New York isn't exactly welcoming ride-sharing app Lyft with open arms as the company prepares to launch in the city on Friday.
The NYC Taxi and Limousine Commission issued a statement Wednesday that could put Lyft's plans in jeopardy: "Lyft has not complied with TLC's safety requirements and other licensing criteria to verify the integrity and qualifications of the drivers or vehicles used in their service, and Lyft does not hold a license to dispatch cars to pick up passengers."
Other apps like Uber and Hailo are part of New York's e-hail pilot program and have been sanctioned by the TLC. But to gain the commission's approval, Uber and Hailo had to abide by TLC rules. Uber's low-cost ride-sharing service UberX can't use average folks driving their own cars to offer rides, like it does in other cities.
That's where Lyft has already run afoul of New York regulators. The TLC requires drivers and cars to undergo inspections in order to give rides for hire. Lyft conducts its own checks, but that's not good enough for the commission.
"Unsuspecting drivers who sign up with Lyft are at risk of losing their vehicles to TLC enforcement action, as well as being subject to fines of up to $2,000 upon conviction for unlicensed activity," the TLC said Wednesday.
But Lyft isn't suspending its plans to launch in Brooklyn and Queens on Friday, according to the New York Times, guaranteeing a showdown between the company and regulators.
New York has proved itself a tough city to launch a "disruptive" business. The state has repeatedly cracked down on Airbnb for flouting short-term apartment rental laws, and just this week Uber had to change its surge-pricing policy after violating the state's laws against price-gouging during emergencies.
I bet Lyft is wishing it had hired away a former TLC exec, like Uber did earlier this summer to guide the company's policy development and community engagement.
Sign up for CIO Asia eNewsletters.