Kansas City is working on a settlement with ride-sharing service Lyft

Kansas City’s rift with Lyft has been temporarily halted as the two sides try to work out a solution that will allow the ride-sharing service to operate legally in the city.

Lyft officials confirmed Wednesday that their drivers will temporarily stop driving at noon Friday for up to 60 days while Lyft works with the city to ensure a permanent future for such services in Kansas City.

The agreement, which still awaits a federal judge’s signature, also temporarily halts a federal court lawsuit scheduled to go to trial Dec. 15.

“This is a ray of light where up to now we’ve had storm clouds,” said David Mack, director of public affairs for Lyft, which is based in San Francisco.

Mack said the company realizes the moratorium will have a financial impact on its “hundreds of drivers” in Kansas City, but decided this was the most expeditious way to work with the city on rules acceptable to everyone.

The company sent an email to its drivers alerting them to the pending deal.

“We understand this pause will affect you and the income you count on from Lyft,” the message said. “We considered all options and believe this step is essential to protect drivers and allow Lyft to move forward in Kansas City long-term.”

Lyft came to town in early May and quickly gained buzz as one of a group of companies, also including UberX, that use a smartphone app to link passengers with part-time drivers in their own vehicles. They charge a suggested donation rather than a set fare as they ferry people around town.

Friction developed almost immediately between Lyft and city officials. Regulators said the city had taxi rules that Lyft drivers needed to follow both to keep the public safe and to ensure its drivers and vehicles were properly licensed.

Lyft said it had a different business model than a traditional taxi company and shouldn’t be subject to the same requirements.

Lyft’s local attorney, Pat McInerney, said Lyft didn’t own or operate vehicles although it did make sure the drivers and vehicles were insured and safe. He argued Lyft was more like OpenTable reservations, which matches diners with restaurants.

The dispute wound up in federal court, where the city tried but failed to get a temporary restraining order preventing Lyft from operating this summer. A federal judge allowed the company to keep operating, but scheduled a trial on the broader legal issues. That trial is now on hold.

Lyft spokeswoman Chelsea Wilson said Wednesday the company is confident it can resolve its regulatory issues with Kansas City, as it has in more than 60 other communities nationally where it now operates legally.

Kansas City spokesman Chris Hernandez also cheered the development.

“We as a city think it’s great that Lyft is agreeing to suspend its operations and as part of that they’re also agreeing to come to the table,” he said.

Hernandez said a Lyft competitor, UberX, has just completed the process to get fully licensed and its insurance approved, and its drivers are now getting permits. That shows there also should be a way to accommodate Lyft, he said.

The breakthrough in the dispute occurred after the City Council approved a resolution Oct. 2 directing the city manager and city attorney to engage in a comprehensive process, including community outreach, to ensure a vibrant and competitive taxi industry, including new transportation networking technologies like those used by Lyft and UberX.

The council asked for an analysis within 60 days, including updates every 15 days.

Since Lyft and UberX started service in Kansas City, numerous drivers have received municipal tickets for operating without a city permit. Those tickets are now on hold in Municipal Court, Hernandez said, pending the outcome of the negotiations over the civil litigation.

This story was originally published October 22, 2014 at 3:43 PM with the headline "Kansas City is working on a settlement with ride-sharing service Lyft."