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City serves Heyride cease-and-desist order

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The city of Austin is asking one new business to cease and desist. They say Heyride, a phone app that connects drivers and those who need rides is not permitted to conduct business..

The city says Heyride needs city authorization because it's a "for-hire transportation service" but Heyride denies those claims.

Brian Defrees is a driver for Heyride, a company that connects those who need a ride with people willing to give a ride through this phone app.

Heyride launched earlier this month. They have about 800 registered users. But their fast success maybe short lived if they cannot come to an agreement with the city of Austin.

"The city ordinances don't allow business of that form," said Gordon Derr with Austin Transportation Department.

Austin Transportation Department issued a cease and desist letter to Heyride about two weeks ago claiming any ground transportation services in which money is exchanged must be regulated by the city.

"We inspect every taxi, pedicab and limousine every year to make sure they meet safety requirements that they have all the safety equipment that's operating," said Derr.

Heyride CEO Josh Huck says he looks forward to meeting with the city about the issue because they have his service all wrong.

"We don't employ any drivers, they're not independent contractors," said Huck. "We don't dispatch drivers, they dispatch themselves. We provide software that enables them to connect with people that want rides."

Huck says fares are between users. He also says background checks for drivers who are picking up strangers are performed and because it's a credit card only transaction there is always a passenger record.

"We've taken great pains to make it as safe if not safer than getting into a car with a complete stranger, in fact we have robust user profiles," said Huck. "You see ratings and reviews from people they've given rides to or gotten rides from."

Still the city says Heyride closely resembles a taxi franchise and so they require a franchise agreement. Derr says that will be the case until they meet with Heyride owners and figure out whether they can work together or begin issuing citations to Heyride drivers. Those could be a Class C Misdemeanor with a fine of up to $500.

Huck hopes to meet with the city in the next week.

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