The (New York) Empire strikes back: next move, Uber and Airbnb

It hasn’t been a good week for the gig economy and the Big Disruptors in the Big Apple.

First it was the introduction of draft legislation to curtail the use of Airbnb.

Then it was a vote to cap the number of licences for ride hailing companies like Uber and Lyft. This is the first time in the US that numbers have been capped and the pain was made worse for the big app operators; the package of new rules included a minimum wage for drivers, as well as price floors.

Once New York’s Mayor de Blasio signs the bill, no further licences will be granted for 12 months, capping the number at about 80,000.

Uber wasn’t impressed, saying: “The city’s 12-month pause on new vehicle licences will threaten one of the few reliable transportation options while doing nothing to fix the subways or ease congestion”. The company argues that the subway system’s many flaws make alternative transport options essential, especially outside Manhattan.

But the New York Taxi Workers Alliance was a lot happier. The 18,000-member taxi drivers, union were enjoying the results of their lobbying pressures, exulting: “VICTORY!!! You Better Believe It! NYTWA Did It!

“New York City is the first city in the country enact drivers’ demands into legislation,” the Alliance bragged on its website.

This isn’t the first time a freeze on new licences has been proposed. In 2015, Uber was able to create a consumer storm that forced Mayor de Blasio to back down; but this time around, with allegations that six taxi drivers have committed suicide due to their loss of income and a backlash against the large numbers of added cars on the New York streets, the momentum might be behind the Empire.

For Airbnb, the New York mayor’s gift was legislation that requires the company to provide all names and details of the rental properties on its listing. A New York state law prohibits renting an apartment for less than 30 days unless the owner/tenant is present at the same time and it is argued that many of the rentals would not stand up to this test. The basic Airbnb principles have been eroded worldwide, as properties have been bought exclusively to rent out on Airbnb. The opponents of Airbnb offer a range of arguments, from security issues, to the reduction of genuine rental stock and the resulting increase in rentals.

Similar legislation was introduced in San Francisco earlier this year, causing more than a third of the Airbnb stock to disappear, presumably because their owners feared they were acting illegally.

New York is critical to each of the app-driven gig economy operators, not just because it is such a valuable market in its own right, but because of its importance as a role model for the rest of the world.

Disruption was never meant to be easy. But don’t expect the Ubers and Airbnbs to give in without a fight….