Over the last few years, two prominent ride-sharing companies have emerged. Uber and Lyft are increasing in popularity despite attempts by the taxi industry to shut them down.
Both companies are based on smartphone apps that allow users to request a pickup at their current location. Drivers are ordinary citizens using personal vehicles. Lyft adorns participating cars with a large pink mustache after inspection, and Uber also offers a premium black car service. Payments to the drivers are made through the app, and the company takes about 20 percent of the revenue.
The most prominent battleground between the two companies and the taxi industry is taking place in New York City. After recent price drops, Uber and Lyft charge equal amounts for their services, and both are undercutting yellow cabs, which have their rates regulated by the local government. Getting started as a driver also doesn't require a taxi medallion, which can cost upwards of $1 million.
Uber reached an agreement with the Taxi and Limousine Comission (TLC) to allow it to operate within the city. The company complies with New York City regulations, including operating out of a base in the city and putting its drivers through the certification process. However, Lyft wants looser restrictions for its drivers. Lyft does not use bases in its cities, operating solely through smarphones. It also uses its own background and vetting process for its drivers, and does not want to go through the official process.
The TLC insists that Lyft must comply with existing regulations, but Lyft isn't taking no for an answer. On July 11, the company will begin service in Brooklyn and Queens without authorization.
"Brooklyn and Queens are vastly underserved by public transit options compared to the rest of New York City," Lyft says. "In fact, just one of New York's 23 subway lines passes solely between boroughs, and 95% of taxi pickups happen in Manhattan or a local airport. The people of New York deserve more transportation options."
Lyft drivers operate at their own risk, however, as the city has already ruled against a driver of another ride-sharing comapny called SideCar. SideCar shut down operations in New York City in May, and Lyft may suffer the same fate.
"This is an extremely simple issue," says Allan Fromberg of the TLC. "If you are acting as a taxi or a car service, without the benefit of a license, the TLC will shut you down."