Lyft's east coast expansion is already hitting serious legal traffic. Despite billing itself as the savior of New York City, the city's tax commission was quick to declare the e-hailing startup illegal. Now the state's attorney general and the Taxi and Limousine Commission have placed a temporary restraining order against the startup.
Lyft was at first undeterred by TLC's cease and desist letters. The startup's co-founder John Zimmer assured Inc. yesterday that the company was pushing forward with today's scheduled launch. However, the restraining order seems to have postponed the debut of their so-called "ride-sharing" offerings in New York's outer boroughs.
The attorney general makes it clear that New York sees Lyft as an illegal cab service:
As [Lyft] 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 the continued with its plan to launch in what could become its largest market. [...]
Lyft portrays itself as an innovative 21st century technology business. In reality, Lyft uses a smartphone app to run a traditional 20th century for-hire livery service, arranging ride for passengers on non-fixed routes in exchange for compensation.
Lyft has already postponed their New York launch until July 14th, hoping to broker a deal with government officials. In a statement to The Verge, a Lyft spokesperson stated "We are in a legal process with local regulators today and will proceed accordingly."