Houston City Council OKS Rideshare Services, Uber and Lyft

August 7, 2014

The city council in Houston gave the green light to smartphone-enabled car ride services on, removing legal uncertainty around popular services including Uber and Lyft.

Separately, the city council in Dallas reviewed rules that could make the services legal there, too. A vote before that city council could take place next month.

Ride services allow members of the public to hail rides at the touch of a smartphone button, or app. The services, which have rolled out in recent years in most major U.S. cities, have sometimes been greeted by suspicion and bans.

The biggest operators, including Uber Technologies Inc. and Lyft Inc., often start operations in a given city and worry about their legal status later. They typically marshal customers to lobby city authorities on their behalf, as well as engaging rulemakers and politicians themselves. In general, cities eventually relent.

Holdouts include Las Vegas.

The services have come under fire from interests that stand to lose. Taxis, which face serious competition from the new entrants, say the services aren’t as safe as taxis and don’t carry adequate insurance.

With a business model that stitches together the buzziest categories in entrepreneurship such as mapping, smartphones and local services, app-based transportation is seen as a hot industry in Silicon Valley.

Investors recently valued Lyft at more than $700 million and Uber at $18 billion.

(Reporting by Sarah McBride; Editing by Frances Kerry)

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