Townhall in the largest US city could vote as early as next week to limit increases in what it calls new for-hire vehicles (FHV) pending a study on their impact on traffic, and in particular traffic jams.
The limitation could be severe: an increase of just one percent per year for companies with more than 500 vehicles, and five percent with those with between 20 and 499 vehicles.
"What is good for Uber may not be good for New York City," said Wiley Norvell, a spokesman for city hall.
He cites figures: more than 20,000 Uber vehicles now operate in New York, compared to 13,587 yellow taxis.
And 2,000 new permits for for-hire vehicles are granted every month, and the FHV fleet, of which Uber cars are just a part, has shot up 63 percent in size since 2011.
To back up its argument against unleashing more Uber cars, city hall cites such issues as quality of life, public health and businesses' ability to thrive.
It notes that average traffic speed in Manhattan has gone down nine percent between 2010 and 2014, going from 9.3 miles (15 kilometers) per hour to 8.5 miles per hour.
City hall says the New York's streets cannot necessarily handle a "tide of new vehicles."
Months of talks with Uber have gone nowhere.
City hall blames what it calls an "ideological clash."
David Plouffe, a former aide to President Barack Obama and now chief strategist for Uber, made a special trip to New York this week for meetings with city officials. Tensions got even worse.
In recent days, Uber has gone all out with TV ads and a campaign of emails and petitions accusing Democratic Mayor Bill de Blasio of "pushing the agenda of his big taxi donors."
"I think it is less about traffic congestion than it is about political contributions," Plouffe told reporters.
The price of a medallion the city-issued license required to operate a yellow cab has dropped 23 percent since 2013, when it topped $1 million (roughly Rs. 6 crores).
Uber's ads feature drivers from minority ethnic heritages and say the mayor's proposals will destroy more than 10,000 jobs.
The ads also depict families in Queens or the Bronx, boroughs where it is hard to find a taxi.
"Vital services for thousands of New Yorkers may vanish," says one of the ads.
Uber users have received an email asking them to sign a petition denouncing the mayor's plans.
And a "de Blasio" tab has been added to the Uber app to show users the extra waiting time that they can expect to endure if the bill limiting expansion of for-hire vehicles wins approval.
"New York overall would not see a reduction in congestion from capping for-hire vehicles using Uber, but instead would halt progress made through technological innovation over the past years," the company said.
"Uber technology has helped expand service to those who were previously underserved."
City hall has hit back hard.
"Uber a $40 billion corporation is spending millions on a misleading political campaign to convince New Yorkers that it doesn't need more oversight from the City," First Deputy mayor Tony Shorris said this weekend.
"Meanwhile, there are serious questions about how Uber treats its customers, its workers, and whether it is flooding New York City's already heavily-crowded streets with thousands of more vehicles."
Germany, London and Paris have faced the same problem, city hall says.
The war against the ride-booking app looks set to drag on: in San Francisco, the company was just fined $7.3 million (roughly Rs. 46 crores) for not turning over internal information about rides, including handicap accessibility.
The issue is becoming political, too, as the campaign for the 2016 presidential election is taking shape.
Republican presidential hopeful Jeb Bush has defended Uber as providing a "pretty vital service."
Democrat Hillary Clinton has stressed that the sharing economy raises questions about protecting people's wage levels.