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Car-sharing service Lyft plans to defy Minneapolis ban

By Julio Ojeda-Zapata, Pioneer Press, St. Paul, Minn.
McClatchy-Tribune Information Services

Feb. 26--Minneapolis and the taxi-like car-sharing service Lyft are on a collision course.

San Francisco-based Lyft, whose driver-owned cars are festooned with magenta mustaches, said Tuesday that it will begin operations in Minneapolis this week -- defying a city prohibition on the unlicensed service.

Lyft legally launched a St. Paul-only service in August. But Minneapolis insists that Lyft and similar driver-owned services be licensed as taxi companies. This requires a city license for the driver, another for the vehicle with inspections and commercial insurance.

If Lyft launches in defiance of its rules, the city said drivers will be ticketed and their vehicles impounded.

The city already has done this with UberX, a service similar to Lyft that has been operating for about a month in Minneapolis.

In a email Tuesday, Lyft spokeswoman Paige Thelen confirmed that the service will launch Thursday in Minneapolis and even plans a launch party from 6 to 10 p.m. (bitly.com/lyftlaunchparty).

"After productive conversations with city leaders," Thelen said, "there has been recognition that Lyft's peer-to-peer business model cannot be easily defined by existing framework for taxis or for-hire vehicles."

Erin Simpson, Lyft's director of communications, was more direct.

"Lyft is new and not accounted for in the existing frameworks for taxis and hired vehicles," Simpson said. "Ordinances for taxis do not cover Lyft. Lyft does not violate any existing city law. Lyft reviews city and state regulations before we launch in any market. Lyft is not a taxi."

Though conversations between Lyft and Minneapolis officials have taken place, nothing has been resolved and Lyft is not authorized to operate, said Grant Wilson, manager of the city's Department of Licenses and Consumer Services.

"I'm surprised to see that they would launch," Wilson said. "City ordinances prohibit this ... and we will be having enforcement action."

That, Wilson said, will involve licensing-enforcement officials who will use the Lyft smartphone app to summon rides, take the ride and pay for it -- and then have the driver-owned vehicles ticketed and towed.

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Insurance is a serious issue, Wilson said. Lyft drivers' personal insurance is null and void if the car is being used commercially, he said. Without the required city insurance, he said, driver and passengers are taking a serious risk.

"Safety is indeed the primary concern," said Lyft's Simpson. "Our safety measures go above and beyond what the city requires for the taxis it regulates."

Lyft said it has a system of driver-background checks, vehicle inspections and driver monitoring -- the latter largely via ratings that customers punch into the app after their rides. It also said it covers each vehicle and driver with $1 million in commercial liability insurance.

This makes the service safer and and more reliable than traditional taxi companies, co-founder John Zimmer said last year. It is "100-percent legal," he said.

Wilson said he has been told that Lyft provides insurance, but that he has yet to see any proof.

These contentious transportation issues have played out across the country as Lyft and UberX have clashed with cities and taxi companies. UberX was not available for comment.

Lyft operates in 22 U.S. metropolitan areas. UberX, which also relies on driver-owned vehicles, is one of several summon-a-ride services run by San Francisco-based Uber in 29 countries.

Lyft, UberX and other such services rely on Google Android and Apple iOS apps that customers use to summon cars. Taxi companies, which fiercely oppose this new competition, have nevertheless imitated those services with call-a-cab apps of their own.

St. Paul has been more lenient with the likes of Lyft, arguing that nothing in city ordinances keep the drivers from operating within city limits.

"The mayor supports businesses that are new and innovative and cater to a tech-savvy, younger crowd," said Robert Humphrey, spokesman for St. Paul'sDepartment of Safety and Inspections.

Nevertheless, Humphrey said, the city has been in discussions with the Metropolitan Airports Commission and other agencies that oversee transportation to "look into possible new regulations."

Minneapolis is also involved in these discussions, Wilson said. It's unlikely anything would be resolved before June at the earliest, he added.

Lyft's spokeswoman Thelen said, "We look forward to working with the city of Minneapolis ... to create new rules that protect both public safety and consumer choice."

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(c)2014 the Pioneer Press (St. Paul, Minn.)

Visit the Pioneer Press (St. Paul, Minn.) at www.twincities.com

Distributed by MCT Information Services

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