Lyle Frank, a judge at the Supreme Court of New York State, has lifted the new cap imposed on cruising in the busy streets of Manhattan. It is a big win for the ride-sharing companies LYFT Inc (NASDAQ:LYFT) and Uber Technologies Inc (NYSE:UBER) because drivers can go at reasonable speeds in busy streets and save time. The judge said the new rule limiting the speed is capricious and arbitrary and gave the verdict in response to the lawsuit filed by Uber in September 2019.
The new rule limiting the speed is expected to come into effect in February 2020. It sets the time allowed for waiting for the ride-sharing vehicles in the south of 96th street in Manhattan. According to the ruling, the city regulators should not include the time taken by the driver to pick up a passenger.
Aimed to reduce traffic congestion
The Taxi and Limousine Commission of New York City has limited the speed of ride-sharing companies in August 2019 to reduce the congestion of traffic in Manhattan. The ride-sharing companies operated vehicles account for one-third of the traffic in the peak hours. New York state regulators imposed tough rules and directed the ride-sharing firms to adjust their business models.
The regulators said they are studying the verdict of the Supreme Court of New York State. However, the new verdict does not alter the existing rules, such as minimum wages for ride-share drivers. It will not remove the cap on the app-based and for-hire cars in the city. The ride-sharing companies such as Uber welcomed the verdict.
According to a communiqué, Uber will fight against the politically motivated rules and bats for the driver flexibility. It will favor decisions that reduce congestion. Another ride-sharing company – Lyft, said the new rules imposed in the New York State are arbitrary. However, it will work with the city and state leaders to tackle the transportation challenges in New York and to arrive at the best solution to alleviate congestion.
Lyft and Uber locked out drivers
Lyft and Uber have locked out drivers from their apps in areas that have low demand. The new rules imposed by the state regulators reduce the income earned by the drivers. It will also limit the affordable app-based ride-sharing services to commuters in rural areas.