Car services like Uber, which allow customers to hire a car via smartphone apps, are controversial across the world. Cab drivers in New York are now demanding tighter regulation of the ride-sharing service.
Uber drivers were recently on strike in front of the Taxi and Limousine Commission (TLC) in downtown New York. They were trying to make their voices heard, chanting “We are Uber” and honking the horns of their cars.
"I've been driving yellow cabs for 20 years, I just started working with Uber four years ago," said Ahmed, one of the drivers. For him a big difference he claims, because now he earns more than before. "But the TLC is trying to give us hard rules, so we cannot work in the city quietly and nicely."
The TLC is an authority run by the City of New York. It has set out to regulate ride-sharing services which in New York can be hired via a total of 75 smartphone apps.
TLC's Ryan Wanttaja claims customers need to get better protection. "We do not want our passengers to be ripped off by rogue apps," he said at a recent open hearing addressing the topic.
According to rule changes proposed by TLC, drivers would need to get security-checked and would have to prove they are not distracted by mobile devices while driving. "We also want to make sure that the passenger knows upfront or has an idea of what they are going to pay when they get into that car," he added.
TLC and New York mayor Bill de Blasio have been facing strong headwinds working out tighter market regulation, with critics saying they kill off innovative services. In addition, they've been accused of undermining free market competition in the sector which would cause unintended consequences.
"You might say that this is hyperbole, but it is true," said Michael Allegretti, who works for Uber New York. "But a single violation as simple as an out-of-date inspection sticker would actually leave Uber shut down."
Meanwhile, TLC chairman, Meera Joshi, has admitted the new rules still need some adjustments and clarification, saying, however, the regulation is essentially necessary.
But the providers of ride-shares feel the biggest threat to their services comes from a TLC plan to review any app modification that is made, and slap a charge of $1,000 (880 euros) on each of them. Local media reported that the charge would violate US federal telecommunications regulations. As a result, US technology giants like Yahoo, AOL and eBay have supported the Uber protests.
"I just want to urge the commission to remember New York's status as a technology leader," said Michelle Lease from the Application Developers Alliance, a non-profit group representing the sector. "Such barriers to entry and policies that delay these app updates deter the next generation of leaders and they will take their ideas to cities with fewer barriers," she says.
Smaller ride-sharing services like Lyft also fear any limitations on the number of smartphones and other gadgets used by drivers will allow market leader Uber to become even stronger.
"There will be restricted choice for the driver, and that any company now can use these rules to box out other companies," says Diana Dellamer, who is driving for Lyft. "They could require one device, they could require two devices."
She thinks drivers who might want to experiment with different companies will be forced to make a decision, and "rationally, they will choose the biggest company."
Uber offers rides with more than 16,000 drivers in New York - most of them working on a part-time basis. At the same time, there are only around 13,500 licensed yellow cabs allowed in the city.
Regulation for all
Bhairavi Desai is a founding member of the New York Taxi Workers Alliance, a union representing the yellow cab drivers.
"From the labor union movement perspective, it is just like the sleaziest thing to do. For a bunch of billionaires to try to put drivers as the front face of an anti-regulation agenda," she says. "Everybody in this industry gets regulated. There should not be special treatment just because these are corporations that have more billions to throw around on an anti regulation agenda."
Mayor Bill de Blasio's election campaign received hundreds of thousands of dollars from executives, lobbyists and other affiliates of the yellow taxi industry. The Taxi and Limousine Commission is scheduled to adjust the rules in the upcoming months.