standard ‘Lyft’ Grounded, at Least Momentarily (Updated)

Temporary Restraining Order, Protests at ‘Ride-Share’s’ Opening Party
Protestors at Lyfts Opening Party (Photo by Matthew Taub)

Protestors at Lyft’s Opening Party (Photo by Matthew Taub)

UPDATE: a statement from Lyft (see bottom of post) disputes that a temporary restraining order was granted, and advises the next steps forward for the company. As of Tuesday, reports have surfaced that a Judge has urged the company to reach a settlement with the Attorney General’s office to comply with New York State law. Original story below.

A chic opening gala in Bushwick to celebrate the city’s embrace of popular ride-sharing application ‘Lyft’ hit a few snags Friday: a temporary order restrained the company from operating while taxi drivers and their supporters picketed Brooklyn’s Beau Monde awaiting entry into the kick-off party. But most attendees and passersby conveyed amused detachment, indifference, or even bewilderment regarding the protestor’s claims, while the ultimate legal prospects for the company’s entry in the New York market, like similarly grey-area app Airbnb, are hard to predict.

“We already have Uber, what’s the difference?” said one passerby who refused to be named.

“It’s more competition, and that’s a good thing–it helps lower prices,” said a man who identified himself as Andrew from Coney Island. “If these drivers are worried about Lyft beating them, why don’t they become Lyft drivers?”

Protestors and the Line for Entry to the Lyft Party (Photo by Matthew Taub)

Protestors and the Line for Entry to the Lyft Party (Photo by Matthew Taub)

But a state court earlier in the day saw things differently, halting Lyft’s launch originally slated for this evening. The State Attorney General, the NYS Department of Financial Services and the NYC Taxi and Limousine Commission issued repeated warnings to Lyft to not operate illegally before applying for the temporary restraining order.

“After Lyft rejected a reasonable request by the State to delay its launch, we filed a motion for a temporary restraining order in State Supreme Court this morning,” said Attorney General Schniederman in a joint statement with Superintendent Benjamin Lawsky of the Department of Financial Services. “As a result of that action, the court has granted an injunction preventing Lyft from launching this evening in New York City.”

For Bhairavi Desai, Executive Director of the New York Taxi Workers Alliance, the difference between Uber and Lyft is one of licensing and the potential erasure of hard-fought gains for the welfare of taxi drivers.

“Ride-share is an insult to the profession of tens of thousands of drivers, interrupting progress we have fought years to win in improving our working conditions,” Desai said. “Riders are left unsafe, uninsured and price gouged. Drivers are left impoverished & unprotected. All the while, the bosses at Lyft rake in the profits.”

According to Desai, for drivers under Lyft’s ride share program, there is no workers compensation in case of injury or death on the job, no temporary disability insurance in case of off-duty injury or illness, and no commercial insurance to protect individual drivers from losing their entire savings in case of an accident. Meanwhile, for riders, there is no cap on how much Lyft can charge, no training of drivers to prepare for the streets of New York, no inspection of the cars, and no background check or regulation to ensure public safety.

But in other locations, the company does have some level of safety procedures in place, and dire predictions have come to pass. Lyft currently operates in 60 US cities, including San Francisco, Los Angeles, San Diego, Sacramento, Seattle, Chicago, Washington D.C., Boston, Charlotte, Denver, Dallas, Atlanta, Baltimore, Phoenix, Minneapolis/St. Paul, St. Louis, Columbus, Indianapolis, Nashville, and Pittsburgh, with plans to expand both domestically and internationally. According to the company, Lyft generally costs about 30% less than the price of a similar-length cab ride. The company claims its success is based on its trust among users, and that it ensures competent and safe drivers by screening through Department of Motor Vehicle and personnel-type criminal background checks, conducting in-person interviews by Lyft employees, vehicle inspections and a two-hour training and safety session, and having a requirement that drivers be 23 years or older and have had a driver’s license for more than 3 years, along with a zero tolerance policy for drugs and alcohol.

At least one media outlet has speculated that owners of cab, limo and van fleets are behind nationwide protests over ride-sharing services like Uber and Lyft, as entrenched interests attempting to thwart innovation.

Still, for Victor Salazar of the Bronx, a taxi driver of 21 years protesting Friday evening, the app’s arrival spells the death of his profession.

“It’s equal to sanctioning illegal pickups,” Salazar said. “This will ruin hundreds of thousands of drivers’ lives. Where’s the respect for the dignity of our profession? I say get the hell out my city, Lyft. We don’t need your corporate greed.”

A taxi driver that happened to be on his shift that evening saw things differently.

“What’s the point?” said a green-cab driver who pulled up just a block from the scene, unaware of either the party or the picketing, but hungry for a fare. “Uber came in, despite protests about that too. This new app will get what they want. It’s useless to try to stop it.”

The Attorney General returns to Court Monday to address the issues leading to the temporary restraining order.

“We pursued this action only after repeatedly offering to work with Lyft in order to ensure that its business practices complied with the law,” Schniederman said. “We are pro-innovation and pro-competition, but allowing Lyft to flout dozens of different laws would, in addition to putting the safety of New Yorkers at risk, put law-abiding competitors at a substantial disadvantage. We are hopeful that Lyft will now recognize that it has to play by the same set of rules as everyone else.”

UPDATE – Here is the latest statement from Lyft on the New York launch:

“There was no TRO or injunction granted today. Instead, the judge adjourned to Monday and we agreed to hold our launch and maintain status quo. We are obtaining the court transcript, and we will obtain statements by those in court to show this is a deliberate misstatement by the AG and DFS. There would be no need for a hearing on Monday if a TRO or injunction was granted. As further proof that court was adjourned, the AG’s insurance claims were never presented and Lyft had no opportunity to respond.

“We agreed in New York State Supreme Court to put off the launch of Lyft’s peer-to-peer model in New York City and we will not proceed with this model unless it complies with New York City Taxi and Limousine regulations. We will meet with the TLC beginning Monday 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. This is a positive step forward and a good demonstration of compromise in balancing innovation with government regulation, and we appreciate the continued efforts of New York City government to find common ground for the betterment of New York. We will celebrate our upcoming launch at an event tonight as scheduled with members of New York’s Lyft community.”