Lyft, a ride sharing service app, has been dealt a big blow just as it was beginning to accept passengers in New York City.
The New York State Attorney General's office has slapped the controversial transportation company with a restraining order as of Friday afternoon after cries of protest from New York City's Taxi and Limousine Commission. The commission says Lyft drivers will be prosecuted for operating without a license.
The service is expected to officially kick off at 7 p.m. Friday, July 11. It plans to mainly serve riders in Brooklyn and Queens.
As of Friday morning, prior to the restraining order news, Lyft already had more than 500 people signed up to be drivers in the city. Lyft also announced rides free of charge for the first two weeks.
"New York's founding drivers stand behind the idea that, together, we can make our big cities feel smaller and spark a movement that changes the way we view transportation," Lyft says in a statement.
Lyft has already received a cease and desist order, which it is ignoring. The company claims that it is a ride-sharing service, and the fact that it asks for "suggested donations" through the accompanying app at the end of a trip does not make it subject to the same regulations as taxi services. The TLC says that Lyft is simply a paid ride service with a technology angle.
The TLC's primary concern is that Lyft's vehicles and drivers have not gone through the certification process that covers taxi and black car services in the city. Lyft drivers are ordinary citizens driving their personal vehicles, and although the company does perform background checks and vehicle inspections, neither are as detailed as the official process. The TLC has issued a statement notifying the public that Lyft is an unauthorized operation and should not be used. Lyft drivers could also be hit with large fines for operating without a license.
"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 $2,000 upon conviction for unlicensed activity," the TLC says in the statement.
TLC Chairwoman Meera Joshi feels that Lyft is taking advantage of drivers who see the service as an easy way to make a bit of extra money.
"I don't think the drivers understand the risk they're taking when they sign up to be a Lyft driver," Joshi says. "It's a scam, really. They could lose their cars and it'll cost them a lot of money."
Lyft President John Zimmer says the company will cover any fees incurred by Lyft drivers, although he hopes it won't come to that. Regardless of Zimmer's hopes, the TLC seems intent on enforcing regulations and cracking down on Lyft.
