Lyft, known for its pink mustaches, has again been caught red-handed in Houston breaking a basic driving law.
A driver for the company, which pairs riders with drivers via smartphone app, picked up a Houston investigator Monday and was cited for operating an illegal taxi service because the passenger was charged for the ride. The vehicle used for the trip also had an expired Texas registration sticker, officials said Wednesday.
Two weeks ago, Lyft gave a passenger a ride to Katy, automatically triggering a charge to the rider’s credit card because the fare exceeded the $25 credit Lyft was giving all customers.
In both cases, the drivers were cited for operating without a taxi permit, providing a fee-based ride and operating an illegal taxi company. All three are misdemeanor charges. Separately, Lyft faces citations in both incidents for operating a taxi dispatch business without a permit.
The infractions that triggered the citations undermine the case that changing the city’s rules is in the best interest of Houston riders, Newport said.
See here for all the background. “Newport” is Chris Newport, chief of staff for the city’s regulatory affairs department. I have the press release this story quotes from; it’s reprinted beneath the fold. As I’ve said before, I fully expect that in the end the ordinances will be modified to allow Lyft and Uber and uberX into Houston. The story suggests the Council debate may happen by the end of the month, which is about when we were led to expect it to happen. But I don’t think Uber and Lyft have done themselves any favors – Lyft in particular – with their pre-ordinance update rollouts and their email badgering campaign. Sometimes a lighter touch is the better approach, you know?
UPDATE: I received two statements in my email from Lyft. The first deals with this story:
Safety is our top priority at Lyft, and is why we’ve gone above and beyond to set the industry standard for the most stringent safety requirements for drivers. We regret that this individual was approved to drive with an expired inspection sticker, as he met all the other safety requirements to join the Lyft platform, including current vehicle registration, passing Lyft’s 19-point vehicle inspection and no previous record of unsafe driving. In no way does this isolated error speak to the quality of Lyft’s background check, driving record check and other safety standards, all of which remain more strict than what’s currently required of taxis and limos in Houston.
The second is about insurance options:
Lyft Will Provide Protection Between Rides
Last month, Lyft introduced additional coverages including uninsured/underinsured motorist and collision coverages. We also worked closely with regulators, personal insurance carriers, and other industry leaders to found the Peer-to-Peer Ridesharing Insurance Coalition.
Historically, many personal insurance policies have had an exclusion while drivers are carrying passengers for compensation, because of greater liability created by having additional people in the car. In reviewing this exclusion language from the top insurance carriers, the vast majority of policies’ exclusions focus on the time period during which there is a passenger in the car.
Lyft’s liability policy was designed to cover the time when drivers have passengers in their cars, as well as the period when a driver is on the way to pick up a passenger. While we do expect personal carriers to cover the time period prior to carrying a passenger, in order to erase any uncertainty, Lyft will now provide additional protection. This new protection will provide backstop coverage to drivers when they are in match mode and are not providing rides. We will be rolling this out state-by-state in the days to come.
So there you have it.
City of Houston investigators are warning Houstonians after discovering evidence that contradicts safety inspection promises made by Lyft, a new commercial transportation provider operating unlawfully in Houston.
“We rode in a Lyft vehicle with an expired State of Texas inspection sticker,” said Administration & Regulatory Affairs Department Chief of Staff Chris Newport. “If Lyft missed something as obvious as this, what else is being missed? Unfortunately, we now have to question whether Lyft ever looked at this vehicle and others operating within their systems. We also have to doubt whether Lyft assurances regarding driver background checks are valid. Basic regulations are meant to prevent these situations, while providing for as much choice to Houstonians as possible. We are providing this information so Houstonians can make more informed decisions when choosing which transportation options to use.”
The City has previously created regulations for new entrants to Houston’s transportation industry, such as pedicabs and jitneys. The regulations are designed to provide uniform and independent verification of vehicle and driver safety, which Houston passengers are not in a position to do on their own. An update to these regulations is being formulated, with input from both new and incumbent stakeholders, to accommodate the new service options in the Houston market.
The City of Houston has been taking investigative rides provided by Lyft and Uber since the companies decided several weeks ago to initiate service in Houston in the absence of City approval of basic public safety regulations. Legally, the only way Lyft and Uber may provide service in Houston is at no charge to their passengers. City investigators have taken rides to verify whether customers are being charged illegally and to verify basic safety practices are being followed. Several violations have been identified and citation were issued to Lyft operators.
City investigators will continue to monitor the operations of both Lyft and Uber. Investigations have not revealed illegal operations on the part of Uber.