UPDATE: Lyft Will Continue Free Rides

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Lincoln, NEB. Lyft representatives said they will continue to offer free rides until further notice.

Despite warnings from Nebraska officials, a mobile app called Lyft that offers rides began offering rides two weeks ago in Lincoln and Omaha. Right now, it's a debate at a stand still. Both the Nebraska Public Service Commission and Lyft said they're willing to compromise.

Our hope is to discuss this unique new model with leaders so that they understand what Lyft is all about," said Lyft spokeswoman Paige Thelen.

"The service, in our examination of the situation, is illegal if they don't have commission authority," said Mark Breiner, the Nebraska Public Service Commission Motor Vehicle Department director.

That authority hasn't been granted because the PSC said Lyft in Nebraska has dangerous potential.

"There isn't any regulation of their rate, there isn't any regulation as to what time or where they have to provide the service or if they're going to charge more to go into certain areas or whether they're even going to serve those areas. Without the regulation, there isn't any requirement that they do that and we think that's important," said Breiner.

Breiner said background checks, insurance and vehicle safety are also concerns. But Lyft disagrees.

"We carefully designed our safety measures to go above and beyond existing transportation requirements by implementing an extensive screening process that includes background checks, driving record checks, additional insurance coverages, vehicle inspections, to give both drivers and passengers peace of mind," said Thelen.

Lyft thinks the PSC is looking at the app through an outdated lens.

"The idea of applying an old regulatory model to a new innovative solution doesn't work," said Thelen.

Right now Lyft is in a two week free trial period. Because they aren't charging for rides, the PSC and police said there isn't anything they can do right now.

Police said they're discussing what they would do in the event Lyft does begin to operate without the proper permissions from the PSC.

Both sides said they're willing to look for compromise, but Breiner said he doesn't think that's going to come about before the Lyft two week trial is over.