NEW YORK — Officials here on Wednesday abruptly abandoned plans to rein in the powerful tech and transit company Uber, dropping a fiercely contested proposal to cap the company's growth in its largest market.
New York's city council had planned to vote as early as Thursday on a bill that would have put a "pause" on Uber's rapid expansion while the city studied the impact of new transportation services on congestion. Uber warned that a cap on its growth would have mortally wounded it in its most important market, doubling and tripling wait times, degrading service, and driving away consumers.
Facing what Uber considered an existential threat, the company, valued at nearly $50 billion, deployed a political fury to match it. It ramped up what has already become its famously aggressive tactics, filling New York's airwaves with ads saying Mayor Bill de Blasio wanted to destroy thousands of potential jobs. It suggested, not so subtly, that the bill would harm the very New Yorkers — minorities, the low-income, the outer boroughs — de Blasio championed when he campaigned for mayor two years ago on a progressive lament about “two New Yorks,” one rich, one poor.
Uber's victory is a testament to the depth of the diverse support it rallied — but also a validation of those abrasive tactics.
“This lets other cities know that Uber is not going to be intimidated by municipal governments,” said Mitchell Moss, director of the Rudin Center for Transportation at NYU, “that the days of taxi industry cartels are over, and that meddling with how people get from place to place is not easily done in an age of Internet-based mobility.”
Consumers, in other words, have become too attached to apps like Uber’s that now make ordering a car as easy as two clicks on a smartphone. That base of users has now in many cities proven more powerful than the company’s not insignificant opposition, from traditional taxi providers and labor critics.
As of Wednesday afternoon, as Uber and city officials met following a week of silence between the two groups, the bill’s supporters said they had enough votes to pass it. But while City Hall suggested that threat may have brought Uber back to the table, the company's campaign had successfully made the cap's supporters appear as if they were on the wrong side of innovation, jobs and even minorities. By Wednesday, several prominent Democrats, including the city's comptroller and Gov. Andrew Cuomo, had come out against the bill.
In the last-minute deal, the city agreed to table the legislation but will still conduct a traffic study through November, with Uber's cooperation. The company will also share more data than it had previously agreed to. The agreement additionally calls for Uber to maintain its current rate of growth in the city, and not "flood the streets" with even more new drivers.
The last-minute deal will now send a very different signal to other cities than one New York's city council might have telegraphed had it passed the cap: Uber, which looked headed for a major defeated, got what it wanted, again.
The city cautioned, though, that it could consider a cap again in the future, even as it takes the threat off the table now.
“If the study determines that the growth of this sector is having a significant impact on traffic — and then identifies either a growth rate or a limitation that’s necessary to prevent those negative externalities — the city certainly reserves that right,” said Wiley Norvell, a spokesman for de Blasio’s office. “This legislation is only tabled. Some other configuration could be adopted.”
The deal ended a chaotic week in which Uber personally targeted de Blasio and several city council members. Uber rallied its users, as well as its nearly 26,000 local drivers, to barrage their elected officials opposing the legislation. It papered parts of the city with leaflets attacking officials who supported the bill. It took out highly produced TV ads targeting de Blasio for choosing his “big taxi donors” over local New Yorkers who just want rides to work and decent jobs.
In New York, more than 2 million people have signed up for the app since Uber entered the market in 2011. This past week, that has also meant that the company has had more than 2 million New Yorkers at hand — a mass text, email or robocall away — for its political organizing. That’s a number, Uber officials pointed out, that far surpasses the 280,000 New Yorkers who voted for de Blasio in his primary victory two years ago.
After the agreement was reached Wednesday afternoon, Uber pulled all of its ads in New York and halted its email campaign with riders in mid-stream. It also quickly removed a "de Blasio" feature on its app that warned of how service in the city would look if the legislation passed.
Uber itself was uncharacteristically quiet after the victory, after loudly welcoming the conflict. It released only a one-paragraph statement from New York General Manager Josh Mohrer saying that the company was “pleased” drivers will continue to be able to join its platform. “Together, we can build an even better, more reliable transportation system,” Mohrer said. “This is great news for all New Yorkers, including Uber riders and drivers.”
The cap in question would have limited Uber to adding only about 200 new drivers in New York by the end of the year. Uber has insisted that it needs closer to 10,000 new drivers by year's end here to keep up with rising demand in a city where about 25,000 new users are signing up each week.
Many workers in the taxi industry — as well as some of Uber’s own drivers — supported the cap out of concern that the city has already become flooded with too many professional drivers.
“It’s just a really sad day when a corporation can throw its billions around to basically set public policy,” said Bhairavi Desai, the executive director of the New York Taxi Workers Alliance, whose 18,000 members include both yellow cab and Uber drivers. “Without a cap, drivers are going to have to work longer hours with less pay, and deal with a corporate boss that was just made more arrogant.”
Uber largely cast its fight here — as it has in other cities — as a campaign against big taxi interests that wield major political donations. Against that big money, Uber argued that it was defending jobs in minority and immigrant communities in New Yorker's outer boroughs. It seldom mentioned, though, Desai said, that many of the drivers in the traditional taxi industry here whose livelihoods have been harmed by Uber's unrestrained growth are people of color, too.
“If the drivers of the biggest taxi market in the country can’t be protected,” Desai asked, “what chances do drivers in other parts of the country have?”