A tech company's launch of its ride-sharing service in Brooklyn and Queens Friday night has got regulators hot on its tail.
The state's Department of Financial Services sent Lyft's CEO a "cease-and-desist" letter Thursday for acting in "bad faith" by allegedly hiding its intentions to operate in New York City during a meeting last month and violating insurance laws in its coverage for drivers. The letter was published by Crain's New York Business.
"These violations place New Yorkers at risk, and inappropriately shift the insurance costs of a commercial enterprise to private citizens and their insurers," the letter from DFS Superintendent Ben Lawsky said.
The Taxi and Limousine Commission this week also sent a notice warning potential passengers that Lyft's service -- in which drivers use their own cars to pick up users who pay through donations, then rate each other -- is unauthorized and threatened drivers with seizing their cars and fines up to $2,000. The TLC said Lyft is out of compliance when it comes to safety requirements and licensing.
"The agency will be conducting enforcement operations to ensure compliance with the city's rules and laws," the TLC wrote Wednesday.
Lyft, however, says TLC rules don't apply to its service and released a "safety-commitment" touting its driver standards, including a national criminal and driving history check, and a zero-tolerance policy for drugs and alcohol. Lyft said its insurance policy covers all vehicles.
"We're having productive conversations with the DFS and believe we can resolve every issue outlined in the letter," said Lyft spokeswoman Erin Simpson.