Lyft's Brooklyn and Queens expansion plan postponed

ALBANY, N.Y. -- New York's attorney general filed a lawsuit with the New York Supreme Court on Friday to block Lyft, the on-demand ride-sharing app, from operating in New York.

The lawsuit was filed only hours before San Francisco-based Lyft planned to enter the New York City market. The suit 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 lawsuit said filed in state court in Manhattan. It alleges that Lyft began operating in Buffalo and Rochester without authorizations in April and currently violates various laws.

Attorney General Eric Schneiderman requested a court order to stop its New York service until the suit is resolved, plus a civil penalty and loss of profits.

"After Lyft rejected a reasonable request by the State to delay its launch, we filed a motion for a temporary restraining order in State Supreme Court this morning. As a result of that action, the court has granted the State a temporary restraining order preventing Lyft from launching this evening in New York City. We will return to court on Monday, to address issues pertaining to Buffalo and Rochester in addition to New York City," Schneiderman said in a written statement.

Lyft responded Friday afternoon in a statement saying, ""There was no TRO or injunction granted today. Instead, the judge adjourned to Monday and we agreed to hold our launch and maintain status quo. We are obtaining the court transcript, and we will obtain statements by those in court to show this is a deliberate misstatement by the AG and DFS. There would be no need for a hearing on Monday if a TRO or injunction was granted. As further proof that court was adjourned, the AG's insurance claims were never presented and Lyft had no opportunity to respond.

We agreed in New York State Supreme Court to put off the launch of Lyft's peer-to-peer model in New York City and we will not proceed with this model unless it complies with New York City Taxi and Limousine regulations. We will meet with the TLC beginning Monday to work on a new version of Lyft that is fully-licensed by the TLC, and we will launch immediately upon the TLC's approval. This is a positive step forward and a good demonstration of compromise in balancing innovation with government regulation, and we appreciate the continued efforts of New York City government to find common ground for the betterment of New York.

We will celebrate our upcoming launch at an event tonight as scheduled with members of New York's Lyft community."

A day earlier, the New York City Taxi & Limousine Commission posted a notice that, in light of Lyft's announced plans to offer free rides in Brooklyn and Queens starting Friday evening, its so-called ride share service is unauthorized in the city, that it has not complied with the commission's safety requirements and other licensing criteria "to verify the integrity and qualifications of the drivers or vehicles used."

Lyft spokeswoman Erin Simpson told the Daily News that the company was "in a legal process with local regulators" on Friday "and will proceed accordingly." The company seeks to work collaboratively with officials and has in cities and states across the country, she said.

In April, the on-demand ride-sharing app best known by the fuzzy pink mustaches on its cars, said it was launching its service in 24 new locations, nearly doubling the startup's U.S. markets.

Meanwhile, its rival Uber agreed with Schneiderman's office on Tuesday to limit prices during emergencies, natural disasters or other unusual market disruptions consistent with New York's law against price gouging. Uber later said it was adopting that policy in its other markets nationally. Its rates rise and fall with demand. On Monday, Uber said it was temporarily cutting New York City prices in a bid to compete with taxis.