New York AG Battles Taxi Competition from Lyft P2P

Lyft peer to peer (P2P) shared-ride service said on its blog that Lyft will delay its New York City launch in Brooklyn and Queens after the New York State Attorney General said a court issued a temporary restraining order against the company, because it supposedly did not comply with the requirements of the NYC Taxi and Limousine Commission. Yet there may be still seems to be hope for New Yorkers that are used to ridiculously high priced taxi/limo services that Lyft will launch.  

According to Lyft:

Today we agreed in New York State Supreme Court to put off the launch of Lyft’s peer-to-peer model in New York City and we will not proceed with this model unless it complies with New York City Taxi and Limousine regulations. We will meet with the TLC beginning Monday to work on a new version of Lyft that is fully-licensed by the TLC, and we will launch immediately upon the TLC’s approval. This is a positive step forward and a good demonstration of compromise in balancing innovation with government regulation, and we appreciate the continued efforts of New York City government to find common ground for the betterment of New York.

New York City makes a ton of money off constraining the number of taxis in “The City” to just 13,000. An auction on November 13, 2013 by the Taxi and Limousine Commission for new “medallion” authorizations to operate taxis in The City had a high bid for a “mini-fleet” of two taxis that exceeded $2.5 million. New York Times reported that the total auction proceeds were more than $200 million for the 200 medallions sold.

New York regulators are desperate to claim that the P2P ride-sharing service is merely a livery-car and insurance business operating in defiance of the law. New York Attorney General Eric T. Schneiderman filed court papers on July 11^th seeking an order to stop the company from operating in the state.  

The action named Benjamin Lawsky, the superintendent of the state’s Department of Financial Services, as plaintiff. Last month Lawsky slowed down Lyft’s launch by obtaining a court “cease-and-desist letter” stating that the company must immediately obtain a blanket liability policy.  Lyft has since complied with insurance requirements. 

Lyft launched earlier this year in Buffalo and Rochester and they are reporting gang-buster growth. The company said on its web site that they are “filling a transportation gap by allowing car owners to give rides in exchange for suggested donations.” Schneiderman has not sought to prevent the service from continuing in Buffalo and Rochester. 

Lyft claims that the judge didn’t issue a restraining order, calling Messrs. Schneiderman and Lawksy’s characterization of the court’s action is “a deliberate misstatement.” Both sides are continuing the battle in a July 14^th court hearing.