Ride-sharing startup Lyft and its pink-mustachioed cars are making their East Coast debut. Today Lyft announced that it is entering Boston.
The company closed a $60 million round of funding last week led by Andreessen Horowitz. Cofounder John Zimmer said the money was to fuel expansion and that he intends to spread across the country and go global by the end of next year. Boston is the company’s first market on the East Coast.
Lyft first launched in San Francsico in 2012. It operates a peer-to-peer alternative to taxi cabs. You order a car using the iPhone or Android apps and the driver –‘your friend with a car’ – picks you up at your location. Lyft now facilitates 30,000 rides each week and operates in San Francisco, Los Angeles, Seattle, Chicago (as of May 9 2013), and now Boston.
Every city presents a fresh challenge to transportation startups like Lyft and its competitors Uber, Hailo, and SideCar because every city has a unique set of regulations surrounding taxi cabs. These companies have all fought battles with taxi commissions around the country and local governments to stay afloat, and so far they seem to be winning.
SideCar entered Boston in March 15, 2013, shortly after one of Boston’s largest cab companies filed a lawsuit against Uber. Lyft, like Uber, has a passionate community of users who rally together on social media whenever legal issues arise. The cab industry saw little innovation for years, and tech startups have started disrupting it with on-demand, mobile alternatives to standing on a corner with your arm out.
Uber originally started out as a black car service and entered the ride-sharing arena in April. Founder Travis Kalanick wrote in a white paper that Uber initially refrained from participating in ride-sharing due to regulatory risk, but would now make it one of the app’s services.
“In most cities across the country, regulators have chosen not to enforce against nonlicensed transportation providers using ride-sharing apps,” he said. “This course of nonaction resulted in massive regulatory ambiguity leading to one-sided competition, which Uber has not engaged in to its own disadvantage. … In the face of this challenge, Uber could have chosen to do nothing. We could have chosen to use regulation to thwart our competitors. Instead, we chose the path that reflects our company’s core: We chose to compete.”
How Boston’s transportation and taxi commissions will respond to Lyft (and its rivals) is yet to be seen. In the meantime, the pink mustachioed-cars will continue to cruise into new cities around the country.