Lyft

The new ride-sharing service Lyft recently launched in Ann Arbor, days after Uber, a similar ridesharing program launched. City officials have issued cease and desist letters to each company, saying they don't operate within the confines of the law.

(Courtesy of Lyft)

It didn't take long for Ann Arbor city officials to call for an end to the newly launched rideshare services Uber and Lyft.

On May 14, just three weeks after the companies launched locally, Ann Arbor City Attorney Kristen Larcom sent cease and desist letters demanding that the companies immediately put an end to their Ann Arbor operations.

"It has been reported and has been observed that ... (Lyft and Uber) are aiding and abetting the unlawful operation of (Lyft and Uber) vehicles for hire in the city of Ann Arbor," the letter stated.

"The city demands that (Uber and Lyft) comply with the Michigan Limousine Transportation Act by ceasing and desisting from soliciting persons to sign up ... to operate in the city without requiring them to and ensuring that they comply with the act. It is incumbent upon (Uber and Lyft) also to inform persons who seek to operate their vehicles as (Uber and Lyft) vehicles that they must comply with the act and any other federal, state or local laws. All persons and entities involved are advised to consult with their attorneys."

In an April 22 meeting following the launch of the app-driven, on-demand transportation systems Uber and Lyft – which connect users with a driver through the use of a mobile device – the Ann Arbor Taxi board discussed the potential for requiring the companies' drivers to register with the city as taxis.

As it stands, only licensed taxicab drivers – not drivers with companies designated as limousine services or other drivers-for-hire services – have to register their drivers with the city.

Stephen Kunselman, City Council's representative on the Ann Arbor Taxi Board, said the registration of the drivers is more of a safety issue than anything else.

"The No. 1 issue of regulating drivers in the industry is for public safety, all right? I want to know who these drivers are who are driving around picking up people in our town, OK? No. 1 issue," he said.

Lyft spokeswoman Paige Thelen said that the company has taken a number of steps to ensure safe and effective business practices, and that it will continue to operate despite the order to shut down its services. She said the company would try to work with the officials, but that it believes that it is operating lawfully as it stands.

"From the beginning, we carefully designed the Lyft platform to provide passengers with a safe and affordable transportation option. We have gone above and beyond existing transportation requirements by implementing an extensive screening process, strict background and driving record checks, and a first-of-its kind $1 million excess liability insurance policy – along with additional coverages – to give both drivers and passengers peace of mind," Thelen told The Ann Arbor News.

"We take the cease-and-desist letter as an opportunity to open a conversation with Ann Arbor leaders and we look forward to working together toward a permanent solution that focuses on public safety and allows ridesharing to thrive."

Uber Ann Arbor and Detroit general manager Michael White also said that his company would continue its services as it works toward reaching an operating agreement with the city.

He said that the company's reception by Ann Arbor residents shows that there is a desire and need for alternate transportation services in the area.

"We're a little disappointed that Ann Arbor is choosing to ignore the will of the residents who are welcoming us as a different transportation option," White said. "We expect to have a great conversation with the (officials)" in order to reach an operating agreement.

He added: "We're going to continue to (provide this service) and meet the needs and demands of the local consumer base."

Both Uber and Lyft recently reached two-year operating agreements to continue their services in the city of Detroit after officials there also issued cease and desist orders.

Still, Larcom said that Ann Arbor officials will enact measures to "get them to comply with the law," and that she "has no reason to expect they won't (comply)."

"City of Ann Arbor police officers are authorized to and will enforce the act. Persons who violate laws applicable to limousines, which includes (Uber and Lyft) vehicles, should be aware that they are subject to fines of up to $500," the order said.

"Likewise, persons or entities who require or permit a person to drive or operate a limousine in violation of the Act should know that they are subject to a fine of up to $500 and/or up to 90 days in jail."

Thelen said that if Lyft drivers are cited for being in violation of the city's cease and desist order, the company would pay fines and all legal costs for the drivers.