NY attorney general: Don't limit car service competition

New York State Attorney General Eric Schneiderman
Getty Images

A New York State official has formally taken a step on the side of Uber.

New York State Attorney General Eric T. Schneiderman sent a letter to the New York City Taxi and Limousine Commission on Friday urging the organization to revise a proposed rule that would protect traditional car services from the competition of app-based services such as Uber and Lyft.

The rule would require official agreements between vehicle dispatchers before allowing drivers to leave on assignments from an unaffiliated base, possibly a rival.

Read MoreTravis Kalanick: Uber CEO is still on the warpath

In the letter, the attorney general said the proposal would "needlessly restrict competition in the for-hire vehicle industry."

Uber looks to raise $1 billion

He added the proposed rule would restrict drivers' options and consequently raise "serious antitrust issues" that would hurt consumers.

However, the attorney general noted in the letter that he supported some elements of the proposed rule, including a compensation system and a procedure for handling disputes.

Read MoreUber plans to fundraise additional $1B: Report

A representative from the Taxi and Limousine Commission said it was still looking into the matter.