Free is a very good price, unless it's from ride-sharing service Lyft in New York. The city's Taxi and Limousine Commission (TLC) today sent out a friendly warning to local denizens, reminding them that the service was still unauthorized within the city, and that it would be cracking down on Lyft drivers giving people rides. That includes drivers who have licenses as taxi or limo drivers, or are just normal licensed drivers who have signed up to drive for Lyft; both face fines of up to $2,000.
Launch first, ask questions later
Yesterday, Lyft announced it would begin serving in two parts of New York City — Brooklyn and Queens —complete with two weeks of free rides for first-time users. That's despite what was apparently just one sit-down meeting with the TLC to discuss compliance with laws that regulate local transportation services. Lyft believes it exists outside those laws since it's not using professional drivers or vehicles, and launched the service without the TLC's go-ahead. The company also argues that it requires a more stringent background check on drivers, and inspection of vehicles, along with higher liability insurance coverage.
New York has a storied history with alternate transportation companies including Uber and Sidecar, which both offer a mix of ride-share programs and their own fleet of vehicles with drivers. Uber's taxi program, which lets people hail cabs using its app, was initially banned in New York City, though eventually allowed to start up again. The city's also cracked down on ride-sharing services like Sidecar with sting operations, busting drivers making pickups. It's now threatening to do the same for Lyft, including taking away vehicles on top of any fines.
Update: Lyft isn't backing down. The company told drivers it will defend them legally and sent out this statement:
"Where we differ with the TLC is that we do not believe its licensing and base station rules apply to the Lyft ride-sharing model. We put safety first, and we have made this clear in our conversations with the TLC. The city of New York has stepped up as a leader in its support of innovation, and we are committed to working together with all parties to give New Yorkers access to this new, community-powered transportation option. There is a lot of hard work to be done in the days and weeks ahead, and we look forward to collaborating with the leaders of this world-class city to find a way forward."
That's a bold stance to take. Even Uber, which has repeatedly clashed with regulators, is capitulating to the TLC on its ridesharing service. "All of Uber’s current transportation options meet TLC requirements for licensing, insurance and driver screening," the company said in a statement. "Due to TLC regulations Uber does not currently have a ridesharing platform in New York. If regulators embrace ridesharing with a relaxed approach to licensing and enforcement with other companies, Uber will be excited to launch our ridesharing platform soon in the state of New York."