Lyft Defies City Rules To Launch In Austin

Party-loving, traffic-hating citizens of Austin want ridesharing services, but Lyft has been banned from operating by strict city rules. Starting now, they're hitching pink mustaches to cars in the Texas capital anyway.

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.

[Image: Flickr user Alfredo Mendez]

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  • Liz Miller is an awesome website that explains what Lyft is all about. The site has videos and referral links to $25 of FREE driving credit. As a longtime passenger, driver, and mentor, I absolutely love Lyft, the community, and the experience. For free, you should definitely give it a try :)!

  • Alex Cherry

    Austin City Council made ride-sharing illegal to protect taxi companies. The question to be asked is why we're protecting cabs.

    If they can't compete with Uber and Lyft without special privileges or legislation aimed specifically at crippling their competitors, then they deserve to go out of business. Let the best business win.

  • Daniel Jackson

    The question is, why don't more people recognize a great deal of regulation is passed in the interests of entrenched incumbents by legitimizing their actions and erecting regulatory, economic and legal barriers to entry. There is a "1%" out there: those who benefit from governmental protection and interference in what is otherwise a free market.

  • Rob Price

    This is BS. I'm all for pushing the city council for being slow to adapt so I guess the answer now is no until it's yes. Our traffic problems though are no worse than anywhere else. We don't have anywhere near Atlanta or Houston's sprawl and traffic in the bay area is far worse. I'm all for more mass transit options in Austin but Car2Go is here and awesome, rail is catching on and ridership is up. The busses are still not frequent enough to be helpful but there are good options.

  • Kevin Koskella

    This is ridiculously awesome. Massive props to Lyft for this kind of boldness! Governments will be left behind in this new age.