Lyft
9:45 pm
Mon May 19, 2014

Lt. Gov. Kinder Testifies On Behalf Of Lyft: 'It's a Car'

Missouri's Lt. Gov. Peter Kinder, weighed in on a St. Louis matter Monday. He took the stand on behalf of Lyft in a court hearing over whether or not the ride sharing app should be considered a car or a taxicab. In his testimony, Kinder explained how he tried to book a Lyft car a few weeks ago, only to learn, to his dismay, that St. Louis's taxi commission was blocking the startup. 

It was the second day of the hearing. On Friday, the Metropolitan Taxicab Commission laid out its case for all the ways in which Lyft is a taxicab service, or a "vehicle for hire." The MTC is seeking a preliminary injunction against Lyft. Monday was Lyft's turn to make its case and Kinder was one of the star witnesses.

Credit Courtesy of Lyft

In his testimony, the lieutenant governor dropped a Star Wars reference. Kinder likened the taxicab commission's swift actions against Lyft to "the Empire strikes back." He detailed the many ways the commission attacked.

"The citations issued, the immediate resort to court, and the immediate acquisition of something that has not happened in any other city — and that is a judge slapping [Lyft] with a temporary restraining order," Kinder said

During cross examination, the taxicab commission's lawyer asked Kinder about Lyft's safety requirements and insurance. The attorney asked question after question about how Lyft's standards for car insurance, driver training, background checks and car inspections compare to the taxi commission's standards. Kinder responded that he did not know the specifics. 

Instead, Kinder argued on a macro level. He looked at the matter from a business innovation perspective. He said the taxi commission used "certificates of need" to block new companies like Lyft from entering the market. He said the commission was protecting entrenched interests — owners of taxicab companies sit on the commission. Kinder went even further on the stand, calling certificates of need a "joke." He explained:

Before you can open a lemonade stand when you're 10 years old, you've got to go to government and get an approved certificate that there's a need for a lemonade stand in your neighborhood. Should we have certificates of need that deny people in a free country like ours the opportunity to earn a living? It's absurd.

Kinder called professional licenses — for beauty parlors, shoeshine shops or taxi companies — barriers to entry. He explained that license requirements are often put in place by incumbent businesses in an effort to protect themselves from competition. Kinder added that the license requirements prevent new innovative companies from entering the market. 

Lyft representative Joseph Okpaku also testified today. He presented evidence that Lyft cars and drivers are safe and that the company provides additional and adequate car insurance. He also argued that Lyft is losing out on about $30,000 in revenue each week it's not allowed to operate. Okpaku argued that St. Louis was losing out on valuable income because 80 percent of that revenue goes to the drivers.  He also claimed that Lyft creates jobs. Okpaku, however, did not explain the net effect of Lyft's presence — if the company entering a market steals jobs and revenue from other industries. The hearing continues Tuesday.