July 25 (Bloomberg) -- Lyft Inc.’s pink mustaches got the green light in New York City.
The ride-sharing service, which is vying with Uber Technologies Inc. for customers hailing rides via smartphone applications, reached an agreement with the city to begin operating in all five boroughs tonight, the company said in a statement on its blog today.
Uber, Lyft and other car-booking companies are seeking to crack open the U.S. taxi and limousine market, estimated to be an $11 billion industry, according to IbisWorld Research. Lyft, which uses fuzzy pink mustaches to identify its cars, put its New York debut on hold two weeks ago, after city and state authorities said the company hadn’t complied with regulations. Limited services will start, with a full rollout in the coming weeks, San Francisco-based Lyft said.
“We are pleased to welcome Lyft as a fully-licensed for-hire service in New York City, and appreciate their having fulfilled their commitment to the TLC and to the court to act within the law,” said Meera Joshi, chair of the York City Taxi & Limousine Commission.
Lyft cars in New York will feature a small pink mustache hanging in the windshield, instead of the standard fuzzy version adorning car grilles. Lyft’s drivers in New York will have commercial licenses. While Lyft had originally intended to start a peer-to-peer ride-sharing service in New York using drivers without commercial taxi licenses, the TLC said today it isn’t discussing such a service with Lyft.
Uber, which has a high-end car-booking service for limos and luxury cars and has operated in New York since 2011, mainly competes with Lyft with its lower-priced car-sharing option, UberX. While UberX is a ride-sharing service that competes directly with Lyft in other cities, UberX drivers in New York have official taxi licenses.
Lyft also said it agreed to pause operations in the New York cities of Buffalo and Rochester by Aug. 1 as it works out insurance and regulatory issues with the attorney general’s office and the Department of Financial Services.
Commercial drivers are required to be tested for drugs, undergo background checks, take driving courses and have their cars inspected regularly, among other requirements, according to the New York City Taxi & Limousine Commission.
“Regulators can work constructively with companies so that new ideas can come to the market,” New York Attorney General Eric Schneiderman and Superintendent of Financial Services Benjamin Lawsky said in a joint statement today.
Lyft planned to begin New York operations with 500 drivers. In April, the startup received $250 million from investors including Alibaba Group Holding Ltd. and has been rolling out its service in new cities.
Uber was valued at $17 billion last month in a new financing round, making it worth more than public companies such as Hertz Global Holdings Inc. and retailer Best Buy Co.
Uber temporarily cut the price of its UberX service by 20 percent in New York earlier this month, striving to become cheaper than taxis as Lyft enters the car-service market.
The companies have also been racing to recruit drivers from each other and from taxis, local limousine services and other car-sharing apps such as Side.cr LLC and Hailo Network Ltd., their founders have said. By disrupting local taxi industries, car-booking and ride-sharing apps have faced lawsuits in various U.S. cities such as Chicago and demonstrations in cities from London and Madrid to Berlin and Paris.
Lyft filed its own suit against the New York attorney general, seeking to block a subpoena for operating documents. The company subsequently agreed to delay its start in order to avoid a court-ordered shutdown.
The city’s Law Department didn’t immediately respond to e-mails seeking comment on today’s agreements.
The cases are State of New York v. Lyft Inc., 451476/2014; City of New York v. Lyft Inc., 451477/2014; and Lyft Inc. v. Schneiderman, 156796/2014, New York State Supreme Court, New York County (Manhattan).
To contact the reporters on this story: Chris Dolmetsch in New York State Supreme Court in Manhattan at