City gives ride-sharing app green light

AUSTIN (KXAN) — A new mobile app is working to cut down congestion on Austin’s roads through ride sharing. The app, Carma Carpooling, isn’t the first to try to do that, but the city was quick to shut down others because they didn’t have permits.

Carma Carpooling is legal because drivers aren’t making a profit, so the city looks at it the same as a group of friends carpooling to and from work in order to cut down on congestion.

More than 300,000 cars take to Austin roads every day with just one person in them. That’s where Carma Carpooling comes in.

GOING IN-DEPTH // Ride-sharing apps gain popularity
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  • People are using Sidecar to arrange rides in eight cities.
  • Lyft is up and running in 22 cities across the country.

“Carma is about hooking up everyday commuters that live in the same neighborhood, or work within walking distance of each other,” said Paul Steinberg, Carma’s vice president.

Heyride, a ride-sharing program, was forced to shut down operations in the city because drivers did not have permits, the Austin Transportation Department said. The city says when drivers can set their own rates and earn a profit, that’s when they’re treated like taxi cabs.

“It’s not friends taking friends, it’s the money being exchanged, the compensation,” said Steve Grassfield, with The Austin Transportation Department.

With Carma Carpool, riders pay 20 cents per mile and drivers earn 17 cents per mile to pay for gas and car maintenance. Federal regulations say drivers who earn anything less than 56 cents per mile are not considered vehicles-for-hire.

Like similar apps, Carma Carpooling allows riders to rate drivers and connect through social media apps.  All drivers are required to have insurance.

“The idea is that we are not trying to match up strangers,” said Steinberg. “We are trying to match up neighbors and co-workers that didn’t know they lived next to each other until the advent of mobile phones and social media.”

Carma Carpooling has partnered with The Central Texas Regional Mobility Authority, and TXDOT is even offering rebates for Carma Carpoolers who drive on toll roads.

The app’s creator says its intended use is for carpooling during rush hour traffic and not for rides at night to and from downtown. provides commenting to allow for constructive discussion on the stories we cover. In order to comment here, you acknowledge you have read and agreed to our Terms of Service. Users who violate these terms, including use of vulgar language or racial slurs, will be banned. If you see an inappropriate comment, please flag it for our moderators to review.

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