Uber sued New York City on Friday over the City Council's vote last August to impose a year-long cap on new licenses for ride-hailing vehicles. Uber's lawsuit seeks to reverse the cap and allow new licenses again.

New York's cap was designed to limit the number of vehicles on the road, reducing congestion and helping taxi drivers, who say their livelihoods were hurt by the influx of ride-haling drivers in the city. It also allowed the state of New York to set a minimum hourly rate for drivers, which Uber's rival Lyft sued to reverse earlier this year.

"Rather than rely on alternatives supported by transportation experts and economists, the City chose to significantly restrict service, growth and competition by the for-hire vehicle industry, which will have a disproportionate impact on residents outside of Manhattan who have long been underserved by yellow taxis and mass transit," Uber's lawsuit says.

In a statement to CNBC, the New York Taxi Workers Alliances defended the city's decision to cap ride-hailing licenses, citing the economic crisis faced by taxi drivers.

"Eight drivers have now died by suicide because of the crisis Uber created," the statement says. "That's why Uber drivers and yellow cab drivers from across the city united to win the historic cap on for-hire-vehicles — to put an end to the financial despair, debt, and poverty that is literally killing our brothers."

Uber said in a statement that it supports "the state's vision for congestion pricing, the only evidence-based plan to reduce traffic and fund mass transit."

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