Lyft drivers are regular people using their own cars in the 60-plus cities where the app operates, but New York City says that ride-sharing model won't fly. The app, which had planned to launch in Brooklyn and Queens on July 11, had to delay its rollout after Attorney General Eric Schneiderman sought a temporary restraining order.
Lyft is now saying that it will hit the streets of NYC with the city's Taxi and Limousine Commission-approved drivers as soon as the commission approves its launch. The company will work with eight taxi companies in New York, as Uber does for its low-cost UberX service. All parties are expected to appear in court at the end of this week to figure out if Lyft's brand of ride-sharing is legal.
So what's the big deal about the company's peer-to-peer model? New York regulators consider Lyft a for-hire car service, which means its drivers need commercial licenses and their cars must meet inspection requirements. Schneiderman, the Taxi and Limousine Commission, and the state Department of Financial Services said last week that Lyft just "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."
Lyft has argued that it isn't a taxi company and its model is outside the laws that currently govern for-hire car services. The San Francisco-based business has also claimed that its inspections, background checks, and insurance requirements are stricter than those required by the TLC.
In a court filing, Lyft said Schneiderman and Superintendent of Financial Services Benjamin Lawsky "have employed a strategy--involving misrepresentations to the public and noncompliance with statutory requirements--designed to destroy Lyft's business without due process."
Schneiderman has aggressively pursued other sharing economy companies like Airbnb and Uber for violating state regulations. His efforts have led to Airbnb's hand-over of host data and Uber's compliance with New York's law against price-gouging during emergencies.