1. Do you think that taxicab drivers would support this policy? What about Uber drivers? Why?

2. Corey Johnson, the City Council speaker, said "We are pausing the issuance of new licenses in an industry that has been allowed to proliferate without any appropriate check or regulation." He also said that the new policy would not diminish existing service for New Yorkers who rely on ride-hail apps like Uber and Lyft. Evaluate Mr. Johnson's remarks.

3. Lyft is a company similar to Uber that is also affected by the new policy. Lyft anticipates that nearly 14 of its drivers will leave Lyft during the next year due to routine turnover, and the policy will prevent Lyft from replacing them. So Lyft's annual quit rate is about 25%.

Under the new policy, explain how the quit rate is related to the price that riders will pay and to their expected wait time when using Lyft.

4. The rationale for the new policy is to address worsening street congestion and to improve driver's wages. An alternative policy to address worsening congestion is "congestion pricing", which would require the drivers of all motor vehicles to pay a toll when entering Manhattan's busiest neighborhoods.

Compare the anticipated effects of both policies (the new policy and a congestion pricing policy) on the compensation of Uber/Lyft drivers and taxicab drivers. What are the strengths and weaknesses of both policies? Which would be more effective in reducing congestion? Why?

Note: This case is based on an article published in The New York Times by Emma G. Fitzsimmons: "Why a Cap on Uber in New York Would be a Major Blow for the Ride-Hail Giant" (August 8, 2018), and on the update "Uber Hit With Cap as New York City Takes Lead in Crackdown" in the same newspaper and date, and by the same author.