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After service challenged in court, Lyft says it's starting New York City service

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ALBANY, N.Y. - The on-demand ride-sharing app Lyft planned to start limited service in New York City on Friday night after reaching agreement with officials to resolve regulatory issues that prompted a lawsuit by the state.

New York's attorney general and Department of Financial Services said Lyft agreed to operate "in full compliance" with existing laws and regulations, and that it will start the new service with commercial drivers only.

"Tonight, after making positive progress with local and state leaders, Lyft will launch in all five boroughs of New York City," company spokeswoman Katie Dally said. "We've finalized an agreement to offer immediate access to our friendly, affordable rides through a TLC-licensed model beginning at 7 p.m."

Dally said Lyft would expand the limited service in the coming weeks.

The New York City Taxi & Limousine Commission had posted a notice two weeks ago, in advance of the company's initial planned startup in Brooklyn and Queens, that its so-called ride share service at that time had not complied with the commission's safety requirements and other licensing criteria to verify qualifications of its drivers and vehicles.

San Francisco-based Lyft's plan to bring its pink-mustachioed car service to the New York City market was then halted after the state officials sued. They claimed the company operates as a traditional for-hire livery service using mobile technology that is subject to regulations, not a peer-to-peer transportation platform as claimed.

Both sides have been in court-directed negotiations since.

"We are firmly committed to the notion that regulators can work constructively with companies so that new ideas can come to the market — and that smart regulation should create an environment where innovators can compete," Attorney General Eric Schneiderman and Department of Financial Services Superintendent Ben Lawsky said in a joint statement. "We will continue to work with Lyft so that any future business it undertakes meets that standard and protects consumer safety."

The taxi commission did not immediately comment on the agreement.

The officials and company also said it will suspend operations in Buffalo and Rochester Aug. 1 while resolving regulatory issues there.

Dally said that Lyft will work with authorities "to align New York State's insurance laws and regulations with emerging technologies of the 21st century."

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