De Blasio Caves on NYC Legislation That Would Have Capped Uber's Growth

St Petersburg taxis call for Uber ban
The logo of car-sharing service app Uber on a smartphone over a reserved lane for taxis in a street is seen in this photo illustration taken in Madrid on December 10, 2014. A Madrid judge has ordered U.S.-based online car booking company Uber to cease operations in Spain, the latest ban on the popular service. Taxi drivers around the world consider Uber unfairly bypasses local licensing and safety regulations by using the internet to put drivers in touch with passengers. Sergio Perez/Reuters

Updated | Mayor Bill de Blasio's administration dropped legislation which would have limited car-hailing app Uber's growth in New York City on Wednesday afternoon. The legislation could have passed in the next 24 hours.

The legislation was two fold: part one would call for a congestion survey and the second would cap the number of for-hire vehicles added to the road each year, which would directly affect Uber's growth. Though the congestion study will still continue, and at an "even faster pace" according to city councilman Ydnais Rodriguez, the cap will not go into effect. Rodriguez brought both bills to city council and has had the full support of the mayor's office.

Had the capping legislation passed, Uber would be forced to stay within the city's limits, which would allow car bases larger than 500 vehicles to increase by only 1 percent each year.

The city believed the legislation is necessary to prevent further congestion and to improve the city's air quality. A city study found that Uber had added 23,000 vehicles since 2011 and that average speed in the city had fallen from 9.25 mph to 8.5 mph, an 8 percent decrease. Uber, however, said the cap would make its service almost unusable in New York. Uber also argues that the cap would limit its ability to create more jobs, as it has thousands of contractors on its payroll.

Yesterday, city comptroller Scott Stringer said the bill should be delayed but de Blasio's camp said it was impossible. Today, however, it seems it was possible.

"Today the administration, City Council and Uber have agreed to a framework that will advance the city's vital policy goals for passengers, drivers and the public. It sets in motion a plan to guide a comprehensive and fair public response, driven by data, to the increase in for-hire vehicles. And it ensures that the future growth of this industry matches the values and the interests of New Yorkers," deputy mayor Anthony Shorris said in a statement.

The city will move forward with the traffic survey immediately. It'll be completed in November at which time the capping legislation could be revisited, if the survey directly links for-hire vehicles to congestion.

"Uber will share information for the study above and beyond what has previously been provided, with safeguards to protect privacy. Uber has also agreed to maintain its approximate current rate of growth and not flood the streets with new licenses and vehicles. In addition to the traffic study, the City and transportation stakeholders will participate in a larger review of the entire taxi, FHV and livery industries, with a particular focus on revenue for public transit, consumer protections, driver and employee protections, and accessibility for people with disabilities. The cap legislation currently before the City Council will be tabled throughout the traffic study process," Shorris added.

This decision is a big win for Uber in New York City. The app launched a social media movement, television advertising campaign and even a petition accessible in their app by hailing a "de Blasio" to combat the legislation. At one point, they challenged the mayor to a public debate on the matter, which he declined.