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Update on rideshare battle in St. Louis: Court issues preliminary injunction against Lyft

I previously wrote about the legal battle in St. Louis brought by Metropolitan Taxicab Commission (“MTC”) against the rideshare app company Lyft in the Circuit Court of the City of St. Louis, Missouri, Case No. 1422-CC0089-01. My comment can be found here.

As I discussed, the court entered a temporary restraining order prohibiting Lyft from operating in St. Louis and St. Louis County.  On July 14, 2014, the court again ruled in favor of the MTC, granting a preliminary injunction prohibiting Lyft from operating in the St. Louis area until a final decision is reached on the merits of the case. A copy of the Court’s lengthy Findings of Fact, Conclusions of Law, and Preliminary Injunction can be found here.   

Although a preliminary injunction is just that, preliminary, Lyft has thus far not been successful in convincing the court that its service is sufficiently distinct from that offered by traditional taxis to evade the same licensing and regulatory requirements with which taxis must comply, known in St. Louis as the Vehicle for Hire Code.     

Based on the pleadings filed in the case, Lyft tried to distinguish its services from Taxis in several ways. First and foremost, Lyft argues that its drivers using their personal vehicles do not meet the definition of vehicles for hire under the relevant code because they do not charge fares – rather, they accept donations – and a rider technically doesn’t have to pay.  However, the Court specifically found, based in part on testimony from a Lyft representative, that there is an “expectation of payment.” Moreover, Lyft provides a rider a suggested donation. The Court found that if a rider has not adjusted the donation amount within 24 hours of a ride, the rider is automatically charged the suggested donation amount.   

Although the Court’s decision is not final – it concluded, based on the evidence presented during the hearing on the MTC’s motion for a preliminary injunction, that “vehicles driven by drivers using the Lyft software application fall within the definition of vehicles for hire under the Missouri Revised Statutes and the Vehicle for Hire Code.”  

Although Lyft does not appear to be faring well so far in its legal battle in St. Louis – hopefully St. Louis can follow the lead of several other cities and craft a compromise solution to allow Lyft and other ridesharing companies to peacefully coincide with traditional taxi companies in the St. Louis area. 

Seattle’s City Counsel, for example, recently passed a new ordinance doing just that:  http://bit.ly/1nm3GsG.  Although it largely could be viewed as a victory for rideshare, it does alleviate at least some of the public safety concerns expressed by the traditional taxi companies by imposing new insurance requirements on the rideshare companies and provides some additional benefits to the taxi companies.