Ride-sharing startup Lyft nixed its planned NYC launch on July 11 after a battle with the NYC Taxi and Limousine Commission (TLC) over licensing and safety requirements. On July 8, New York’s Department of Financial Services (DFS) hit Lyft with a cease-and-desist letter, and the company quickly backtracked from its boast that it would launch despite regulatory threats.
"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," a Lyft spokeswoman said in a statement July 11. Lyft’s coverage in New York is currently restricted to Buffalo and Rochester—last Friday’s launch would have brought service to Brooklyn and Queens, as well.
New York Supreme Court Judge Kathryn Freed set a new court date of Friday, July 18, for Lyft, the TLC, and the state attorney general's office in the hopes all parties will come to a viable agreement—and judging from the DFS’s cease-and-desist letter, there’s plenty to talk about.
According to the DFS, Lyft "acted in bad faith" by concealing its "imminent plans" to operate in New York City, despite telling the DFS otherwise during a meeting in June.
But could the roadblocks Lyft is facing now be a boon for the company when (if?) it launches in NYC? In a city where there is demand for ride-sharing alternatives like Uber, such a heavy hand against this launch could serve to validate Lyft's efforts to "spark a movement that changes the way we view transportation." However, with Lyft backpedaling to comply with the TLC’s regulations, it will be interesting to see how much the company will be forced to compromise its vision.
Read the DFS cease-and-desist letter below.