In an effort to further clamp down on the ride-hailing industry and reduce congestion on city streets, the Taxi and Limousine Commission is planning to extend the existing cap on new for-hire vehicles, while adding new restrictions on how much time drivers can spend cruising around the busiest parts of Manhattan without any passengers.

Currently, the app-based vehicles spend about 41 percent of their day driving without a passenger—just a slight improvement from 45 percent from last year. The new policy aims to get that rate to 36 percent below 96th Street by February of next year, and down to 31 percent by next August.

If Uber, Lyft or any of the other ride-hail companies are caught violating that new rule, the city plans to fine them $1 million per month. Companies found guilty of repeat violations could see their licenses revoked, according to the Mayor's Office.

"The business model right now is [to] keep lots of vehicles out there driving around—it's really cynical," Mayor Bill de Blasio said at a press conference on Wednesday. "It's a horrible model for the drivers and their incomes. It's a horrible model in terms of congestion and pollution."

There are currently about 86,000 for-hire vehicles in New York City. Electric and wheel-chair accessible cars will be exempt, as will the city's 13,587 yellow taxis.

In a statement, a spokesperson for Uber, Harry Hartfield, warned that the new cap would "create another medallion system—the same kind that bankrupted drivers and enriched lenders."

"Not only is the Mayor's policy hurting app drivers by forcing them to pay exorbitant fees to rent a car, but he has proposed nothing to fix the current medallion system that only benefits lenders and taxi insiders," Hartfield argued.

A spokesperson for Lyft called the new policy "misguided" and "damaging."

In a meeting with reporters on Wednesday, city officials said the threat of a second medallion system was a "scare tactic," adding that it's not as if Uber would "take their marbles and go home [because] Uber needs New York City."

The extension of the existing cap on new licenses is slated to go into effect in August, when the previous restriction was set to expire. The city's new minimum wage of $17.22 for drivers was implemented in February, and officials said they anticipate drivers could see a 20 percent increase in pay once the new utilization rules go into effect.

Uber, meanwhile, argues that more than 1,000 for-hire vehicles are already leaving the system each month. As vehicles become more scarce, fleet owners could increase their weekly prices on those who drive leased vehicles for Uber or Lyft, according to the spokesperson.

The TLC will hold a hearing on the new proposed changes this summer, with the mayor expected to approve them in August.

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