Lyft's NYC debut postponed -- voluntarily or by force?

The ride-for-hire service's move into New York City has been put on hold. But the company says a restraining order wasn't the reason.

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Lyft drivers' cars are identified with a distinctive fuzzy pink mustache. Lyft

Tonight's New York City debut of ride-for-hire service Lyft has been put on hold. But whether the company postponed the debut voluntarily, or was forced to, depends on whom you ask.

"After Lyft rejected a reasonable request by the State to delay its launch, we filed a motion for a temporary restraining order in State Supreme Court this morning," reads a joint statement issued this afternoon by New York State Attorney General Eric Schneiderman and New York State Superintendent of Financial Services Benjamin M. Lawsky. "As a result of that action, the court has granted the State a temporary restraining order preventing Lyft from launching this evening in New York City. We will return to court on Monday, to address issues pertaining to Buffalo and Rochester in addition to New York City."

Lyft, however, said in its own, later release that this was "a deliberate misstatement" by the attorney general's office and that the company had "agreed" to put off the launch:

"This is a positive step forward and a good demonstration of compromise in balancing innovation with government regulation," the Lyft statement reads, "and we appreciate the continued efforts of New York City government to find common ground for the betterment of New York."

The underlying issue involves whether Lyft, which uses a mobile app to connect perspective customers with part-time drivers of private cars, should be subject to the same transit regulations to which taxi and limousine services are held. Those regulations involve things like background checks for drivers, vehicle inspections, and insurance coverage. In today's request for a temporary restraining order, Schneiderman accuses the company of ignoring the law.

"As it has done in every other city in which it operates, defendant has simply waltzed into New York and set up shop while defying every law passed whose very purpose is to protect the People of the State of New York," the request (PDF) says. "Despite being warned and told to cease and desist by three separate regulatory and enforcement agencies, defendant has thumbed its nose at the law and continued with its plan to launch in what could become its largest market."

Lyft has said that the New York Taxi and Limousine Commission's licensing rules don't apply to the company's business model and that its safety measures surpass those taken by New York cab companies.

In a Tuesday blog post announcing the now-postponed launch, the company said, "As always, safety is our top priority and every driver has undergone a screening process that is more stringent than what's required for NYC taxis, including a strict background check, vehicle inspection, and $1,000,000 insurance that provides more than three times the $300,000 minimum for taxis."

On Wednesday, New York's Taxi and Limousine Commission issued a letter warning passengers that Lyft vehicles had not undergone the commission's safety inspection and that its drivers hadn't been subjected to the commission's drug and background checks. The letter also warned that drivers already licensed by the TLC would risk losing their vehicles and TLC licenses and being assessed a $2,000 fine if they accepted trip assignments through Lyft.

As mentioned in this afternoon's statement by the attorney general and the superintendent of financial services, the parties will return to court Monday to hash things out. Lyft characterized that as proof that the postponement was voluntary: "There would be no need for a hearing on Monday if a TRO or injunction was granted," it said in today's statement.

We've asked the attorney general's office for a response to the latest Lyft statement and will update this post when we have more information.

 

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