Seattle says new ridesharing service is illegal

by: David Ham Updated:

They're the cars driving around Seattle with hot pink mustaches picking up people for a new rideshare service called Lyft.

Lyft hires part-time drivers who use their own cars to pick people up in metro Seattle by using an app.

"Lyft is your friend with a car," said Nick Greenfield, of Lyft.

The company launched to the general public last week in Seattle.

According to the company, payment is optional.

"At the end of every trip you'll get a suggested donation so that payment you can increase or you can decrease," said Greenfield.

Still the City of Seattle says this service is operating too much like for-hire cars that are regulated by the city.

"They should be regulated because they do qualify as a for-hire vehicle because money is exchanging hands. To that extent they are required to have a for-hire vehicle license," said Denise Movius, deputy director of Seattle's Regulatory Services and Operations.

The city council is looking into regulating this type of rideshare service.

"This is new territory for most cities; you see these popping up in areas that have denser concentrations of people living and working in these areas," said Seattle City Council President, Sally Clark.

Clark also said the service needs to be regulated for safety reasons.

"I want to make sure we regulate with the right interests in mind, safety. That people aren't getting taken by anybody," said Clark.

But Lyft said each of its drivers goes through a rigorous background check.

"We do DMV checks, we do criminal background checks, you rate your driver at the end of every trip and we also have a million dollar excess liability insurance policy," said Greenfield.

The company said its drivers or passengers have not encountered any criminal incidents in San Francisco or Los Angeles, where Lyft has been operating for months.

Lyft also disputes the claim that it operates like a taxi cab.

"If you don’t want to pay your friend than that's OK, but we see that almost everybody is making that suggested donation," said Greenfield.

But drivers can rate passengers after rides and can choose not to pick them up.

Movius said if any city inspectors see Lyft drivers on the streets they will be ticketed.