Santa Fe Judge Won't Shut Down Lyft

by | December 12, 2014

By Milan Simonich

Chief First District Judge Raymond Ortiz of Santa Fe declined Thursday to enforce the state Public Regulation Commission's cease-and-desist order against upstart transportation company Lyft Inc.

Ortiz said the five-member Public Regulation Commission still had not decided whether it claims jurisdiction over Lyft and a similar company called Uber. The so-called ride-share companies use smartphone technology to line up passengers for their contracted drivers, who use personal vehicles for the service. Unlike the traditional cab companies they compete with, the ride-share companies are unregulated in most areas where they operate, although many state and local governments are working to change that or to shut down the companies.

With the New Mexico Public Relation Commission's lines of authority over the operations still unresolved, Ortiz said, he had no jurisdiction to shut down Lyft.

The Public Regulation Commission's staff attorney, Michael C. Smith, had encouraged the judge to enforce the 6-month-old order telling Lyft to cease operations in New Mexico.

Smith said this case was similar to a judge issuing a temporary restraining order against a person accused of harassing someone, even as more information is sought about the allegation.

Lyft threatens public safety because it has not established that it has proper insurance coverage and thorough background checks of drivers it deploys, Smith said.

Lyft, Smith said, is flouting New Mexico law by carrying passengers without authorization from the Public Regulation Commission.

Nann Winter, the lawyer for Lyft, argued that Ortiz did not have jurisdiction in the case. She said actions by the Public Regulation Commission are subject to review by the state Supreme Court, not lower courts.

Moreover, she said, the Public Regulation Commission has never issued a full and final order on whether it claims to have authority over Lyft and Uber.

Members of the Public Regulation Commission have been divided over whether Lyft and Uber should be able to operate in New Mexico without government supervision.

Commissioners Patrick Lyons, R-Clovis, Karen Montoya, D-Albuquerque, and Theresa Becenti-Aguilar, a Democrat from the Navajo Nation, have been open to the newcomers being able to operate in the state.

Lyons said in a recent interview that it is almost impossible for a new taxi company to crack an essentially closed marketplace in New Mexico. As a state senator in the 1990s, Lyons said, he watched one entrepreneur pour money into what was a futile effort to start a taxi business. That case left an impression on him because it raised questions about competition being stifled, Lyons said.

The other two commissioners, Valerie Espinoza, D-Santa Fe, and Ben Hall, R-Ruidoso, have said Lyft and Uber should be made to comply with the insurance requirements and background checks that taxi companies must follow. Espinoza said the commission has shut down illegal tow truck operations but has done little to get tough with Lyft and Uber.

Regardless of how these new companies line up customers, they are still transporting passengers, just as taxis do, Espinoza said.

Taxi companies have been pushing the commission to assert its regulatory authority and rule that Lyft and Uber cannot operate without state certification. Raymond Sanchez, a former speaker of the New Mexico House of Representatives, is lobbying for the taxi industry. He attended the hearing before Ortiz, and he has argued to the commission that the new companies are operating unlawfully.

(c)2014 The Santa Fe New Mexican