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Thursday, October 30, 2014 |  Madison, WI: 40.0° F  Overcast
The Daily
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Mobile app rideshare company Lyft eyes Madison amidst regulatory hurdles
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Madison is just starting to look at the issue of ridesharing apps like Lyft.
Credit:Lyft

A mobile app rideshare company might be setting its sights on Madison.

Lyft recently put up ads on Facebook and other social media looking for drivers in the Madison area. A company spokesperson stated in an email that Lyft currently has no plans to begin operations in Madison but is testing ads in 20 cities. Currently, the company operates in 22 cities around the country; its cars are usually adorned with a fuzzy pink mustache on the grill.

The Lyft mobile application allows customers to order rides from local residents who use their personal vehicles. According to the company's pitch to drivers, customers are asked to give them a recommended donation in place of set fares; Lyft drivers earn 80% of these donations. Lyft spokespeople did not respond to requests for interviews.

A similar service, Uber, operates in Milwaukee and about 70 other cities around the world. It offers on-call vehicle hires in company cars which, though standardized, are not marked like taxi cabs. Uber's minimum fare charge in Milwaukee is $12; it also offers fixed-rate rides to and from Madison for $175.

Under current city law, neither Lyft nor Uber would be able to operate legally in Madison, says Assistant City Attorney Adriana Peguero.

But the lack of regulatory approval hasn't stopped Lyft and Uber, both of which are San Francisco-based, from moving into other markets.

On Feb. 21, Lyft and Uber introduced trial versions of their services in Houston, Texas, even though neither has approval to operate there and the city is currently reworking its transportation regulations. By offering the trial services for free, both companies avoid fines under the current ordinances.

And on Feb. 24, Columbus Business First reported Lyft launched in Columbus, Ohio, "ahead of alterations to the city's vehicle-for-hire code."

Taxicab regulations

Under Madison law, any vehicle that provides transportation for hire must be licensed by the city -- this includes services where drivers only receive tips as compensation.

Through these ordinances, fleet vehicles must be uniform in color and companies have to carry insurance coverage and operate 24 hours a day all week.

"Our concern is safety and the customer and providing service throughout the city that's reliable and safe," Peguero says.

Both Lyft's and Uber's websites state they conduct background checks on their drivers.

Mike Dentice, operations manager for Badger Cab, says that if rideshare companies are allowed to operate free of regulation, the playing field for vehicles-for-hire would not be even. Licensed taxis, for instance, cannot legally refuse a customer service, he points out.

Additionally, city-regulated companies cannot raise prices during peak demand hours, but Lyft and Uber have surge pricing policies -- which Lyft calls Prime Time Tips -- that make the highest-traffic hours the most expensive.

Dentice says that especially with this surge pricing, companies like Uber could have trouble matching the prices of existing cab companies in Madison.

"I think they have a place [in Madison], but I think they have more of a place in a larger city," he says.

Upcoming discussions

In early February, taxi drivers in Chicago sued the city, charging that its failure to hold new rideshare companies to the same standards as cab companies -- including requiring a taxi medallion -- discriminates against traditional cab service providers.

Madison is just starting to look at the issue. Keith Pollock, an analyst in the city's traffic engineering division, says in an email that "the city is still in the early stages of studying the concept of shared-ride apps." But he says he is "pretty certain" that there would be upcoming discussions on the topic.

Peguero is anticipating the same: "We know it's something that is probably going to become a more pressing issue soon."

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