With Help From Sidley, Lyft Lands in New York

, The Litigation Daily


New Yorkers should get used to seeing vehicles with facial hair.

Lyft Inc., the ride-sharing company whose drivers often sport pink mustaches on their front bumpers, reached a deal with New York regulators on Friday to allow the service to launch the same day in New York City. As part of an agreement approved by Manhattan state judge Kathryn Freed, Lyft will use only commercial drivers in the city and promised to comply with existing insurance laws and regulations. The company is represented by Sidley Austin.

The accord brings a swift end to a lawsuit filed two weeks ago by New York Attorney General Eric Schneiderman and the state's superintendent of financial services, Benjamin Lawsky. The officials had sought a temporary restraining order blocking Lyft's planned early-July entry to the New York market, and asked the judge to shut down its existing Rochester and Buffalo operations.

Although Lyft's driver and rider agreements embrace the language of the sharing economy—riders pay a "suggested donation" rather than a "fare"—the state's lawsuit claimed the company runs "a traditional 20th-century for-hire livery service and insurance business" that is subject to state regulations.

The defense team at Sidley, led by partner Martin Jackson, countered that Lyft isn't a traditional cab company, but a "real-time, mobile-based, peer-to-peer ridesharing platform."

"Since regulation of this peer-to-peer ridesharing industry is not covered by existing transportation laws or regulations, absent legislative action, plaintiffs cannot bootstrap existing laws onto Lyft that do not cover Lyft's rideshare program," they argued.

Following news of the AG's deal, Lyft announced on its blog that service would begin in all five boroughs Friday night at 7 p.m. as part of the settlement agreement. Lyft also agreed to suspend its current operations in Buffalo and Rochester by Aug. 1.

Sidley's Jackson didn't immediately respond to a request for comment. In a joint statement, Schneiderman and Lawsky said they will work with Lyft to make sure its future business is in compliance with the law. "We look forward to exploring solutions that enable companies in the sharing economy to operate and thrive throughout New York state," they said.

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