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Lyft bypasses city program, to begin rideshare operations today

Thursday, May 29, 2014 by Jenny Blair

In a surprise move, the rideshare company Lyft has announced it will launch Austin operations today. The company is apparently leapfrogging the Austin City Council’s May 15 decision to develop a pilot program for Lyft and other rideshare companies, also known as transportation network companies, over a six-month timeframe. (See Austin Monitor, May 16) 


Lyft drivers and passengers find each other via the company’s smartphone app.


According to city officials, if drivers are paid, they could conflict with city code. Carlton Thomas, the city’s acting Parking Enterprise Manager, said that the Austin Transportation Department “(has) not been contacted by anyone” at Lyft with regard to required chauffeur licenses or taxi permits. He said the city’s Ground Transportation Enforcement team would enforce city code.


By Lyft policy, riders pay drivers by donation. Signing up with Lyft’s free app Wednesday yielded a message saying, “Help us build the community and enjoy 50 free rides” over the next 15 days. All rides will be free in Austin as part of the launch rollout, according to Lyft representative Katie Dally.


The upstart launch puts would-be allies like the activist group ATX Safer Streets in an awkward position. “We look forward to promoting, endorsing and using the (transportation network) companies once the (City Council’s) pilot program’s regulations have been established,” founder Sara LeVine wrote in an email.


“I believe companies like Lyft have a place in Austin, but I’m not sure the confrontational approach they’ve taken is all that productive,” tweeted Urban Transportation Commission member Jace Deloney. “But much respect to whoever is head of Lyft’s organizing efforts in Austin for pivoting focus away from electeds and to the consumers.”


Council Member Chris Riley, who sponsored the May 15 resolution, said via email, “Our current regulations don’t allow Transportation Network Companies (TNCs). While I understand Lyft’s desire to operate in Austin immediately, and I agree that there’s a demand for these kinds of services right now, it’s important to get an appropriate set of regulations in place before we introduce TNCs into our transportation network. I would encourage Lyft and others to work with the city and other stakeholders in the process initiated on May 15 so that TNCs can operate safely and legally in Austin as soon as possible.”


In a statement, Ed Kargbo, president of Yellow Cab Austin, said that rideshare companies “choosing to launch illegal operations shows a complete lack of respect for the City of Austin. We strongly advise everyone to ask for proof of commercial insurance before using any illegal service.” In an earlier interview, Kargbo criticized rideshare companies for not serving customers without smartphones, not ensuring accessibility for disabled passengers, and not providing primary insurance for drivers.


Insurance questions have long dogged Lyft and other rideshare companies, whose drivers operate their own cars and may lack commercial insurance policies. In September 2012, Lyft announced a free $1 million excess liability and uninsured/underinsured motorist policy intended to cover drivers whose personal insurance will not pay a claim.


This March, it added contingent coverage for drivers who have their own collision coverage. Dally emailed that she does not have data to share on insurance claims paid. However, she asserts, “you are more protected riding in a Lyft than riding in a taxi, given the insurance coverages each entity provides.”


Asked via email if the launch was part of the city’s pilot program, she replied, “By passing the resolution to create a new regulatory structure for TNCs, the city has demonstrated that the current structure does not account for emerging and unique business models. We are committed to staying at the table and continuing to work with the city, as we have in jurisdictions across the country.”


A Friday-night “Lyftoff” party at Rainey Street’s Bungalow will admit anyone over 21 who has downloaded the free Lyft app.

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