Lyft will suspend its ridesharing service in Buffalo and Rochester by Aug. 1 under an agreement reached with state regulators.
The agreement requires the ridesharing service to come into compliance with all state laws and regulations before it can start again.
The agreement, however, allows Lyft to launch its service in New York City with commercially licensed drivers and a regulated fare schedule, in a process that involves that city’s Taxi and Limousine Commission. Lyft drivers in Buffalo and Rochester are not commercially licensed.
“As part of our agreement to move forward in New York City, Lyft will pause operations in Buffalo and Rochester by August 1st, while we work with the Attorney General’s Office and Department of Financial Services to align New York State’s insurance laws and regulations with emerging technologies of the 21st century,” Lyft officials said in a statement.
The company notified its drivers and riders of the change in a letter Friday.
City officials in Buffalo are working with Lyft to come to an agreement about how the company will be allowed to operate.
The state Department of Financial Services had banned the company from operating in the state. When Lyft refused to comply, the State Attorney General’s Office filed a lawsuit.
While state regulators had accused the company of acting in bad faith and hiding crucial information about its plans for a launch in New York City, state officials softened their language in a statement issued Friday, saying they were “pleased” they could reach an agreement with Lyft.
“We look forward to exploring solutions that enable companies in the sharing economy to operate and thrive throughout New York State,” said Financial Services Superintendent Benjamin M. Lawsky and Attorney General Eric T. Schneiderman.
The ridesharing service allows drivers to use their own vehicles to transport customers for a “donation.” Users request rides using a smartphone application, and drivers are matched based on proximity, using the phones’ GPS capability.
The taxi industry has complained that Lyft drivers are not subject to the same insurance and regulatory laws that apply to taxi drivers.