Austin is a car town not known for its public transportation, and has had a number of recent incidents that triggered a large grassroots effort to improve transportation safety in the city. As a result, there is widespread support for ridesharing companies like Lyft, which has been lobbying to operate in the Texas capital, including producing a video outlining its case. The problem is that Austin has strict rules that limit for-hire transportation to licensed companies like taxis and car services, which Lyft's peer-to-peer model is not.
Lyft has apparently decided it's tired of waiting for the city council to make necessary changes, and will start operating in Austin today. According to the Austin Business Journal, ridesharing is legal in Austin, but rates are limited to the federally established carpooling rate of 56 cents per mile, while Lyft's suggested reimbursement rate for its drivers is $1.92 per mile plus other fees. Lyft has said it won't charge passengers initially, but if and when it does, it will likely be in violation of the city rules.
Carlton Thomas, the city's acting parking enterprise manager, told the ABJ that "If they bring their operations in town unlicensed as a ground transportation company, they will be operating outside the law." If found in violation, the company could be cited and drivers could have their cars impounded.
Some progress has been made to get the city regulations amended—earlier this month, the city council passed two resolutions asking the city manager to look into the process of changing the rules. But it would be a six-month process, meaning that Lyft's decision to get a foothold in the city now is a gamble. According to Lyft spokeswoman Katie Daly, it's worth the risk to get pink mustaches on the streets.
"The launch now means stakeholders working on the process will get to experience rideshare in action," she said.