Sore losers: Uber, Lyft suspend Austin service after voters reject effort to lift rules

After losing an election in Austin over rules that govern their services, Uber and Lyft seem determined to teach the liberal Texas city and the rest of the country a lesson.

But some Austinites think the city itself may be able to teach the rest of the country about how to handle the new-wave taxi services.

Following through on a previous threat, both of the top two new-wave taxi services are pulling out of Texas’ capital city. Their moves came after a proposition they backed, which would have overturned new regulations put in place by Austin’s city government in December, went down in flames on Saturday. They companies both suspended service on Monday.

“Due to City Council action, Lyft cannot operate in Austin,” that company said in a message to Austinites who attempted to use Lyft’s app on Monday, according to the Austin American-Statesman. “Contact your City Council member now to tell them you want Lyft,” continued the message, below which was a button labeled, “Let Them Know.”

Lyft and Uber had warned that they would withdraw from Austin if Proposition 1 failed in Saturday’s election. The proposition was a reaction to an ordinance passed by the City Council in December that would eventually require drivers of the two companies and other ride-sharing services to get fingerprint-based background checks. The ordinance also imposed a fee of 1 percent of local revenue on ride-sharing companies, set limits on where drivers could drop off and pick up passengers and required the companies to provide regularly updated information to the city on their services.

The large ride-sharing services objected to the fingerprinting requirement, arguing that their own background checks, which are based on drivers’ names and Social Security numbers were adequate. Traditional taxi, shuttle-bus and limousine drivers in Austin already had to undergo fingerprinting.

Proposition 1 would have overturned the ordinance, forbidding the city from requiring fingerprinting of Uber and Lyft drivers and blocking the other rules also. The two companies campaigned furiously to try to pass the proposition. Ridesharing Works for Austin, the organization they created to sponsor the campaign, spent $8.6 million promoting the proposition. That was a record amount in an Austin city election, more than seven times higher than the previous record, the American-Statement reported.

The effort was for naught. Some 56 percent of voters voted against the proposition. For every one of the 38,539 votes Proposition 1 received, the ride-sharing companies spent about $223.15, the American-Stateman estimated. By contrast, fingerprint background checks cost $40, the paper pointedly noted.

Even though they perform essentially the same service — offering rides for hire — Uber and Lyft have consistently fought against efforts by municipalities to treat them like traditional cab companies. When cities have been bold enough to try to impose cab-like rules on them, the companies have often thrown fits. Uber, for example, last year pulled out of San Antonio, Austin’s neighbor to the south, when it put in place some mild regulations under a pilot program for ride-sharing companies. Uber didn’t return to the Alamo City until San Antonio backed off from those regulations, particularly around an effort to fingerprint drivers.

Austin leaders who led the fight against Uber and Lyft took heart from the vote, saying that it indicated that cities and communities could stand up to the companies.

“Uber, I think, decided they were going to make Austin an example to the nation,” David Butts, a political consultant who led the anti-Proposition 1 campaign, told the American-Statesman. “And Austin made Uber an example to the nation.”

Photo: An Uber decal displayed in the window of the car owned by a part-time Pennsylvania Uber driver. (Nabil K. Mark/Centre Daily Times via AP)


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  • Bopper

    The city of Austin should consider subsidizing a private effort to initiate another ride-sharing service, easily developed in a tech mecca second only to the Bay Area. A public/private joint venture would probably work very well, would allow the city to implement the controls that the public deems appropriate and would serve as a model to other communities being held ransom by Uber and Lyft.

    Nobody likes to be dictated to whether the dictates originate from a government or a corporate entity. This kind of joint endeavor would most likely take some of the arrogance and attitude out of the recently-departed transport organizations.

    • EllaFino

      Why would they when they already have cab companies that follow the passed legislation. And as far as not liking to be dictated to, isn’t that what Uber and Lyft are complaining about.

  • missyleean

    Who is the editor for this publication? This article is full of spelling errors, grammatical errors, and typos.