Lyft Is Launching in New York City Tonight

Moneybox
A blog about business and economics.
July 25 2014 12:48 PM

Lyft Is Launching in New York City Tonight

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Get ready for those pink mustaches alongside yellow cabs.

Photo by Justin Sullivan/Getty Images

Two weeks after regulators brought a screeching halt to Lyft's New York City launch, the ride-sharing service has reached an agreement with the attorney general's office to begin serving customers in all five of the city's boroughs. Starting at 7 p.m. this evening, you can expect to see Lyft's pink-mustachioed cars roaming the streets alongside New York's famous yellow cabs.

On its blog, Lyft is heralding the agreement as a victory for ride-sharing services and affordable transit. "This agreement is the first big step in finding a home for Lyft's peer-to-peer model in New York," the company writes. "Community-powered transportation—neighbors driving neighbors in their personal cars—ensures broader access to more affordable rides in places with limited transit options, like the outer boroughs of Brooklyn and Queens."

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As great as that sounds, it's not really a coup for community transportation. A statement on the attorney general's website puts things more bluntly: "In the agreement entered into today, Lyft has agreed to operate in New York State in full compliance with existing laws and regulations. The company will launch in New York City with commercial drivers only and will operate in a manner that is consistent with existing laws and regulations." Beginning Aug. 1, Lyft will also cease its current operations in Buffalo and Rochester.

The deal that the AG's office has reached with Lyft sounds a lot like one it settled on with Uber, the competing ride-sharing platform. Unlike in other cities, where Uber tends to offer a commercial service and a more casual ride-sharing option, its New York operations are purely commercial (their drivers are commercially licensed and their cars commercially insured) to comply with regulation.

Lyft resisted going this route initially because, as co-founder John Zimmer told me recently, asking Lyft to become a commercial car service would be like asking Airbnb to become Hilton or telling eBay to open up a storefront. "That's just not what we do," he says. But for now, it looks like Lyft is willing to bite the regulatory bullet to expand its market into New York.

Alison Griswold is a Slate staff writer covering business and economics.

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