The San Francisco-based company is even offering free rides to all new passengers for two weeks in New York City. The company has decided to target boroughs outside Manhattan, namely Brooklyn and Queens.
"Brooklyn and Queens are vastly underserved by public transit options compared to the rest of New York City," Lyft communicated in a blog post. "In fact, just one of New York's 23 subway lines passes solely between boroughs, and 95 percent of taxi pickups happen in Manhattan or a local airport."
"Those are the areas that are most underserved by public transportation," John Zimmer, Lyft's chief executive, said in an interview. "There's a huge need to unlock the city for people who want to access it at a lower price point."
Lyft has so far not received the official go-ahead from New York's Taxi and Limousine Commission. Lyft drivers will not be licensed with the commission and risk being hit with fines and having their cars seized for operating as illegal cab drivers.
"We're still hopeful that Lyft will accept our offer to help them do the right thing for New York City passengers as they should, but New Yorkers can rest assured that the T.L.C. will do its job and take the actions necessary to protect them," said Meera Joshi, chief executive of the commission.
Both Uber and Lyft have had to deal with regulators in different cities who are attempting to determine if their service is legal or not. Lyft, for example, does not actually employ its drivers, just assists them with finding drives in exchange for a portion of the revenues.
"The current rules at the city and state levels don't apply to our current model," said Zimmer, whose legal team is already in touch with New York regulators. "When New York created these codes, they couldn't have possibly predicted where we would be today."
The New York City expansion comes after the ride-share company expanded its services to 24 new markets in April. The expansion means the company now operates in 60 cities across the United States, more than rival Uber.
In a possible reaction to Lyft's launch in New York City, Uber dropped prices for its cheaper UberX service by 20 percent in the city and said it would not apply surge pricing in the event of an emergency.