traffic jams in the city, road, rush hour
traffic jams in the city, road, rush hour

The law that threatens Uber’s viability

Uber drivers "cruising" on busy roads while waiting for passengers have been singled out as a major source of congestion by the city of New York.

So New York City has tabled new laws restricting the amount of time Uber drivers can spend without passengers in the car, essentially requiring them to leave busy areas of Manhattan if there is not strong demand for alternative taxi services.

Uber has effectively replaced taxis for many users.
Uber has effectively replaced taxis for many users.

The change will require Uber drivers to spend no more than 31 per cent of their time "cruising" for rides, which represents a drop of about 10 per cent from existing levels.

Uber drivers are required to keep moving rather than parking to wait for fares.

Reuters reports Uber is suing New York to stop the changes.

Uber says "The rule would threaten the viability of the ride-sharing model as it currently exists, jeopardising the benefits this model has created for riders and drivers".

But a spokesman for New York City Mayor Bill de Blasio says the changes would "bring needed relief to congested streets and hardworking drivers".

Australian cities will watch New York’s case with interest. Picture: Matt Thompson
Australian cities will watch New York’s case with interest. Picture: Matt Thompson

The case, which started on Friday, comes as Uber faces an uncertain week in the UK. Uber's licence to operate in London expires on Wednesday. Transport regulators have previously banned Uber from operating in the British capital, citing security concerns.

Major cities around the world will be watching what's happening in New York and London as ride-sharing apps continue to grow in popularity.



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