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Lyft Takes Aim at Public Transit With New Carpool Service

While Lyft recently made headlines for its legal battles with New York City taxi regulators, the ride-sharing app's latest service is taking aim at a new transportation sector: public transit.

The company unveiled a new low-cost ride-sharing service for San Francisco users on Tuesday called Lyft Line.

SEE ALSO: 10 Excellent Apps to Improve Your Commute

Lyft Line, which is rolling out as an update to the company's existing iOS app, is something of a combination between Lyft's original service and carpooling. Users who opt in for Lyft Line are matched up with others headed to destinations nearby or along a similar route, so multiple passengers can share the same Lyft for a cheaper fare.

Once you request a ride on Lyft Line, the app will give you a price and an estimate for how long it will take to match you with another passenger. The price is fixed, and Lyft says the matching process will never take more than a couple of minutes. Since it's a shared ride, passengers are expected to be ready as soon as the ride arrives and the company says it expects the extra stops will only add a few minutes to each ride.

"This is great for passengers but it's also good for drivers because drivers earn more on longer trips," said Lyft cofounder John Zimmer. "This will not only help create longer trips but less downtime."

Prices for rides on Lyft Line are meant to be competitive with public transit. The company says fares on the service are typically 30 to 40% cheaper than the average single Lyft ride, though discounts can be as high as 60% in some cases.

The update was led by David Dryjanski and Lev Popov, cofounders of the Y Combinator-backed transit startup Rover, which Lyft quietly acquired in April. Lyft did not disclose the terms of the deal, but said the acquisition was what ultimately lead to the new service.

The company is launching Lyft Line to iOS users in San Francisco first, but says more cities and Android support are also in the works.

Uber, Lyft's biggest competitor in the ride-sharing space, recently announced it was launching a similar shared ride service, UberPool. The service will also be rolling out to San Francisco first, as a private beta beginning Aug. 15, and the company says it expects users will save 40% per ride.