New York City's local council has pressed pause on granting new licences to ride-hailing firms for one year, blaming companies such as Uber and Lyft for the city's congestion problems.
The package of measures outlined by the city's mayor Bill de Blasio overnight also includes setting a minimum wage for drivers, after the New York Taxi Workers Alliance said low incomes had been a contributing factor to six suicides among drivers in recent months.
The package, which will implement a 12-month ban on issuing new for-hire vehicle licences excluding those which are wheelchair-accessible, has been vehemently opposed by the major ride-hailing firms operating in New York.
The news marks the first time a large US city has slapped a cap on ride-hailing firms, with New York City to date being a major source of revenue for those companies.
Uber said in a statement that the pause will threaten ride-hailing firms as a viable transport option for New Yorkers, while "doing nothing to fix the subways or ease congestion".
Lyft concurred, adding: "These sweeping cuts to transportation will bring New Yorkers back to an era of struggling to get a ride, particularly for communities of colour and in the outer boroughs."
In an email to city users last month, Uber blamed the move for a potential rise in prices, longer wait times and less service in outer-city areas.
Ride-hailing vehicles in New York have soared more than 85 per cent in the last three years, now sitting at around 80,000 compared to just 14,000 yellow cabs.
De Blasio said he intends to sign the measures into law, which will "stop the influx of cars contributing to the congestion grinding our streets to a halt".
Companies such as Uber have also faced trouble elsewhere from city authorities, only recently restarting operations in Finland after shutting down while new laws came into effect.
In London, Uber is operating under a renewed 15-month licence granted by Transport for London on the condition that the company has reformed its "gung-ho" attitude to business. It continues to face backlash from taxi drivers.