The on-demand ride-sharing app Lyft postponed its scheduled Friday launch in New York City while a state judge will wait until next week to consider whether its planned operations violate state and local laws.
The state attorney general's office and the Department of Financial Services sued only hours before San Francisco-based Lyft planned to enter the market. Their joint lawsuit said the company actually operates as a traditional for-hire livery service using mobile technology, not a peer-to-peer transportation platform as claimed.
The company operates "in open defiance" of state and local licensing and insurance laws, according to the suit filed in Manhattan. Authorities allege Lyft began operating in Buffalo and Rochester without authorizations in April and already violates various laws, another issue they expect to further argue Monday.
Justice Kathryn Freed told The Associated Press she agreed to consider Lyft's response
Justice Kathryn Freed told The Associated Press she agreed to consider Lyft's response Monday afternoon provided the company not launch in the meantime.
Attorney General Eric Schneiderman and Department of Financial Services Superintendent Ben Lawsky are seeking a court order to stop the company's New York service until the suit is resolved, plus a civil penalty and loss of profits.
"We pursued this action only after repeatedly offering to work with Lyft in order to ensure that its business practices complied with the law," they said in a statement. "Instead of collaborating with the state to help square innovation with statute and protect the public ... Lyft decided to move ahead and simply ignore state and local laws."
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