Lyft has emerged as a major player in the app-based ridesharing market in the U.S. They control more than one-third of the market and are expanding rapidly. However, it has been subject to fair amount of criticism and challenges for meeting regulatory compliance. The major challenges being faced by Lyft in the U.S. market are discussed below.
Rideshare operators like Lyft have been blamed for not having stringent measures in place for screening of driver’s criminal check and background. They maintain that fingerprinting of drivers for criminal background check will impact their on-boarding process. However, industry experts maintain that Lyft may have to move towards fingerprinting as it will help them in the long run to identify the best possible drivers.
Compliance to Local Regulations
The conventional taxi industry has been criticizing the rideshare operators like Lyft for a long time about them not complying with the local regulations like other taxi operators have to. According to them, this creates an uneven playing field. The local taxi operators have also filed lawsuit against rideshare operators in some states due to this uneven playing field. They maintain that the taxi drivers need to have commercial driving license and have their vehicles regularly inspected, while rideshare drivers only have to meet age requirements, have a working car, and a regular license.
Lyft does not provide wheelchair friendly services and lawsuit has been filed against it in violation of the American with Disabilities Act (ADA). The ADA states that taxi operators cannot discriminate against the disabled population and they need to provide wheelchair friendly services. Lyft drivers can even deny service to the disabled on their discretion and they are not provided any training on servicing the disabled and meeting their needs. It needs to address this issue at the earliest to eliminate such challenges to its business in the future.
Ambiguity on Insurance
There is also ambiguity over the insurance cover for drivers of rideshare operators like Lyft and Uber. Lyft mentions that they provide $1 million insurance liability plans for their drivers. However, there have been conflicting views on it. Lyft and Uber officials maintain that the drivers are not their employees and work as independent contractors. Working as independent contractors, the drivers are responsible for any injury or harm caused to the riders while transit and not the rideshare operator. There have been lawsuits on the same and Lyft may face further problems if the ambiguity is not resolved.
Potential Airport Bans
The rideshare operators like Lyft and Uber are facing major challenges with the airport authorities. Major airports in the U.S. like Houston, San Francisco, and Chicago are planning to even ban these rideshare operators. Airport shuttles and other cab companies have to pay an annual permit fee and also pay a per-trip fee. To comply with these regulations, Lyft drivers will have to shell out nearly $325 for the annual permit and also pay $2 per trip. This may lead to reduction of business for Lyft from the airport pickups and drops from the current levels.