The New York State attorney general won a court order Friday preventing the launch of a ridesharing service in New York City, and he is seeking to shut down the service in Buffalo and Rochester until it comes into compliance with state law.
Also, Buffalo Police Commissioner Daniel Derenda said Friday that he will instruct his officers to ticket Lyft drivers if they are driving for hire without the proper license.
Attorney General Eric T. Schneiderman and Department of Financial Services Superintendent Benjamin M. Lawsky sought a temporary restraining order and preliminary injunction in State Supreme Court in New York City against Lyft.
The service began operating in Buffalo in April. When Lyft and state lawyers return to court Monday, operation in the Buffalo and Rochester markets will be addressed, according to Schneiderman’s office.
“As it has done in every other city in which it operates, defendant has simply waltzed into New York and set up shop while defying every law passed whose very purpose it is to protect the People of New York,” according to the state’s legal papers.
Lyft planned to begin service Friday evening in New York City but said it would not until it complies with city taxi regulations.
“We are in a legal process with local regulators today and will proceed accordingly,” spokeswoman Katie Dally said in an email. “We always seek to work collaboratively with leaders in the interests of public safety and the community, as we’ve done successfully in cities and states across the country, and hope to find a path forward for ride sharing in New York.”
The service allows people looking for rides to use a smartphone application to connect with drivers who use personal cars to take the riders where they want to go. Riders can identify the cars by fluffy pink moustaches hanging from the front. Riders are asked for a donation based on a rate schedule that takes into account time and distance.
The service is slightly cheaper than a taxi in Buffalo.
State authorities and Lyft representatives met Thursday but could not come to an agreement, according to the state’s legal papers.
Though Lyft has maintained that riders and drivers are covered by its insurance policies, state regulators raised concerns. The state’s legal filing revealed three dozen Lyft drivers across the country have had their personal insurance policies canceled because they drove for hire without the knowledge of their insurers.
Thursday, Lyft converted an excess policy to a personal policy for its drivers, though the state said neither Lyft nor its insurer, James River, is licensed to do business in the state.
Taxi and livery companies have lobbied Buffalo officials to make the service operate under the same regulations as their drivers. Lyft has maintained that it is not a taxi service and therefore does not need to abide by the same regulations that taxis must follow.
The state Department of Financial Services this week sent a cease-and-desist letter to Lyft’s headquarters in California. Lyft said that it would not comply with the letter.