In news that will really bum out ride-sharing service Uber, other ride-sharing service Lyft can legally operate in New York City starting tonight at 7 p.m., the company announced on their blog. Lyft, which launched in 2012, operates in dozens of cities around the country already, where you can recognize their cars by the enormous, fuzzy, disquieting pink mustaches affixed to the front bumper. The company expanded operations into Rochester and Buffalo in April, and said they’d have cars in Brooklyn and Queens on July 11. (In New York, the company will reportedly opt to forego the mustaches.) That was unwelcome news to State Attorney General Eric Schneiderman and top financial regulator Benjamin Lawsky, who filed a lawsuit against them earlier this month, saying the company’s ride offerings amounted to an unlicensed livery service.
In their complaint, Lawsky and Schneiderman accused Lyft of operating “in open defiance of state and local licensing and insurance laws designed to protect the lives and well-being of New Yorkers.” Their main concern is that Lyft drivers are private citizens, not commercial drivers with licenses from the Taxi and Limousine Commission (TLC). The TLC was also unamused, issuing a statement July 9 saying Lyft was “unauthorized” in New York City, and adding, for good measure, that Lyft drivers could see their cars impounded by the TLC and fines of up to $2,000.
Lawsky and Schneiderman added in their complaint that they’d met with Lyft executives on July 9 and urged them to postpone their New York City launch. “Lyft rejected these overtures,” they write. So the two regulators filed an injunction against the company to halt the rollout here.
So what changed? Just one enormous thing: Lyft agreed to use only TLC-licensed drivers in the city, and to halt their operations by August 1 in Rochester and Buffalo. In their release, Lyft makes it clear they’d like this to be a temporary solution, vowing they’ll find a way to let “neighbors driv[e] neighbors.” The company writes:
This agreement is the first big step in finding a home for Lyft’s peer-to-peer model in New York. Community-powered transportation — neighbors driving neighbors in their personal cars — ensures broader access to more affordable rides in places with limited transit options, like the outer boroughs of Brooklyn and Queens. We’ll continue to work with the TLC, Department of Financial Services, and the Attorney General’s office to craft new rules for peer-to-peer transportation in New York. We look forward to bringing the most affordable options to the areas that need it most, powered by their local residents.
Lyft has launched a petition on Change.org, lobbying the New York City council to “remove barriers to transportation innovation.” That’s an approach that, as you may recall, had exactly zero success when AirBnb tried it on New York state legislators.
In a joint announcement, Schneiderman and Lawsky promise vaguely to keep working with the company to find a solution: “We will continue to work with Lyft so that any future business it undertakes meets that standard and protects consumer safety,” the write. “We look forward to exploring solutions that enable companies in the sharing economy to operate and thrive throughout New York State.”
That probably won’t quell the concerns of New York’s cabdrivers; a Crain’s-sponsored conference on taxis earlier this week featured lots of passive-aggressive commentary from drivers as well as former TLC commissioner Matthew Daus, who called companies like Lyft and Uber “a Silicon Valley cartel” intent on a “hostile takeover.”
An earlier version of this story neglected to note that Lyft cars will be mustache-less in New York. The cars will be clean-shaven. We regret the error, as well as dashing your fondest mustache-related hopes.