After a few
weeks of setbacks and standoffs, Lyft has found a way to bring its car service
to New York City: just abandon the core of its business model. The ride-sharing
startup, which lets ordinary people with privately owned cars use its service
to sell rides to other people, will launch Friday as more of a conventional,
Uber-like service that deploys only licensed livery divers.
Lyft has
wanted to come to New York for quite some time, and over the past two weeks
Lyft’s dispute with state and city officials has become the conflict du jour
between a sharing economy startup and local government. The fate of similar
startups in the big city has set an ominous backdrop to Lyft’s ordeal. After
Sidecar, another ride-sharing company, staged a local launch last year, it only
stuck around for a few weeks.
Lyft’s
experience got off to a bumpy start. The company first heralded its impending
arrival earlier this month, setting July 11 as its launch date. Then officials
from the state attorney general’s office and a financial-services regulator
sued to stop the launch over insurance concerns. The dispute got a bit nasty,
with New York Attorney General Eric Schneiderman pilloried by Lyft supporters
for hating the future, and his office accusing Lyft of negotiating in bad
faith.
STORY: New
York's Attorney General: Reluctant Scourge of the Sharing Economy
Even aside
from the showdown with powerful state officials, Lyft also hadn’t solved a more
basic problem: Running a car service with unlicensed drivers is illegal in New
York City.
Now,
however, Lyft says things are back on track in the Big Apple. The company
pledged to begin offering a limited version of its service using only drivers
licensed through the city’s Taxi and Limousine Commission—in other words,
basically the same workforce staffing New York City’s robust fleets of yellow
taxis, green cabs, and black cars—while trying to work toward implementing its
wider ride-sharing vision. “This agreement is the first big step in finding a
home for Lyft’s peer-to-peer model in New York,” the company wrote on its
website on Friday. “Community-powered transportation—neighbors driving
neighbors in their personal cars—ensures broader access to more affordable
rides in places with limited transit options.”
There’s no
guarantee that Lyft will be able to convince New York regulators to agree to
this vision. TLC Commissioner Meera Joshi has said she doesn’t plan to make
fundamental changes to the licensing requirements for hired drivers, which
seems to leave little room for the type of service that Lyft operates in other
places. Without that aspect of its business, Lyft will essentially be a
competitor to Uber, which already has a strong presence in the city.
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