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Lyft Company Officials Due In Court To Discuss TLC Compliance

NEW YORK (CBSNewYork/AP) --  A popular ride sharing service won't be seen on the streets of New York, for now.

The company already offers its app-based service in 60 cities, but last week the TLC said Lyft is unauthorized to operate in New York City.

"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," the TLC said in a statement. "In keeping with the TLC's priority of protecting public safety and consumer rights, the agency will be conducting enforcement operations to ensure compliance with the city's rules and laws."

The agency warned that drivers offering rides through the Lyft app would be subject to fines and might have their cars confiscated.

Martin Jackson, an attorney for Lyft, argued that Lyft is not a for hire service.

"The program that Lyft operates is not for hire," Jackson said, "There is no requirement for payment."

Lyft officials will be meeting with the city commission "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,'' spokeswoman Katie Dally said.

Commission Chair Meera Joshi said they're gratified the company will be working with them on a service fully compliant with rules protecting public safety and consumer rights.

Lyft had planned to start its ride-sharing service in Brooklyn and Queens last Friday after signing up 500 people willing to use their own vehicles to carry passengers.

The company claims that the ride share works based on donations, not payments, CBS 2's Dick Brennan reported.

The state attorney general's office and the Department of Financial Services sued only hours before San Francisco-based Lyft planned to enter the market. Their joint lawsuit 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 suit filed in Manhattan. Authorities allege Lyft began operating in Buffalo and Rochester without authorizations in April and already violates various laws, another issue they expect to further argue Monday.

The state said that they want Lyft to comply as a matter of public safety.

Attorney General Eric Schneiderman and Department of Financial Services Superintendent Ben Lawsky wereseeking a court order to stop the company's New York service until the suit is resolved, plus a civil penalty and loss of profits.

"We pursued this action only after repeatedly offering to work with Lyft in order to ensure that its business practices complied with the law,'' they said in a statement. "Instead of collaborating with the state to help square innovation with statute and protect the public --- Lyft decided to move ahead and simply ignore state and local laws.''

On Monday, attorneys for Lyft said that they would not try to launch in New York City before coming to an agreement with the TLC.

Because Lyft agreed not to launch, Judge Kathryn Freed said that she would not issue a restraining order, but wanted everyone back in court on Friday.

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