Ridesharing service Uber jumps into Houston market

Free rides suddenly became available in Houston on Thursday night as two online companies clamored for attention before they officially break into the city's cab market.

Uber, which has been working with the city on a high-end private car service called Uber Black, announced late Thursday it would immediately launch its Uber X ridesharing service. The announcement followed competitor Lyft's confirmation Wednesday that it would start service Friday.

The pattern is common as the two companies break into metro markets across the country. When one leaps, the other soon follows.

Entry of these services into more than 20 U.S. cities has prompted lawsuits and cease-and-desist letters from taxi owners concerned about their livelihoods and regulators who accused the firms of skirting the law.

Neither company, however, can accept fares in Houston until the city adjusts its taxi and private car rules, said Christopher Newport, chief of staff for the city's regulatory affairs department.

The businesses contend that they are not taxi and limo services, but simply platforms that connects people who need rides with drivers. The services don't own vehicles or employ drivers.

If drivers accept money, they could be charged with a Class C misdemeanor for operating an illegal taxi. The companies could be charged with running an unlicensed dispatch service. Both offenses are punishable by a $500 fine for each occurrence.

For Houstonians, the rides are free for now. In other markets, the ridesharing companies have charged prices based on peak demand, something cab companies have said is akin to price gouging.

Cabs operate under strict rules, and taxi companies have opposed loosening those regulations to accommodate competitors like Uber and Lyft.

The sudden leaps into the market also complicate the city's efforts to rework its regulations, Newport said Wednesday.

In a joint meeting Tuesday, members of two City Council committees are expected to discuss possible changes to the taxi codes. Newport estimated any new regulations would take seven weeks to take effect.