Inside the meeting that launched the war between Uber and New York’s Mayor

Mashable
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Uber and New York City Mayor Bill De Blasio, now at war, gave up their chance at peace last week.

For two hours last Monday, representatives from Uber and Mayor Bill de Blasio’s office met for a conversation about City Hall’s support for a controversial measure that would limit the number of ride-hailing vehicles on the street for a year. Meant to bring both sides together, the meeting instead drove them further apart.

According to multiple sources present who recalled the tense meeting to Mashable, Uber and the mayor’s office exchanged diametrically opposed views. The mayor’s office has framed the initiative first and foremost as an effort to curb congestion and study the impact of these services, but during the meeting his camp aired additional concerns about worker rights, driver qualifications and passenger safety.

Uber, as it has done time and again in markets around the world, viewed the regulatory pushback as an existential threat.

Both left frustrated and critical of the other side’s approach.

“We’ve gone to bat against hedge funds. We’ve gone to bat against deep-pocketed folks who can throw millions of dollars of stuff on the air and turn on a dime,” a source close to the De Blasio administration told Mashable about its meeting with Uber. “What did surprise and, to some extent, affront was an unwillingness to have any of those discussions as long as a hypothetical limit of growth was on the table.”

“The takeaway from the meeting was that this isn’t about congestion,” said Josh Mohrer, general manager of Uber New York City, who was present at the meeting. “It is about the Mayor being able to say that he stopped Uber.”

The next day, Uber escalated its attacks. Uber is officially fighting City Hall.

Uber’s team relied on its extensive experience with combative politics, honed during numerous battles in other cities. The ride-sharing company has developed a potent playbook of rolling out ads, prompting users to protest and write their legislators, encouraging protests and recruiting lobbyists and influential political figures.

On Tuesday, David Plouffe, a top Uber exec and former advisor to President Obama, criticized the impact that this policy would have on city jobs during a meeting with community leaders.

On Thursday, Uber tweaked its app to show New Yorkers a chilling view of a city without Uber cars to hail. And on Monday, Uber challenged De Blasio’s administration to a live-streamed debate.

These efforts have cast De Blasio as someone in the pocket of traditional taxi industry lobbyists or else an opponent of innovation, an undesirable role for a politician in a city vying to compete with Silicon Valley — and a portrayal his staff steadfastly refutes in interviews.

“From our perspective, this isn’t a tech or an innovation issue,” says Wiley Norvell, a spokesperson for De Blasio’s office. “It’s a transportation issue.”

In recent days, the Mayor’s office has put out more statements to clarify its position and counter what it sees as overheated rhetoric from Uber.

“Contrary to the misinformation out there, no one is banning Uber or ending it as you know it,” Tony Shorris, first deputy mayor, said in a statement on Friday. “The service you use today will continue to be there tomorrow, the day after, and in the months ahead.”

At the heart of the fierce debate are two fundamental questions: What happens to Uber and its lesser-known but still impressively funded competitors if a temporary cap is put in effect for the next year? And what happens to New York City if it’s overturned?

As you head out the door of your office for your next meeting, you open up the Uber application only to find the map is empty and the nearest car is 25 minutes away. That’s the nightmare scenario Uber teased to millions of New Yorkers last week with a special “De Blasio” view.

Those we spoke with inside Uber admit it’s an “extreme” possible outcome from the city’s proposed yearlong cap on growth, but an outcome the staff nonetheless believe possible given Uber’s current rate of growth.

Uber now has more than 25,000 “driver partners” on the road in New York with plans to add another 10,000 over the next year. It signs up 25,000 new riders each week in New York City, a staggering figure, though it’s unclear how many become repeat customers.

Uber’s contention, according to sources at the company, is that without increases in supply to match that demand, wait times will skyrocket, surge pricing (which now kicks in with fewer than 10% of rides in the area) will become more common and coverage for the boroughs outside Manhattan will dwindle fast. Left unsaid: how this will hurt the customer experience and demand in what may be Uber’s most valuable market.

“The share of pick-ups that happen outside Manhattan, currently more than 35% — as opposed to 6% among taxis — will decline as an artificially-limited number of drivers chase demand where it is most densely concentrated (in the wealthiest areas),” Mohrer wrote in an open letter published on Medium this weekend. “This will mean a return to the days of taxi, when only midtown or lower Manhattanites on sunny days had ready access to for-hire transportation.”

Taxi and Limousine Commission (TLC) data provided to Mashable by a source close to the De Blasio administration may offset some of those concerns.

There are about 63,000 for-hire-vehicles already operating in the city, Uber accounting for roughly a third of those, providing ample coverage. Green cabs provide more than half as many daily rides as Uber does (100,000 for Uber, according to TLC) and only service Upper Manhattan and the outer-boroughs.

Then again, De Blasio has opposed green cabs in the past as well.

For the De Blasio administration, the risk of having too few vehicles from ride-hailing upstarts is outweighed by the risk of having too many on the street. “Once we’re at 100,000 vehicles, we can’t go back, and if the optimal number is 80,000, then we’re 20,000 over,” says the De Blasio insider. “The market is not necessarily going to give us the right outcome here in terms of congestion, or worker safety.”

By choosing to focus on the issue of congestion first rather than worker safety or other commonly lodged complaints about Uber, the administration has left itself open to criticisms that this plan to limit congestion is misguided.

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