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App companies defy City Hall

Uber and Lyft plan Houston invasion by offering car-calling app services for free

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Lyft car service
A certified Lyft driver from California poses with the company's trademark pink mustaches. Lyft/Facebook

Despite the reality that their paid services are still illegal in Houston, a pair of rival tech companies will enter the local transportation market on Friday, boldly skirting city ordinances by offering their ride-sharing programs for free.

Lyft and Uber — both of which allow customers to request rides from prescreened drivers via smartphone — have been keeping close tabs on City Hall as officials continue discussions about municipal laws that currently ban app-based taxi and limo services.

The ride-sharing apps remain legal as long as money doesn't change hands. 

But instead of waiting for lawmakers to spend weeks and even months amending the ordinances, the two San Francisco companies have decided to unveil their services for free throughout the Inner Loop area.

City spokesperson Christopher Newport tells the Houston Business Journal that a ride-sharing app remains legal as long as money doesn't change hands. But once a driver accepts so much as a small tip, companies face misdemeanor fines as high as $500 apiece until the ordinances are rewritten.

"New type of business model"

Nairi Hourdajian of Uber, which, since the summer, has tried to release a Houston limo service with city-certified drivers, says her company will offer a free version of its UberX ride-sharing program in Houston for a limited time so people can experience "the Uber magic" for themselves.

"We're going to see how the conversation moves ahead before making Uber a permanent fixture here," she tells CultureMap. "It's clear to us what Houstonians want. We'll just have to see if the mayor and city council will stand up for the city's transportation future."

Often viewed as a lower-cost competitor to Uber, Lyft prides itself on having customers pay a "suggested donation" amount rather than a specific fee. Mayor Parker has yet to be won over by the novel approach.

"There are some working girls that work the streets of Houston who say, 'We're legal because it is just a donation,' " she told the Houston Chronicle Wednesday. "I'm sorry, we will enforce our ordinances."

Lyft spokesperson Erin Simpson explains that her company is a "new type of business model" rather than a traditional taxi or limo service . . . a claim championed by many app-based transit firms as they clash with older taxi companies still forced to comply with longstanding city regulations.

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