Uber is taking New York City to court, claiming it is unfairly blaming the ride hailing app for the destination’s congestion problems.
Last year NYC mayor Bill de Blasio announced a cap on new on-demand drivers to reduce congestion.
Uber contends it is being treated unfairly and the cap was decided without any meaningful data to back up claims its on-demand app based ride hailing services are responsible for increased congestion.
In the lawsuit, Uber says: "The city made this choice in the absence of any evidence that doing so would meaningfully impact congestion, the problem the city was ostensibly acting to solve."
Uber has accused the city of overstepping its authority and said the move would negatively impact residents in Brooklyn, Queens, the Bronx and Staten Island where hailing a taxi is problematic.
The mayor’s spokesman Seth Stein said in response: "No legal challenge changes the fact that Uber made congestion on our roads worse and paid their drivers less than a living wage."
Many existing Uber drivers are in fact in favor of a cap on new drivers and have teamed up with traditional yellow cab drivers in the New York Taxi Workers Alliance.
They say a constant flood of new drivers in the market is driving salaries lower and lower.
Both sides privately acknowledge the reason behind the driver cap is all about driver wages.
When NYC approved the cap it also approved in principle a minimum wage for app-based drivers.
Meanwhile Uber reported an adjusted loss of $1.8 billion for last year, and says it has experienced a recent slowdown in quarterly sales growth.
However it is still targeting an IPO by the middle of 2019.
