New York State’s Restriction on Ride Sharing Company Lifted in Buffalo and Rochester

Lyft Inc. recently settled a lawsuit filed against it by the New York State Attorney General’s Office for allegedly breaking state regulations.

Tech Times reports that on June 18th, Lyft Inc., a startup pickup service similar to Uber, made an agreement with the office of Attorney General Eric Schneiderman and the New York State Department of Financial Services after the former filed a lawsuit last year. Lyft Inc. has agreed to pay a $300,000 fine after violating initial terms in July 2014 which required its drivers to have permission to operate from the municipalities it intended to move into.

The lawsuit was prompted when the company unlawfully entered Buffalo and Rochester without the prior authorization from those city’s governments. Lyft Inc.’s operations were quickly suspended in those cities, and its emergence in New York City was hampered.

“Today’s agreement enables Lyft to grow and prosper within the bounds of state and local regulations, while the penalties imposed send the message that companies that attempt to skirt the law will be held accountable,” Schneiderman said.

It is estimated that 80-92% of lawsuits are settled out of court.

The July 2014 agreement allowed Lyft Inc. to operate in New York City as long as its drivers had commercial licenses from the city’s Taxi and Limousine Commission. This year, the new agreement stipulates the drivers must have car insurance from New York State-approved insurers. Moreover, the insurance plan must cover the drivers as they’re picking up customers.

Similar to Uber in operation, Lyft Inc. offers quick “cab” rides to people when they use the company’s app on their smartphones. Customers can be picked up within minutes, according to the company, and can pay using credit card.

The lawsuit settlement, however, does not require the company to update its services in New York City.

In order to make clear it’s abiding by the law, Lyft Inc.’s official insurance policy comes with this stipulation: “Our policy is available in all states in the U.S., except New York state.”