Lyft Ends the Long Battle with New York Lawmakers by Paying $300K Fine

By | June 19, 2015

As marking an end to the long-held battle between the Lyft and the New York lawmakers, the rail-hailing company has agreed to pay $300K as a penalty to settle a dispute claiming it illegally functioned in the state.


Lyft, the popular rail-sharing company claimed to have violated New York state laws by failing to abide by the rules that its drivers carry livery insurance that covers drivers from when they receive a dispatch to the end of the ride. New York Attorney General Eric Schneiderman and former State Superintendent of Financial Services Benjamin Lawsky was the one who sued the company for violation last July.

“I have always been committed to fostering an innovative and competitive environment in which both new and existing companies can flourish in our great state,” said Schneiderman in a statement. “However, it is critical that the laws put in place to protect consumers and ensure fair competition are not violated in the process. Today’s agreement enables Lyft to grow and prosper within the bounds of state and local regulations, while the penalties imposed send the message that companies that attempt to skirt the law will be held accountable.”

Further to the settlement, driver of the company will be required to have appropriate insurance that has been authorized by New York authority. Also, Lyft, in case of expansion into other places, will require to notify cities and countires three weeks before it plans to start its operations. That rule was implemented because only few days official notice was given prior starting the service when Lyft launched in Brooklyn and Queens last year.

The agreement is not expected to affect the Lyft service. “Today’s mutually agreed upon settlement does not require any changes to existing Lyft service in New York,” said the company in a statement. “The settlement is part of our continued efforts to return true, peer-to-peer ride sharing to New York State at large, an effort supported by leaders and consumers across the state.” The company did not accept wrong doing as part of the deal.

Lyft, the ride-sharing service connects the passengers with drivers using the smart phone app. It has raised $1 billion in venture funding, valuing the company at $2.5 billion. It operates in more than 65 cities that includes San Francisco and Chicago.

This penalty is not new to the company. Lyft along with its rival Uber have dealt with regulatory battles, cease-and-desist letters and lawsuits from states and cities across the country. The company paid fine for drivers in Pennsylvania who faced $1,000 tickets for picking up passengers before the service got its official license in February. Government of California docked the company $20,000 back in 2012 for running an unlicensed charter business. Guess, governments enjoy to penalize the company.