re-visit the cap.

A source close to the speaker, meanwhile, said Ms. Mark-Viverito’s office was key to the negotiations, and that—despite her earlier words of support for the legislation—she didn’t want to force a cap when there was an option to collaborate on a traffic study.

In a statement, Ms. Mark-Viverito praised the deal as meeting the Council’s original goals and said she looked forward to a “partnership” with for-hire vehicle operators.

“All along, the goal has been to thoughtfully address the impacts of the explosive growth in the for-hire vehicle industry and it has become clear that we can achieve this through cooperation between the city and the industry in the interest of a range of New Yorkers – among them, drivers, passengers and environmental advocates,” she said.

Earlier this afternoon, Councilman Stephen Levin, a sponsor of one of the bills, told the Observer he expected a vote on both bills tomorrow. He appeared alongside another top sponsor, Councilman Ydanis Rodriguez, at a 1 p.m. rally where Mr. Rodriguez said the Council had the votes to pass the bill and would vote on it.

After Mr. Shorris’ announcement, Mr. Levin told reporters he did not know about the final deal when he appeared at the rally this afternoon, though he said there had been “pretty consistent communication” with the mayor’s office.

“I think that there were continued conversations between the administration, the Council, and multiple interested parties,” he said when asked what changed after the rally. “I think everyone wanted to get to a point where as many people were comfortable as possible.”

Asked whether the mayor’s office was big-footing the City Council, Mr. Levin began with, “I don’t know.”

“One issue that we took seriously but we’re continuing to look at is like what would happen as a result of this in terms of unintended consequences and that’s an area where there was certain things that we wouldn’t necessarily know what would happen as a result of the cap,” Mr. Levin continued. “Ultimately, I think that this is going to produce more information than what was previously considered.”

Mr. Rodriguez framed today’s deal as a victory—saying in a statement the study legislation would move forward and happen even more quickly, even if the cap was off the table.

“Throughout this process I have been confident that we had the votes to pass the entire legislative package and I am steadfast in that position,” Mr. Rodriguez said in a statement. “However, it has long been a priority of mine to ensure that the voice of all stakeholders are heard and that the decisions of the Committee are the best for our city. With this decision we have integrated the priorities of all involved and achieved those goals and frame future policy decisions.”

Previously, Mayor Bill de Blasio and City Council allies had maintained Uber’s rapid growth needed to be curtailed immediately because it was contributing to rising congestion on city roadways. Mr. de Blasio was locked in a bitter battle with Uber, pitting some progressives against a company that enlisted veterans of the Obama, Bloomberg and Cuomo administrations to wage an effective public relations war against City Hall. Comptroller Scott Stringer and other prominent Democrats had also come out against the mayor’s plan this week.

On NY1 this afternoon, Mr. Cuomo thanked Mr. Stringer and others opposed to the cap for leadership.

“You are providing jobs to people who need jobs,” Mr. Cuomo said of Uber. “Why would we want to be stopping jobs for working people, minority people, and you’re providing access to neighborhoods.”

In recent days, celebrities including Ashton Kutcher and Kate Upton slammed Mr. de Blasio on social media for seeking to curtail Uber, as several cities in Europe have done. While Mr. de Blasio criticized Uber for their lax workplace protections and even servicing a wealthier clientele than they claimed, the company used to slick TV ads to charge that the liberal Democratic mayor was taking away jobs from minorities and low-income New Yorkers. They also chided him for doing the bidding of the yellow taxi industry, which directly competes with Uber.

The decision to delay a cap on Uber’s growth is a tremendous victory for the young company. Mayors across the country may shy away from trying to regulate the Silicon Valley darling.

This story has been updated with comments from lawmakers, the mayors office and others.

Uber Armistice: De Blasio Backs Away From Plan to Cap the App