Lyft's Ridesharing Program Takes Off in Los Angeles. What Does It Mean for the Taxi Industry?

Lyft

Launched in San Francisco in 2012, the mobile-app based ride-sharing program allows members to find drivers in their areas who will shuttle them and others nearby for a fee that's reportedly cheaper than most cab rides.

The program hit the Santa Monica area last week.

Not surprisingly, traditional taxi and limo companies are not pleased. The California Public Utilities Commission -- which regulates the state's transportation systems -- has issued fines against the company and even sent it a cease-and-desist.

But the Commission recently reached a (temporary) compromise with the company: It allows Lyft to continue to while it explores the possibility of added regulations.

The Commission has stated that its main concern is safety.

But John Zimmer, who co-founded Lyft with Los Angeles native Logan Green, tells the L.A. Weekly that the "things that we do for safety actually go beyond what taxis and limos do; you have to go through a criminal background check, a DMV background check and there's a $1 million liability insurance policy." Lyft users are also encouraged to rate their experience; drivers with poor reviews are booted from the program.

Uber, a mobile-based taxi and limo service, has faced similar regulatory resistance as Lyft in other markets. And, as the Weekly reported in July, it's not just startups that have come under fire; the LAPD has been cracking down on unlicensed cab services since 2007, busting an average of 1,000 drivers each year.

But Lyft argues that it's different from these other models. Zimmer notes that his is technically not a taxi service because all charters are pre-arranged instead of made during curbside pickups; therefore, his drivers don't have to be licensed.

He stresses that his company's goal is not to compete with taxis and limos, although, intentionally or not, Lyft and other like-minded businesses are doing just that. Instead, he says, his goal was to create a company that would "foster this power of community to solve big problems" like the environment and overcrowding.

"If you think about it, if 20 percent of the seats on our highways today are occupied, 80 percent are empty," says Zimmer. "If we could solve that, then we could have an incredible financial, environmental and social solution."

Lyft will continue its expansion through Los Angeles' neighborhoods, with a service area that its blog says "will grow to include West Hollywood, Downtown L.A., Silverlake [sic] and other areas west of I-5."

Have you used a rideshare program like Lyft? Do you carpool to work with people in your neighborhood? Share your stories in the comments section.