Simply put, Lyft offers you rides in somebody’s personal car, driven by somebody with no special driving training and no commercial auto insurance.
That’s unlke car-sharing service Uber, whose drivers do have proper insurance, proper training, and must meet cleanliness and maintenance requirements, and pass a background check.
And it’s why Lyft has been issued a has been issued a “cease-and-desist” letter by the state Dept. of Financial Services, which also accuses the San Francisco-based firm of “acting in bad faith” and ordered it to stop all promotional activities New York State, including in Buffalo and Rochester, where it launched rides – also apparently illegally – a few weeks ago.
NY State also accuses Lyft of “acting in bad faith”.
Part of that bad faith is avoiding NYC car-for-hire rules by avoiding the words “fare” or “charge” or “pay”. Lyft invites a “donation” to the driver, which you and the driver negotiate. The driver kicks back 20% to Lyft.
According to Crain’s New York Business, the NYC Taxi and Limousine Commission, which licenses taxis, limousines and shared-ride companies like Uber, issued a notice Wednesday threatening to impound Lyft drivers’ cars and impose fines of $2,000.
The company had been planning to launch today in Brooklyn with free booze and a free performance by rapper Q-Tip.
The biggest problem with Lyft and its drivers may be is accident insurance.
Lyft is insuring its drivers for $1 million per ride, which is substantial. However, Lyft adds that coverage to the driver’s own policy, rather than via a corporate commercial policy, as TLC licenced companies have.
Since New York is a no fault auto insurance state, a Lyft accident can affect insurance rates for all of us.
Another issue for automotive journalists like me is the fuzzy pink mustache on the front grill that identifies Lyft vehicles. Depending on where the vehicle design and where driver attaches it, the fuzzy pink mustache could interfere with air flow that helps control engine temperatures. And that could be really important on hot summer days when engines are more likely to overheat.
So until further notice, avoid getting a lift from a car with a fuzzy pink mustache on the front grill.