Michael Virtanen
July 11, 2014

NY attorney general sues to stop ride-sharing Lyft

ALBANY, N.Y. (AP) — New York’s attorney general filed a lawsuit Friday to block Lyft, the on-demand ride-sharing app, from operating in New York.

The lawsuit was filed only hours before San Francisco-based Lyft planned to enter the New York City market. The suit said the company actually operates as a traditional for-hire livery service using mobile technology, not a peer-to-peer transportation platform as claimed.

The company operates “in open defiance” of state and local licensing and insurance laws, according to the lawsuit said filed in state court in Manhattan. It alleges that Lyft began operating in Buffalo and Rochester without authorizations in April and currently violates various laws.

Attorney General Eric Schneiderman requested a court order to stop its New York service until the suit is resolved, plus a civil penalty and loss of profits.

Calls to the company’s lawyer by The Associated Press were not immediately returned.

A day earlier, the New York City Taxi & Limousine Commission posted a notice that, in light of Lyft’s announced plans to offer free rides in Brooklyn and Queens starting Friday evening, its so-called ride share service is unauthorized in the city, that it has not complied with the commission’s safety requirements and other licensing criteria “to verify the integrity and qualifications of the drivers or vehicles used.”

Lyft spokeswoman Erin Simpson told the Daily News that the company was “in a legal process with local regulators” on Friday “and will proceed accordingly.” The company seeks to work collaboratively with officials and has in cities and states across the country, she said.

In April, the on-demand ride-sharing app best known by the fuzzy pink mustaches on its cars, said it was launching its service in 24 new locations, nearly doubling the startup’s U.S. markets.

Meanwhile, its rival Uber agreed with Schneiderman’s office on Tuesday to limit prices during emergencies, natural disasters or other unusual market disruptions consistent with New York’s law against price gouging. Uber later said it was adopting that policy in its other markets nationally. Its rates rise and fall with demand. On Monday, Uber said it was temporarily cutting New York City prices in a bid to compete with taxis.

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