August 8, 2014

Lyft finds itself in legal limbo, though its drivers continue to pick up riders

The future of ride-sharing company Lyft currently rests in a sort of legal limbo in Kansas City. But Lyft drivers continue to pick up riders until the issue is resolved in court next month.

Keith Curington pulls up to the curb, his black Lincoln idling out in front of the Sprint Center.

Thirty minutes earlier, the 47-year-old Kansas Citian had been at home, paying bills in his River Market home. Now, thanks to the mobile capabilities of Lyft, he has made his way to the Power & Light District, welcoming a waiting stranger into the passenger seat for a lift across town.

A big, easygoing man, Curington teaches music at Park Hill High School. He joined Lyft as a driver about two months ago as a way to make some extra money during summer break, and as he weaves his way through downtown, he explains that the job has proved even more lucrative than he had hoped.

“It’s paid for some vacations,” he says.

At the moment, though, Curington’s long-term driving job — and the status of the company that employs him — rests in a sort of legal limbo in Kansas City.

A federal judge ruled last month against the city’s effort to place a temporary restraining order on the mobile ride-sharing company. But the city also has indicated that it will continue to enforce the law, which it believes Lyft is violating. A courtroom showdown is scheduled for Sept. 17.

Lyft drivers who The Star rode with this week weren’t preoccupied with the company’s ongoing negotiations with the city.

But the local situation serves as a kind of microcosm of the nationwide dilemma that Lyft presents, as cities across the country attempt to figure out what, exactly, to make of its emerging business model.

So far, the answers they’ve come up with have spanned the board.

In New York City, officials last month welcomed Lyft, with the caveat that its drivers must be licensed by the Taxi & Limousine Commission and be subject to a variety of regulations, including regular drug tests and vehicle inspections. Cities like Seattle, Houston and Milwaukee also have paved the way for Lyft’s arrival, while Memphis, Tenn.; Jacksonville, Fla.; and the states of Pennsylvania and New Mexico have taken steps to prevent the company from operating.

Even within the same state, officials can’t seem to reach any real agreement: As part of its agreement to begin service in New York City, Lyft also said it would be suspending service in both Buffalo and Rochester effective Aug. 1.

And in Missouri, just down Interstate 70 from Kansas City, a St. Louis judge ruled that the company couldn’t operate in the city until a hearing scheduled for Aug. 25 to determine whether to enact a permanent ban.

At the heart of the conversation is determining what Lyft is.

In Kansas City, officials are holding tight to their view that if Lyft can meet a handful of regulations — among them, that drivers are properly insured, that they undergo background checks and that they possess a valid driver’s license — the city would welcome its mustachioed fleet with open arms.

“We will be happy to welcome Lyft to the marketplace as long as they follow a few simple rules about getting licenses and permits to help protect public safety,” said city spokesman Chris Hernandez.

Another ride-sharing service, Uber, has worked with the city since its arrival, Hernandez said.

Lyft, which currently has tens of thousands of drivers in more than 65 U.S. cities, has long argued that it is merely a “ride-sharing” service not subject to the same regulations as more traditional operations. Its drivers are not professional drivers, the company insists, but people using their own personal vehicles to ferry individuals around town in their free time.

“Any regulations have to recognize that difference,” Lyft spokeswoman Chelsea Wilson said, explaining that all Lyft drivers are already subject to a background check and also are provided with $1 million commercial liability insurance while toting passengers. “There are ways to craft regulations that prioritize public safety and consumer choice while still allowing innovate industries like ride-share to operate.”

Bill George, president of the Kansas City Transportation Group, has disagreed ever since Lyft’s arrival in Kansas City. He takes exception to the company’s assertion that its services differ in any significant way from those provided by the city’s taxi or limo companies, some of which also offer smartphone applications.

The term “ride-sharing,” George says, is disingenuous — “Ride-sharing is two people carpooling together” — and he likens the Lyft situation to a construction company strolling into town and refusing to obtain building permits.

“It’s very simple: The rules either apply to all of us or apply to none of us,” George said. “And it’s disingenuous for Lyft to say they’re doing anything other than (what we’re doing). They’re providing transportation for hire, and the city either needs to say, ‘Comply with the rules,’ or do away with the rules.

“We’re fine either way,” he added.

None of the legal posturing, however, appears to be slowing Lyft’s fleet.

Although city officials insist that they’re continuing their enforcement efforts, Lyft drivers appear, at the moment, to be operating with virtual impunity. Of the 18 total citations handed out by the city to Lyft drivers, none has come since June 21. And of the four Lyft drivers who spoke with The Star recently, none had received a citation or experienced any issues while picking up or depositing passengers.

“I pull right up next to cabs and cops,” said Curington, asked whether he’s had any legal hassles as a driver, “and they can obviously see what I’m doing.”

Proponents of Lyft and similar services — and there are plenty of them — tout them as easier and more accessible alternatives to traditional ride services.

For one thing, the Lyft process is carried out almost solely through a smartphone application. Upon requesting a ride from Lyft, customers see both a picture of the driver and his or her car — along with an up-to-the-minute alert as to when the driver will be arriving. Cash payments aren’t accepted, so in addition to a smartphone, customers must also have an active bank account.

Unlike traditional taxi services, Lyft offers a suggested donation based on the distance of the ride, which customers can then alter depending on their ride experience. In test rides taken by a pair of Star reporters, the cost difference between Lyft and a local taxi company didn’t differ significantly.

At the end of a ride, customers can also rate their drivers, who can be disciplined if their approval rate drops below a certain point.

“Every person I pick up is usually so thrilled that Lyft and Uber are here,” said one driver who works for both Lyft and Uber. “People from LA and New York, students, business people flying in — they’re excited to have arrived to find out they can use their Lyft and Uber accounts in Kansas City.”

Steering north through the city on a recent weekday afternoon, Vince Weston detailed how his red Volkswagon had become his de facto office.

He’d previously worked as a car salesman but recently decided to give Lyft and Uber a try full-time. He appreciates the flexibility of the hours, the people he meets. He has followed Lyft’s legal progress and was surprised when the judge in effect gave the company permission to continue operating on a temporary basis, but he hasn’t experienced any backlash from traditional taxi drivers.

“Most of them are pretty cordial,” he said.

Another driver, who asked not to be identified because he wasn’t speaking for the company, said he didn’t view services like Lyft and Uber as competition to local taxi services.

“It’s a whole different set of clientele that want to use Lyft and Uber,” he said, citing students, young professionals and businessmen as Lyft’s primary customer base.

“The good thing is, as a driver, you’re never forced to do anything you don’t feel comfortable with,” said another driver, who also works for both companies and asked not to be identified. “If I pulled up and didn’t like the vibe I was getting from the person I’m supposed to pick up, I don’t have to. It’s up to the driver.”

Despite its current stance — while several drivers under the Uber banner have applied for city permits, Hernandez said, none from Lyft had taken that step — Wilson said Lyft is confident it can come to some kind of agreement with Kansas City officials.

“There are some cities and states across the country that have recognized that there is a growing demand for ride-sharing and have worked to modernize their regulations to allow a community-powered model to thrive,” Wilson said.

Ultimately, though, the company’s future in Kansas City likely won’t be decided until a mid-September court hearing.

In the meantime, drivers like Curington will keep operating in the murky territory in which Lyft currently exists, showing up on street corners throughout the metro just as long as their smartphones keep blinking with the requests of waiting passengers.

“I figure the lawyers will do what they do,” Curington said.

To reach Dugan Arnett, call 816-234-4039 or send email to darnett@kcstar.com.

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