Wed May 14, 2014
Cab Or Car? It's Up To St. Louis Courts If Lyft Can Stay
Lyft, a ridesharing app that connects passengers to drivers, is in a legal battle for its existence in St. Louis.
The Metropolitian Taxicab Commission is asking a judge to issue an injunction to prevent Lyft from operating in the city. Lyft started its operations in late April. But after the commission won a temporary restraining order against Lyft, the company had to stop services.
Ronald Klein, executive director of the MTC, testified Wednesday. He said even though Lyft uses pink mustaches instead of taxi signs, there's no question: "No matter what color you paint it, it's still a taxi movement."
Klein was on the witness stand for nearly two hours, which he said felt like days. He testified, was cross-examined and was then asked more questions on re-direct. The questions centered on whether the taxicab commission has the authority and jurisdiction to regulate Lyft.
The defense pointed to specific language in the MTC statute that gives the commission its powers. The defense argued that Lyft cars don't fit that statute. It's not an airport taxi; it doesn't have a taximeter; and it doesn't ask a fixed-fee for its service. Klein fought back, saying that it was clearly a vehicle for hire.
The regulators also called Ray Mundy, a professor of transportation and logistics from the University of Missouri-St. Louis. Mundy has studied taxi regulations in cities all across the country, and he explained that services like Lyft tend to hurt drivers. He said customers might not realize that Lyft drivers don't face the same insurance requirements, background checks or car safety regulations that regular taxicabs do. Mundy also said that based on his research, he was biased towards the taxicab companies.
The testimony of Klein, Mundy, and Robert Thomure took the entire day. The defendant, Lyft, won't mount its defense and call witnesses until the hearing reconvenes on Monday.
One of those witnesses will be Joseph Okpaku, Lyft's government regulations manager. Okpaku said the MTC is biased because cab company owners sit on the commission. He added, "It is a self-regulating organization that, in my opinion, is trying to protect its own monopoly over the market."
Okpaku said in most markets Lyft has entered, the company has been able to come to a mutually agreed upon resolution on where it fits in to existing regulations. But he says, MTC's move – getting a temporary restraining order – is extreme.
"This is the first time this has happened in our nearly two-year existence," Okpaku said.
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