Cab-hailing app Uber to call it quits in face of angry taxicab industry

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After just six weeks in more than 100 taxis, the app Uber will be shutting down its services in New York City, pointing to rules prohibiting pre-arranged rides in yellow cabs as the cause of their closure.

According to the New York Times, Uber CEO Travis Kalanik says that there was a great deal of interest on the passenger side, but too many drivers were wary of crossing the Taxi and Limousine Commission (TLC).

“If you don’t have enough cars out there, then you can’t support the people who want to use it,” Kalanik reportedly said.

In a post on Uber’s website, Kalanik accused the TLC of attempting to “squash the effort” of his company, despite having privately admitted the practice is legal.

TLC Spokesman Allan Fromberg says there is “simply no truth” to that statement, the New York Times reports.

In an industry notice last month, the TLC cited contracts with payment processors as a problem with respect to the app, making no explicit mention of any violation of the pre-arranged rides ban.

The commission has said that proposals for changes to the rules in the interest of app developers will likely be brought up at a public meeting next month.

David S. Yassky, chairman of the TLC, issued a statement saying, “Those changes cannot legally take place until our existing exclusive contracts expire in February. We are committed to making it as easy as possible to get a safe, legal ride in a New York City taxi and are excited to see how emerging technology can improve that process.”

In what the New York Times described as a jab at the Bloomberg administration’s frequent boasting of welcoming new technologies, Kalanik has said that while the app will continue its service with the city’s black cars, they will focus their efforts on expanding into “more innovation-friendly cities,” referencing Boston and Toronto as examples.


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