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Columbus, Ohio, Sues to Halt App-Based Car Service Lyft

The suit filed in Franklin County Municipal Court asks a judge to halt Lyft’s operations, and the city is seeking a temporary restraining order.

by Rick Rouan, McClatchy News Service / April 24, 2014

The city filed a lawsuit yesterday to try to stop the app-based car service Lyft from operating in Columbus, as arguments wrapped up in a similar case against UberX.

The suit filed in Franklin County Municipal Court asks a judge to halt Lyft’s operations, and the city is seeking a temporary restraining order that would stall the company while the request for a permanent injunction is argued in court.

UberX and Lyft use smartphone apps to link people who need rides with drivers, who use their personal vehicles to provide transportation.

The app is used to track the ride, calculate the fare and charge the customer’s credit card or another digital account. The company keeps a share of the fare and passes the rest to the driver.

Lyft spokeswoman Paige Thelen wrote in an email that the San Francisco-based company intends to fight the suit and is “actively working with city leaders” to develop regulations that would cover Lyft.

A similar suit was filed against UberX on April 8. Attorneys for the city and UberX, which also started in San Francisco, finished testimony and arguments yesterday about the city’s request for a temporary restraining order.

Franklin County Environmental Court Judge Daniel R. Hawkins said a decision could come in the next week.

City officials have argued that public safety is at risk because the city cannot confirm whether the company has adequate insurance and drivers are not subject to city background checks or vehicle inspections.

But James Ondrey, general manager for UberX Ohio, testified that the company is doing those things on its own, and he said its insurance coverage exceeds what taxi companies and liveries carry.

The court is considering the two lawsuits as the city finalizes new rules that would regulate the companies.

Similar fights have erupted in other cities. UberX and Lyft say they are technology companies, not transportation providers, and don’t fall under existing regulations.

A federal judge in Houston ruled against issuing a temporary restraining order that taxi companies there were pursuing, according to the Houston Chronicle.

Columbus license officer Glenn Rutter said the city received complaints that the companies are operating illegally, but UberX’s attorney, Douglas Cole, said those complaints came from taxi companies worried about more competition.

“Taxi drivers are mad, and the city is helping taxi drivers defend their turf,” Cole said.

Cole said a restraining order would be a “permanent, government-created competitive advantage” for UberX competitors, including Lyft.

“Uber does not have a right to violate the law,” said Westley Phillips, assistant city attorney in Columbus.

Last week, Ohio Lt. Gov. Mary Taylor issued a consumer alert that warned of potential insurance gaps among app-based car services.

Ondrey said UberX provides four levels of insurance, including coverage when drivers aren’t carrying passengers and a $1 million liability policy that starts “from the first dollar” if the driver’s personal auto policy won’t pay.

But the policy would not cover an at-fault driver’s medical payments, Ondrey said.

“We understand what they tell us (about) how the insurance works, but we haven’t physically seen it,” said Amanda Ford, spokeswoman for the Columbus Department of Public Safety.

©2014 The Columbus Dispatch (Columbus, Ohio)

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