© Bloomberg

Uber is suing New York City over its cap on licences issued to for-hire vehicles in the latest conflict between technology companies and the Big Apple.

The San Francisco-based ride-hailing company filed a lawsuit in New York state court on Friday contesting a measure passed by the city council last year, which was part of a package of regulations meant to address the explosive growth of ride-hailing.

The council approved a 12-month freeze on new for-hire licences and commissioned a study by the Taxi and Limousine Commission of how app-based services, such as Uber and Lyft, affect traffic congestion and wages, among other issues. It also delegated authority to the TLC to set a permanent cap on licences depending on the study’s findings.

Uber’s legal action further escalates tensions between the city and the company, which faced off over a similar proposal to regulate app-based car-booking in 2015. Uber prevailed in that battle, thanks to a costly public relations and lobbying campaign that defeated efforts by Bill de Blasio, New York City’s mayor, to regulate it.

While Uber ran an expensive ad blitz against the laws last year, it was unable to prevent them from passing.

The company has engaged in regulatory battles around the world, especially in its early days, when it entered many markets without seeking approval from local authorities.

Since a series of crises in 2017 that led to the ousting of co-founder Travis Kalanick, the architect of the company’s aggressive strategy, Uber has worked to restore relationships with regulators in cities including London. The moves are part of chief executive Dara Khosrowshahi’s goal of reforming the company’s image ahead of an initial public offering later this year that could value the company at more than $100bn.

Uber’s suit argues that New York state law does not give the city the authority to limit the number of for-hire vehicles licences. It also said the cap conflicted with another part of the regulation package: a new minimum wage formula for drivers using ride-hailing apps.

“The City Council’s new law guarantees a living wage for drivers, and the administration should not have blocked New Yorkers from taking advantage of it by imposing a cap. We agree that fighting congestion is a priority, which is why we support the state’s vision for congestion pricing, the only evidence-based plan to reduce traffic and fund mass transit,” said Harry Hartfield, an Uber spokesman.

Lyft and Juno, another app-based ride service, have filed a separate lawsuit against the city challenging the way it is implementing the wage floor. Uber did not join in that effort.

Uber’s showdown with New York comes as city officials are reeling from another fraught relationship with a big tech company. Amazon on Thursday called off its plans to build a corporate campus in New York that would have brought in 25,000 jobs and an estimated $27bn in tax revenues over the next 20 years, after opposition to the $3bn in financial sweeteners the city and state had promised the ecommerce company.

“Taken together, I think New York does run the risk of telegraphing to the rest of the world that it’s a tough place for tech,” said Julie Samuels, executive director of Tech: NYC, a local group representing the technology industry.

Get alerts on Uber Technologies Inc when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Follow the topics in this article