Lyft delays NYC launch after regulatory trouble

TLC and state attorney general both seek to block the peer-to-peer service from entering the city

Technology trends and news by Steven Loeb
July 12, 2014
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If you're a resident of Brooklyn or Queens, and you were eagerly anticipating the launch of Lyft last night, you must have been pretty disappointed. 

Despite announcing earlier this week its intentions to launch in the outer boroughs of New York on Friday, Lyft, unsurprisingly, ran into some legal and regulatory trouble, which forced the company to delay its launch until further notice.

"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," Lyft wrote in a blog post on Friday.

"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."

That move came after the TLC warned drivers who were thinking of signing up for Lyft, calling it an “unauthorized service," and threatening to seize the vehicles of those driver as well as levy a $2,000 fine. On top of that, the company was also sued by the state attorney general's office and the Department of Financial Services, accusing the company of not actually being a peer-to-peer network but a traditional livery service. 

It has been reported that the attorney general also handed down a restraining order against Lyft, but the company says that no injunction was ever handed down because it agreed to hold off on the launch.

While many, I'm sure, would see these moves as a setback, Lyft is putting a positive spin on it.

"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," the company wrote.

I think that pretty much everyone, including Lyft, had to have seen these problems coming, especially considering how the TLC treated Uber when it launched in the city

Uber first attempted to launch a taxi service in New York City in September of 2012, but ran into trouble from the New York Taxi and Limousine Commission, causing it to shut down operations in October.

In early December, though, the Commission voted to allow a year long pilot program that will let people in New York to use their phones to connect with yellow cab drivers. It wasn't until June of last year that e-hailing services like Uber were officially allowed to return to New York City when a judge struck down a temporary restraining order on that e-hail pilot program.

While New York is generally thought of as a progressive city, when it comes to technology I guess the city has a long way to go

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