City has jumped to the forefront of a worldwide push to clamp down on companies such as Uber, Lyft and Airbnb

This article is more than 2 years old

This article is more than 2 years old

The gig economy is having a bad summer in New York City.

New York this month became the first major city to cap the number of cars that companies like Uber and Lyft are allowed to put on the road.

Just weeks earlier, the city council approved and New York’s mayor, Bill de Blasio, signed a law to crack down on Airbnb, requiring the company to hand over the names and addresses of all its hosts to an enforcement office.

With the one-two punch, New York has jumped to the forefront of a push in cities around the world to clamp down on the app-based companies that are now among the biggest players in the transportation and lodging markets.

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“What we did should at least make it clear to other cities that commonsense regulation is possible,” said Corey Johnson, the city council speaker who made the tech company crackdowns among his first high-profile legislative pushes.

Each app presented its own set of challenges for city officials in New York – and each mounted a fierce but failed bid to stop the new rules.

Uber flexed its political muscle in 2015 and was able to beat back a similar effort to impose a cap, which collapsed after a public lobbying blitz by the company.

This time around, the company again argued that a cap would drive up prices and make it harder to get a ride in the city’s outer boroughs where transportation options are more sparse than in Manhattan – asking its customers to contact their representatives with the message: “URGENT: Your ride is at risk.”

And it enlisted civil rights leaders to make the case that ride hailing was essential for black New Yorkers, who have faced discrimination from the city’s yellow cabs.

The legislation, which puts a cap in place for one year, quickly passed anyway.

“They didn’t realize that times had changed,” said Mitchell Moss, director of New York University’s Rudin Center for Transportation.

The number of cars plying the congested streets has exploded – to 113,000 licensed for hire vehicles as of 14 August, when the cap took effect, up from fewer than 47,000 at the beginning of 2014.

The turn to e-hailing clobbered the city’s well-known yellow cabs, with some drivers buried in debt from medallions which have plunged in value.

Six drivers have killed themselves in less than a year.

“You don’t understand how bad it is,” said yellow cab driver Abraham Lobe, a member of the New York Taxi Workers Alliance. He said that once, a driver could make $200 in a single morning or evening rush hour. Now, it’s less than $50.

In addition to the cap on licenses for hire vehicles, another law will establish minimum earnings for app drivers – requiring the companies to make up the difference if drivers don’t make enough from fares.

The cap “will threaten one of the few reliable transportation options while doing nothing to fix the subways or ease congestion”, said an Uber spokeswoman, Alix Anfang.

But Uber driver Sohail Rana called the company’s argument a “complete lie” and said he hoped the law would ease the crunch on drivers.

“There are five drivers fighting for one ride,” said Rana, a member of the Independent Drivers Guild.

After New York’s vote to cap Uber, London’s mayor, Sadiq Khan, said he wanted a cap there too.

While officials fretted about Uber causing congestion on the streets, they took an even harder line against Airbnb, aided by the politically influential hotel workers union.

Foes blamed the company for driving up rents, with landlords taking apartments off the housing market and instead renting them out to tourists. Airbnb countered that most of its hosts were average New Yorkers renting space in their own homes to help make ends meet.

It was already illegal under New York state law to rent out an entire apartment for less than a month at a time.

But under the city’s new law, Airbnb will be required to hand over the names, addresses and other information about all of its hosts to a special enforcement office, which could expose them to fines and drive some off the platform altogether.

Lynn, an Airbnb host in the borough of Staten Island who wouldn’t give her last name because she fears retaliation, said she plans to take down her listing and sell her home rather than comply with the requirement.

Lynn and her husband own a two-family house, and joined Airbnb in 2014 after they both lost jobs in the same year. They offer up the unit they live in on the site, and stay with her parents when it is rented out.

“It’s helped out these past few years, just keep everything afloat,” she said. “We can’t keep it going without the extra income we get from renting it out.”

When a similar requirement took effect in San Francisco, the number of Airbnb listings there was cut in half. Airbnb sued on Friday in an effort to block the proposed New York law.

Other cities have taken steps to rein in AirBnb. Barcelona created a squad to root out unlicensed rentals. Iceland restricted the number of days residents can offer rentals in their properties to 90 days a year before they must pay business tax, and created a committee to find illegal units.

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Japan passed a temporary housing law limiting rentals to 180 days a year and requiring hosts to register, and local governments went further, with one Tokyo ward banning all rentals on weekdays.

New York’s approach is one of the harshest, said NYU professor of business Arun Sundararajan.

“We have among the most restrictive Airbnb laws, and I think it will hurt the city in the long term,” he said.

But Veena Dubal, an associate professor of law a the University of California, Hastings College of Law, said New York had taken an important stand.

“This might send a signal to cities around the country that they can be regulators of these big companies, and it doesn’t mean you’re anti-business,” she said.