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Ban? What ban? Lyft buys carpool app maker Hitch
Ridesharer splashes on multi-rider transport service
Ride-sharing service Lyft is looking to boost its carpooling service with the acquisition of smaller rival Hitch, even though both companies could be in violation of California state laws.
The company said that Hitch, which specializes in a ride-sharing service similar to Lyft Line, would should down effective Tuesday and all drivers affiliated with the service would be signed on as Lyft drivers.
Lyft hopes that the move will bring a boost to its burgeoning Line ridesharing service, which was launched last month in San Francisco and expanded to Los Angeles earlier this month. Like Hitch and Uber's Pool service, Line allows multiple users to book the same car and be picked up in various locations by the same driver.
"Lyft Line is in its early stages, and we're only beginning to see what we can do with shared rides," Lyft said of the acquisition.
"We have seen incredible growth and demand for Lyft Line in San Francisco, and the Hitch team and technology will help us move even faster to bring shared rides to more people."
Terms of the deal were not disclosed.
The timing of the acquisition suggests that Lyft is confident it will prevail in convincing California regulators to allow the carpooling services to legally operate. Earlier this month, the California Public Utilities Commission (CPUC) said that currently, the services would technically violate state laws on commercial cars.
Regulators have warned that as it stands, carpooling apps which collect reduced fees for shared trips would be subject to different licensing requirements than the single-trip car services Lyft and Uber are better known for.
Those agencies have also suggested the companies work with legislators to modify and update the regulations in order to be compliant with the law. ®