A New York state judge on Monday ruled in favor of Uber Technologies Inc and Lyft Inc in a lawsuit against New York City, striking down a new rule limiting how much time drivers for ride-hailing services can spend cruising streets in busy areas of Manhattan without passengers.

Continue Reading Below

Judge Lyle Frank of the Supreme Court of State of New York in his decision called the city’s cruising cap “arbitrary and capricious.”

New York City’s Taxi and Limousine Commission passed the rule in August with the aim of reducing traffic congestion in Manhattan, where ride-share vehicles make up close to a third of peak traffic. The commission said it was working on a statement in response to the judgment.