Lyft Hits a Roadblock, Delays New York City Launch

Image: Jeff Chiu/Associated Press

Lyft will not launch on schedule in New York City on Friday night, despite a week of promises from the company to launch in the Big Apple.

The San Francisco-based ride-sharing startup hit a major regulatory roadblock on Friday, including a restraining order jointly filed by the New York Attorney General Eric Schneiderman and the city's Taxi and Limousine Commission (TLC).

Bloomberg first reported that the company would delay its launch until Monday, but a Lyft spokesperson has since confirmed the delay to Mashable. There is no new launch date in sight.

"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," Erin Simpson, a company spokesperson, wrote in a statement. "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."

Schneiderman tweeted Friday that the court had prevented Lyft from launching, implying the postponement was less of an agreement than a requirement. In a statement released later Friday afternoon, Schneiderman elaborated, claiming the court granted an injunction forbidding Lyft from launching until meeting in court one again on Monday.

"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," Schneiderman wrote in his statement. "We are hopeful that Lyft will now recognize that it has to play by the same set of rules as everyone else."

Lyft is refuting Schneiderman's claim of an injunction. "There was no [Temporary Retraining Order] or injunction granted today," Simpson wrote in her statement. "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 [Department of Financial Services]."

Lyft was scheduled to commence operations in Brooklyn and Queens on Friday, despite threats from the TLC earlier this week. The TLC issued a warning on Wednesday that drivers offering rides through the Lyft app would be subject to hefty fines and may even have their car confiscated.

These threats didn't faze Lyft at the time; a spokesperson said on Thursday that the launch was scheduled as planned. Lyft cofounder John Zimmer spent time Wednesday night with drivers in Brooklyn, outlining the company's strategy and informing them that Lyft would support them legally and financially should anything happen while they were driving.

That stance has clearly changed in the time since, though Lyft says it will still host a launch party Friday night as originally planned.

The regulatory issues revolve around passenger safety and proper licensing. New York requires drivers who transport paying customers to apply for special licenses and complete necessary background checks for both the driver and the vehicle. Lyft, which hasn't been approved by the TLC to operate, screens its drivers separately, and claims it has stricter requirements than New York.

The restraining order captures the city's obvious displeasure over Lyft's decision to launch before regulatory approval. This was included in the document's preliminary statement:

"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 is to protect the People of the State of New York. Despite being warned and told to cease and desist by three separate regulatory and enforcement agencies, defendant has thumbed its nose at the law and continued with its plan to launch in what would become its largest market."

You can read the restraining order in full below.

Lyft Restraining Order


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