Lyft Pays $300,000 To Settle New York State Lawsuit

Lyft agreed today to pay New York State $300,000 to settle allegations that the on-demand ride service violated New York laws.

Last summer NY Attorney General Eric Schneiderman and former NY Superintendent of Financial Services Benjamin Lawsky sued Lyft for operating illegally within the state.

The suit (embedded below) alleged that Lyft was operating an unlicensed for-hire livery service within New York. Additionally, Schneiderman and Lawsky accused Lyft of “running an unlicensed insurance business in New York,” as the company was selling group insurance policies directly to drivers.

In addition to the cash settlement, Lyft will require its driver to carry insurance issued by a state-authorized insurer. Additionally, Lyft must continue to comply with all other state and municipal laws applicable to livery services.

While Lyft has been in compliance with both of these rules since launching in New York City, today’s announcement resolves all outstanding legal action between Lyft and the state.

One of the reasons Lyft has struggled to expand throughout New York is that the the state considers the company a for-hire livery provider, meaning drivers are required to hold commercial licenses. This is different from states like California, where Lyft drivers do not need commercial licenses.

The company issued the below statement:

Today’s mutually agreed upon settlement does not require any changes to existing Lyft service in New York. The settlement is part of our continued efforts to return true, peer to peer ride sharing to New York State at large, an effort supported by leaders and consumers across the state.