Last week, peer-to-peer ride-sharing startup Lyft announced that it had raked in a huge amount of new funding, raising $60 million in a round led by Andreessen Horowitz. Along with that funding, the company said it would be looking to aggressively expand its peer-to-peer ride service with launches across the country and even globally. The first new market to bear the fruits of that expansion is Boston.
The launch in Boston will put Lyft on the East Coast for the first time since the startup launched its ride-sharing service about a year ago. The company is now in five markets altogether, including its home city of San Francisco, as well as expansion markets Los Angeles, Seattle and, most recently, Chicago.
The company claims it is just at the beginning of a global expansion, and will be ramping up more launches over the coming weeks and months. That big funding round, as well as the acqui-hire of new COO Travis VanderZanden — try saying that three times fast — should help accelerate all that.
But the planned expansion is not without its challenges. Lyft, for those who don’t know, has a mobile app that connects passengers who need a ride with drivers who have a car (and some spare time). By doing so, the company is providing a service that is generally more reliable than calling a cab but slightly less expensive than booking an Uber.
At the same time, Lyft is operating a service that falls outside the regulatory structure of most local jurisdictions. “Community” drivers from services like Lyft and competitor SideCar aren’t licensed in the same way that taxi or black car drivers are — which, to put it bluntly, usually pisses off local taxi and black car drivers, not to mention their lobbyists and regulators.
That could be a point of contention in Boston, where local regulators have already had run-ins with Uber. Last summer, the on-demand car startup received a cease-and-desist letter from the Standards of the Commonwealth of Massachusetts, apparently because the state had no guidelines in place for using GPS technology, which Uber relies on for picking up passengers and determining fares. The dispute was quickly resolved after a social media campaign by Uber and some intervention on the part of the governor’s office.
For what it’s worth, ride-sharing opponent SideCar has been operating in Boston since March, apparently without incident. That’s good news on the regulatory front, but could signal even greater competition in that market.
That’s because Uber, which has been operating its black car service in Boston for the last year-and-a-half, has committed to competing with Lyft and SideCar by rolling out its own peer-to-peer ride services through UberX in any market where local regulators have given “tacit approval” of those types of services. In other words, if regulators haven’t tried to crack down on ride sharing or community drivers after 30 days, Uber will enter the fray.
With all that in mind, Lyft could have its hands full in Boston. Nevertheless, the company continues to push forward, with a “friends and family” launch in Boston today, and a full launch to all users beginning Saturday morning at 9:00.