Uber and Lyft offered to bail out struggling taxi drivers, but New York City said no

Uber and Lyft offered to bail out struggling taxi drivers, but New York City said no

August 1, 2018 0 By Nazmul Khan


Facing a new regulatory crackdown that they say will severely impact their business, Uber and Lyft made an unusual proposal to New York City’s government: stand down, and in exchange we’ll bail out struggling yellow taxi drivers. The response they got was a curt no thanks.

The proposal — to create a $100 million “hardship fund” to support individual taxi medallion owners — was “summarily rejected” by the City Council and Mayor Bill de Blasio’s office, Joe Okpaku, Lyft’s vice president for public policy, told The Verge. “It’s a little bit astonishing to us.”

Of course, there were strings attached. The ride-sharing companies, including carpooling service Via, wanted the city to drop its proposals to cap the number of new Uber and Lyft vehicles and set a wage floor for drivers. In exchange, they said they would create this fund, in partnership with the Robin Hood Foundation, that they claim would pay out “tens of thousands of dollars” to individual medallion owners “right away.”

The companies would contribute $20 million a year for five years to the fund to support medallion owners. It was intended to help individual medallion owners, though, and not corporate owners who hold multiple medallions. A spokesperson for Uber said the company does not comment on private conversations.

Uber and Lyft claim a cap on vehicle licenses would send wait times soaring and driver earnings plummeting. They also say a cap would disproportionately affect outer borough residents, including low-income communities and people of color. “The cap bill would set things back to a time when service levels were horrible in the outer boroughs,” Okpaku said.

The offer to bail out taxi drivers is an unforeseen twist in the years-long struggle by New York City regulators to contain the explosion of ride-hailing app drivers. City Council members have said they were partly motivated by the plight of taxi medallion owners, who have seen the value of their licenses plummet in recent years in direct correlation to the rise of ride-hailing apps. Six taxi drivers have committed suicide in the last six months, a grim reminder of the human costs of technological disruption.

Uber’s response to the proposed bills was to go on the offensive. A message appears on the homepage of its app for New York City users with the title, “Arriving now: Higher prices and increased wait times.” The company has been calling Uber customers directly, asking them to send messages of support for Uber to their council members, according to BuzzFeed. Lyft has been emailing customers with its own appeal to “speak up for ridesharing.”

(Not part of the effort? Any in-app trolling of local politicians. In 2015, when Mayor de Blasio first proposed restricting the number of Uber and Lyft drivers, Uber responded by creating a “DE BLASIO” option in its app that made all the cars disappear.)

With its offer, Uber and Lyft appear to be trying to muddy the conversation around the proposed regulation, which may be voted on as soon as next week. It puts pressure on the mayor and the City Council to respond with their own proposal to rescue underwater medallion owners.

For its part, the city believes its already doing that. “The Administration believes the Council’s approach remains the most holistic way to help drivers support their families and to address congestion,” a spokesperson for the mayor said in a statement.

The City Council agrees. “From the very beginning, the council has engaged with all stakeholders on this legislative package,” a spokesperson for Council Speaker Corey Johnson said. “Those dialogues were extremely productive and informed the proposals that we put forth. We don’t negotiate in public, but we can say that we are confident the bills that will be voted on will help drivers, reduce congestion and bring fairness to the industry.”

“Lyft and other high-volume for hire vehicle companies are welcome to establish such a fund with a non-profit and assist drivers who are experiencing serious financial difficulties,” he added. “They don’t need any Council authority to do that.”



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