Lyft is gearing up to launch in Brooklyn and Queens Friday, even though New York City’s Taxi and Limousine Commission says it’s illegal.
“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 licence to dispatch cars to pick up passengers,” the TLC said in a statement Wednesday.
In order for Lyft to be in good standing with the TLC, they’d have to apply and meet the criteria for having a TLC-licensed dispatch base. They’d also have to work exclusively with properly-licensed vehicles and drivers, TLC spokesperson Allan Fromberg told Business Insider via email.
However, Lyft disagrees with the TLC. Lyft doesn’t believe that the licensing and base station rules apply to its ridesharing model.
Uber hasn’t faced these same problems in New York.
“Uber’s operation in NYC is fully-licensed,” Fromberg said. “I believe they have six bases (five black car, and one luxury limo) affiliated with Uber, and they are dispatching TLC-licensed vehicles driven by TLC-licensed drivers. Here’s the confusing part. In some other cities, they call their so-called ‘rideshare’ component UberX, but here in NYC, where that form of operation is patently illegal, they use the term UberX to describe their lower-cost, lower-level black car service, which uses an older vehicle. So here, what they call UberX is markedly different than in some other cities. Quite clever, really, from a PR standpoint.”
It also probably doesn’t hurt that Ashwini Chhabra, the former deputy commissioner for policy and planning at the TLC joined Uber back in May.
The TLC outlined steps it could take against Lyft and its drivers in a notice released Wednesday.
“Unsuspecting drivers who sign-up with Lyft are at risk of losing their vehicles to TLC enforcement action, as well as being subject to fines of up to $US2,000 upon conviction for unlicensed activity,” the notice said. “TLC-licensed drivers are reminded that the New York City Administrative Code and TLC Rules prohibit them from accepting a for-hire trip that isn’t dispatched by a licensed base that is held accountable for the actions of its drivers and affiliated vehicles. TLC-licensed drivers who accept trip assignments from Lyft — which is not a licensed entity — are likewise at risk of losing their TLC driver licenses and vehicles to TLC enforcement action, as well as being subject to fines of up to $US2,000 upon conviction for unlicensed activity.”
But for what it’s worth, it seems that the TLC can’t actually prevent Lyft from launching in Brooklyn and Queens tomorrow.
“So, I’m really not at liberty to discuss specific ways available to us, but suffice it to say that we will use the resources available to us to protect public safety and consumer rights,” Fromberg said.
Meanwhile, Lyft is also getting attacked on another regulatory front. The company recently got slammed with a cease-and-desist letter from the state Department of Financial Services.
“Lyft’s ongoing law violations will not be tolerated and must halt,” Superintendent Benjamin Lawsky wrote in the letter, which was obtained by Crains New York.
According to the letter, Lyft has until today to respond regarding the suspension of service in New York.
“We’re having productive conversations with the DFS and believe we can resolve every issue outlined in the letter,” a Lyft spokesperson told Business Insider via email.
We’re expecting a call from Lyft later today about their plans for launching in New York and will update this story when we hear from them. For now, here’s Lyft’s “safety commitment” to New York, which the company provided to Business Insider.
NEW YORK SAFETY COMMITMENT
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.