Watch CBS News

Lyft Begins New York City Service After Agreement Reached With State

NEW YORK (CBSNewYork/AP) -- The on-demand ride-sharing app Lyft began offering limited service in New York City Friday after reaching an agreement with officials to resolve regulatory issues that prompted a lawsuit by the state.

New York Attorney General Eric Schneiderman and Department of Financial Services said Lyft agreed to operate "in full compliance'' with existing laws and regulations and that it will start the new service with commercial drivers only.

"We are pleased that our offices have reached an agreement today with Lyft," Schneiderman and Department of Financial Services Superintendent Ben Lawsky said in a joint statement. "We are firmly committed to the notion that regulators can work constructively with companies so that new ideas can come to the market and that smart regulation should create an environment where innovators can compete.''

"We've finalized an agreement to offer immediate access to our friendly, affordable rides through a TLC-licensed model beginning at 7 p.m.," Lyft spokeswoman Katie Dally said.

In conjunction with the launch, Lyft selected some residents to be a "Lyft Pioneer." Those who were selected received unlimited free rides for the next two weeks.

The ride-sharing service spans all five boroughs of New York City.

Dally said Lyft would expand the limited service in the coming weeks.

The Taxi & Limousine Commission had posted a notice two weeks ago, in advance of the company's initial planned startup in Brooklyn and Queens, that its so-called ride share service at that time had not complied with the commission's safety requirements and other licensing criteria to verify qualifications of its drivers and vehicles.

San Francisco-based Lyft's plan to bring its pink-mustachioed car service to the New York City market was then halted after the state officials sued. They claimed the company operates as a traditional for-hire livery service using mobile technology that is subject to regulations, not a peer-to-peer transportation platform as claimed.

Both sides had been in court-directed negotiations since.

TLC Chair Meera Joshi said Lyft will now be a fully licensed for-hire service in New York City.

"The drivers are licensed by us which means they've undergone a criminal background check, they've passed a drug test, they're over 21 years old, they've taken defensive driving courses," Joshi told 1010 WINS. "The vehicles are also licensed by us which means they carry the appropriate insurance so if there is an accident, people in the vehicle will have coverage and they've undergone a 200-point inspection."

Joshi told WCBS 880's Jim Smith Lyft will be no different than any other for-hire transportation service.

"Now they're going to operate a base and use TLC licensed drivers and licensed vehicles," Joshi said.

Lyft Says It's Starting New York City Service After Agreement Reached With State

Joshi said that will give customers an avenue of redress if there is an issue with the driver or vehicle.

The officials and company also said it will suspend operations in Buffalo and Rochester Aug. 1 while resolving regulatory issues there.

"We will continue to work with Lyft so that any future business it undertakes meets that standard and protects consumer safety,'' Schneiderman and Lawsky said.

Dally said that Lyft will work with authorities "to align New York State's insurance laws and regulations with emerging technologies of the 21st century.''

Check Out These Other Stories From

(TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.