Transportation

Uber sues New York City over 'cruising cap' limit for drivers

Key Points
  • Uber Technologies Inc sued New York City on Friday over a new rule limiting how much time its drivers can spend in their vehicles in Manhattan without passengers
  • The ride-hailing company called the "cruising cap" rule adopted last month "arbitrary and capricious."
  • The "cruising cap" rule sets a 31% limit on how much time drivers of for-hire vehicles can drive without passengers, and was intended to reduce street congestion.
Uber CEO Dara Khosrowshahi walks outside of the New York Stock Exchange its highly anticipated initial public offering on May 10, 2019.
Spencer Platt | Getty Images

Uber Technologies Inc sued New York City on Friday, seeking to void a new rule limiting how much time its drivers can spend in busy areas of Manhattan without passengers, saying the rule threatens to undermine Uber's ride-sharing model.

In the complaint filed in New York state court in Manhattan, Uber also challenged the city's extension through August 2020 of a ban on new licenses issued to for-hire vehicles. The city's Taxi and Limousine Commission was also named as a defendant.

Seth Stein, a spokesman for Mayor Bill de Blasio, defended the rulemaking, saying it would protect New Yorkers "against a company that seeks to put profit first."

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The "cruising cap" rule sets a 31% limit on how much time drivers of for-hire vehicles can drive without passengers in Manhattan south of 96th Street. It was intended to reduce street congestion.

Uber said that while it has "publicly and vocally supported" reducing congestion in Manhattan, the cruising cap was based on "flawed and arbitrary" economic modeling.

"The rule would threaten the viability of the ridesharing model as it currently exists, jeopardizing the benefits this model has created for riders and drivers," Uber said.

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Key Points
  • Uber and Lyft drivers are protesting their pay and working conditions.
  • CNBC spoke with the company's drivers about how their financial lives are faring.