Lyft car-pooling opens in LA despite regulatory challenge

California regulators last week called the service illegal

Lyft's coverage areas in LA, pictured as of Sept. 16, 2014.

Lyft's coverage areas in LA, pictured as of Sept. 16, 2014.

Lyft is bringing its car-pooling service to Los Angeles, even while California regulators say it's illegal.

The company said Tuesday it was rolling out Lyft Line, its new service for shared group rides, to LA. The expansion was announced just days after the California Public Utilities Commission warned Lyft, as well as Uber and Sidecar, that their car-pooling services were illegal.

With Lyft Line, an optional way to use Lyft's app, a passenger can let the driver pick up other riders along a route and split the fare. Lyft says the service can be up to 60 percent cheaper than a regular Lyft ride.

In Los Angeles, Lyft is positioning Lyft Line as a solution to the problem of residents driving alone on gridlocked highways. Apparently it had the blessing of LA Council Member Mitchell Englander. "The shared rides Lyft Line provides have enormous potential to lessen traffic gridlock, improve air quality, and increase affordable transportation options," he said in a Lyft blog post.

But last week the CPUC said the service was illegal under California law. Charging individual fares to passengers when multiple people are being transported in the same car is illegal, they wrote in a letter to the firms.

Lyft, Uber and Sidecar said they would be working with the CPUC to come to an agreement on the service.

But for Lyft to launch the service days later in LA shows a different tact.

"We encourage the CPUC to interpret this rule from a 21st century position that puts consumers first and in a way that fits the spirit of the law," a Lyft spokeswoman said Tuesday. "We will continue to work closely with the CPUC, and we've done since 2012, to secure a future for this innovative option throughout the state of California," she said.

Previously, Lyft Line was only available in San Francisco. It will be rolling out to all LA users over the coming weeks, Lyft said. Uber and Sidecar's car-pooling services are still only in San Francisco.

A spokesman for the CPUC declined to comment on the LA expansion.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is zach_miners@idg.com

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