Lyft to bring ridesharing to Austin, despite unchanged city regulations

May 29, 2014
Austin Business Journal

Lyft Inc., a San Francisco transportation networking company, said it will begin operating its peer-to-peer ridesharing service in Austin Thursday, but will almost certainly run up against city rules strictly limiting for-hire transportation to licensed companies


According to an event invitation posted by Lyft officials to Eventbrite, Lyft service will begin in the Austin area Thursday at 7 p.m. On Friday, the company will be holding a launch party from 6 to 9 p.m. at Bungalow on Rainey Street


The move is likely to spark further debate about whether and how Austin should allow transportation networking companies into its for-hire vehicle market. Just this month, Austin City Council took the first step toward allowing the companies to operate when it passed two resolutions asking the city manager to look into how the changes could be handled


Lyft has aggressively pushed for Austin's rules to be changed in the past, and was a major player in the recently passed City Council resolution. The company hired some of Austin's top lobbyists to lead its push and included a video outlining its support in Austin along with the service announcement


However, while the move by ridesharing companies to move into Austin has found widespread support among citizens, the move to reform Austin's rules is still in the beginning stages of a six-month process. If the company does begin operations, it appears almost certain to run up against existing city rules


Austin's code does allow for ridesharing companies, but limits payment to drivers to the federally established carpooling rate of 56 cents per mile. Lyft operates on a donation-based model, but the suggested reimbursement rate for its drivers is well over Austin's rideshare threshold at $1.92 per mile plus other fees


The company has indicated it will not charge passengers for rides initially. However, the city's rules would still mean the company is in violation if the drivers are paid at more than 56 cents per mile


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