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TLC Declares War Against Lyft, Calls Service "Unauthorized"

By

Rebecca Fishbein

Published Jul 10, 2014

Modified Jul 10, 2014

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Lyft

By

Rebecca Fishbein

Published Jul 10, 2014

Modified Jul 10, 2014

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[UPDATE BELOW] Well, so much for Lyft. The pink-mustachioed ride-share service was set to invade Brooklyn and Queens on Friday, but the Taxi and Limousine Commission has DECLARED WAR, calling Lyft an "unauthorized service" and threatening to seize Lyft drivers' vehicles. It was fun while it lasted, which was for approximately -48 hours.

Lyft's legal standing in the city has been contested for some time because its drivers aren't licensed by the TLC, though the company claimed it could skirt that issue by, erm, technically not employing its fleet of laypeople. Apparently, the TLC had initially requested Lyft put its drivers through the same background checks taxicab drivers are required to go through, like drug tests, criminal checks and regular inspections. But according to a blast put out by the commission last night, Lyft's a no-go.

"[T]he New York City Taxi and Limousine Commission (TLC) reminds its licensees and the public that Lyft’s 'ride share' service is unauthorized in New York City," the TLC said in a statement yesterday. "Lyft has not complied with TLC’s safety requirements and other licensing criteria to verify the integrity and qualifications of the drivers or vehicles used in their service, and Lyft does not hold a license to dispatch cars to pick up passengers."

Now, the battle lines are officially drawn—the TLC says it reserves the right to seize Lyft drivers' vehicles and fine them heavily if they're caught picking up fares. Even TLC-licensed drivers are at risk, according to the commission, provided they accept a passenger through Lyft.

A spokesperson for the company tells us Lyft plans to "continue to work with all stakeholders to create a path forward," and they released a "New York Safety Commitment" statement [pdf] yesterday in response to the TLC:

Lyft is the latest evolution of mobile-based ridesharing — a friendly, safe, and affordable transportation option that matches people who need rides with people who have cars.

As industry pioneers setting the gold-standard for safety and designing every part of Lyft with safety front of mind, we commit to:

• Prior to permitting a person to act as a driver on its digital network, Lyft will obtain and review a criminal history report for such person. The criminal history check will be a national criminal history check including the national sex offender database. A person with disqualifying convictions will not be permitted driver access to the Lyft network.
• Prior to permitting a person to act as a driver on its network, and quarterly thereafter, Lyft will obtain and review a driving history report for such person. A person with disqualifying traffic violations will not be permitted driver access to the Lyft network.
• Drivers on the Lyft network will adhere to state insurance requirements and Lyft will maintain a business automobile excess liability insurance policy, which covers all vehicles operated by drivers on the Lyft network, with a minimum combined single limit of one million dollars for each occurrence of bodily injury and property damage for accidents involving a vehicle and Lyft operator in transit to or during a trip.
• Lyft will implement a zero tolerance policy on the use of drugs or alcohol applicable to any driver on the Lyft network, provide notice of the zero tolerance policy on its website, as well as the procedures to report a complaint about a driver with whom the passenger was matched and for whom the passenger reasonably suspects was under the influence of drugs or alcohol during the course of the ride, and immediately suspend said driver upon receipt of a passenger complaint alleging a violation of the zero tolerance policy. The suspension will last the duration of the investigation.
• All vehicles on the Lyft network will be of model year 2000 or newer and pass a 19-point safety inspection conducted annually by Lyft or a third party before being used to provide a service.
• Drivers on the Lyft network will accept only rides prearranged through the Lyft mobile application and will not solicit or accept street-hails
• Lyft will maintain a 24/7 support team available via telephone and email and trained to assist both drivers and passengers.
• Lyft will maintain a driver-training program designed to ensure that each driver safely operates his or her vehicle prior to the driver being able to offer service.
• To keep community standards high, the Lyft mobile application will allow passengers and drivers to each provide feedback on a 5-star scale after every ride. If either party rates their match 3-stars or lower, they will never be matched again. If a driver’s average feedback falls below 4.6 out of 5 stars, that driver will no longer be permitted driver access to the Lyft network.

The Lyft spokesperson tells us that the company intends to go ahead with Friday's launch. They're offering two weeks of free rides, so download the app now if you're down to be part of the Ride-Share Revolution.

Update 12:16 p.m.: Lyft has been issued a cease-and-desist notice by the state Department of Finances, according to Crain's New York. Superintendent Benjamin Lawsky has accused the company of failing to disclose that they would be launching in New York City, and says Lyft's $1 million-per-car insurance policy could drum up insurance for private vehicles. "Lyft's ongoing law violations will not be tolerated and must halt," he wrote in a letter to the company's CEO earlier this week.

A spokesperson for e-hail service Uber says the company, which operates legally in the city, may consider its own rideshare program now that Lyft's likely out of the way:

All of Uber’s current transportation options meet TLC requirements for licensing, insurance and driver screening. Due to TLC regulations Uber does not currently have a ridesharing platform in New York. If regulators embrace ridesharing with a relaxed approach to licensing and enforcement with other companies, Uber will be excited to launch our ridesharing platform soon in the state of New York.

Tagged

e-hail

lyft

ride sharing

tlc

uber

Rebecca Fishbein

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