French Uber bosses to stand trial while New York City considers capping the company's growth

By Nidhi Prakash  |  June 30, 2015 | 9:25pm
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Uber’s top executives in France will stand trial over a slew of charges while the company faces a city-mandated limit on growth in New York City.

A French court today ordered the CEO of Uber France and the company’s Europe General Manager to face charges relating to the UberPOP service (which uses drivers without specialized taxi licenses) that inspired violent protests from taxi drivers last week because it uses drivers without specialized taxi licenses.

According to the Wall Street Journal, Uber executives Pierre-Dimitri Gore-Coty and Thibaud Simphal (and Uber itself) face charges of “deceptive commercial practices” and “enabling illegal taxi services and illicit storage of personal data.” The executives were taken into custody on Monday.

Meanwhile, in New York City, city legislators are considering capping the growth of the largest for-hire car services like Uber to a maximum of 1 percent of their current vehicle base until the results of a congestion impact study are released in August 2016. According to the Taxi and Limousine Commission, there are currently 13,400 yellow taxis in New York City and about 63,000 for-hire vehicles. Uber estimates they have around 27,000 cars in the city.

“The bill being heard today would limit Uber to adding only 200 new vehicles in the next 14 months,” Josh Mohrer, General Manager of Uber NYC, told the crowd outside City Hall today. “That means 9,800 of those job opportunities will be lost.”

But having an impact study before issuing more licenses would put companies like Uber on par with the requirements for taxis, said Council Member Ydanis Rodriguez, New York City Council’s Transportation Committee Chair and sponsor of two bills: one to start the impact study and one to cap growth during the study. Both were discussed this afternoon in a relatively fiery hearing of the transportation committee at New York’s council chambers.

Outside the chambers, protestors from Uber and the New York Taxi Workers Alliance union vented their frustrations, with drivers pacing in front of the gates.

“Our business has been ruined so badly that we are under debt right now. Uber has taken control of NYC,” said 34-year-old Jaspreet Singh, one of about a dozen yellow cab drivers outside City Hall gates with hand-written signs reading “Uber Killing Yellow Cabs.”

Singh and other members of the union say their livelihoods have been ruined by the arrival of Uber because they are disadvantaged by having to pay for NYC taxi medallions to be authorized cab drivers whereas Uber drivers are just required to get a Taxi and Limousine Commission-issued license for a $100 fee. The current value of a medallion is estimated between $700,000 and $900,000.

“Our question to the NYC and the TLC is why do you have to sell the medallion at such a high price, and at the same time you are authorizing the Uber drivers to pick up fares. How is this situation equal?” Singh said.

On the steps of City Hall, Uber gathered around 50 employees and a few customers lured by free T-shirts and free rides.

Mohammed Russel, 23, an Uber driver who knew nothing about the rally today, said his job with Uber has given him a higher salary and better flexibility to be able to study at the same time.

“I think that’s not fair,” he said, when he heard about the congestion study and growth cap being discussed today.

He said he thinks Uber shouldn’t be singled out for traffic problems in the city. He said driving for Uber is a much better job than the one he had before, working at a restaurant. Before joining Uber he said he was earning less than $100 per day; he said he now earns somewhere between $150 and $200 per day.

Part of Uber’s argument is that old regulations are not in line with the dynamics of a changing car service industry.

“So what is this really about? Well that’s an easy one. It’s about stifling competition for the taxi industry. It’s about putting the interests of medallion millionaires above those of New York’s riders and drivers,” Mohrer said at the rally.

But the city’s Transportation Commissioner, Polly Trottenberg, is on board with the bills—particularly with the goal of reducing congestion in Manhattan.

“Most new for-hire vehicle trips—72 percent of pickups—are taking place in the already-congested Manhattan core. DOT has an obligation to manage our street network so as to maximize safety and mobility,” she said in her testimony.

Both the taxi drivers outside City Hall and the city’s Taxi and Limousine Commissioner, Meera Joshi, said companies like Uber should not be exempt from regulations that other taxi companies have to deal with.

“They stand alone in the private for-hire world as the sector without a meaningful growth oversight mechanism,” Joshi told the City Council hearing.

Today’s hearing was just the start of the process; the council will vote on the bills in the coming months. Globally, Uber is facing court battles not only in France but also in South Korea. Some of its services have been banned in several countries around the world.

 
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