Ridesharing Rides Into Austin

May 29, 2014 by Kate Harrington

Earlier this month, Austin city council members voted to look into making changes that would allow ridesharing companies to operate legally in the city. But one ridesharing company, Lyft Inc., isn’t waiting for the outcome. On May 28, Lyft announced that it will start operating its service this Thursday at 7:00 pm. A Friday launch party is planned to take place at Bungalow on Rainey Street.

It’s uncertain whether or not the city will allow Lyft to move forward. Lyft has said it will not charge for rides, and will instead pay drivers out of the company’s money. But city officials have said that Lyft’s services will still be considered illegal if the company pays its drivers any more than the Internal Revenue Service’s reimbursement rate of 56 cents per mile. According to an article in the Austin Business Journal, Lyft suggests a driver reimbursement rate of $1.92 per mile.

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Lyft will launch in Austin this week. Photo: Raido Kaldma (cc)

Lyft is one of several app-based ridesharing services that have grown nationwide in the last few years, along with popular companies like Sidecar and Uber. The particulars of each app vary, but the services essentially allow the person seeking a ride connect with a driver who is paid through the app. The company then gets a percentage of the payment.

As traffic congestion and a dearth of late-night transit options increasingly worry residents and city officials, there’s been a push to make it legal for ridesharing companies to operate in the city. In 2013, Sidecar made an attempt to set up service in Austin, but the city quickly shut it down.

Taxicab companies have pushed back against ridesharing services, arguing that they are unsafe and unregulated, concerns the city will examine during its six-month study of the rules affecting rideshare services.

Would you use ridesharing to get around? Let us know what you think!

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Written by Kate Harrington

Kate is a former reporter, most recently for the Austin Business Journal, where she covered real estate, economic development and transportation. Since 2010 she has been running Thumbtack Communications. Thumbtack provides writing, editing and marketing services. Before moving to Austin in 2002 Kate lived in her native New England, which she still visits often to escape the Texas heat.