Uber and Lyft Defeated by Voters in Austin, Texas

City desire to fingerprint all drivers will drive the e-hailing companies out of the city.


Activist obsession with "level playing fields" in non-commensurate businesses (taxis lack the user rating and identification systems that Lyft and Uber have) primed the citizens of Austin to vote for regulations that they knew (or had every opportunity to know) would drive the very helpful smartphone ride-hailing services Uber and Lyft out of their city.

Last December, the Austin City Council passed regulations on the e-hailing services that the company's were unhappy with, including fingerprinting drivers. Lyft and Uber ginned up enough citizen anger over the regs—these services are widely used and provide lots of convenient jobs—to petition to legally force a ballot proposition to uphold or overthrow those regs. That proposition was voted on yesterday.

Those regs that Uber and Lyft wanted to kill were upheld, 56 percent to 46 44, with 17 percent voter turnout. The upheld regs also demand cars working for the companies be visibly marked with the companies' emblem, and avoid stopping to pick up or drop off in any lane with moving traffic.

As a result, both Uber and Lyft have announced they will suspend operating within Austin city limits tomorrow morning.

This Texas Tribune account sums up the opposing sides:

Supporters of Uber and Lyft have argued background checks regulations from cities are redundant, as ride-hailing companies have their own safety procedures already in place. 

….Huey Rey Fischer, deputy outreach director for Ridesharing Works, [said] "The problem is that fingerprinting is flawed in so many other respects, whether it's discriminatory against people of color or the fact that not enough drivers would actually sign up to meet demand, which is the greater reason." 

Opponents of Proposition 1 insist city-regulated checks are safer, and they see Uber and Lyft's aggressive campaigning as bullying, insisting the company is using "misleading" advertising to bend the city to its will. 

"We, unlike Uber and Lyft, do not have access to millions of dollars," said Austin Mayor Pro-Tem Kathie Tovo during a press conference in April. "Uber and Lyft are running a deceptive campaign in a blatant attempt to confuse the voters and allow corporations to write their own rules. These misleading campaign ads are simply reprehensible, and they're a huge disservice to our community."

The pro-Proposition 1 campaign has not gone uncontested. Uber was hit with a class-action lawsuit on Wednesday over "robo-text messages" the company distributed to customers. A complaint has also been filed with the Federal Communications Commission.

Austin is just one front, albeit now a losing one, in constant city-by-city wars these companies are fighting:

They have pit themselves against local governing bodies both in Texas and across the country and have carried through on their threat to leave cities with unfriendly regulations, ceasing operations in Galveston, Midland and Corpus Christi. 

This conflict also is coming to a head in Houston, one of two cities in the country where Uber remains despite existing fingerprint background check directives. Lyft closed up shop when the new regulations went into effect, leaving Uber alone in the city's ride-hailing industry — but perhaps not for much longer. In April, the company threatened to leave Houston if the city did not repeal its regulations.

Quartz sees this defeat—the pro-Uber forces outspent the anti-ones enormously, over $8 million to around $130,000—as the end of Uber's power to get what it wants from city governments.

My own read of the debate as it unfolded in social networking and other public sites I viewed is that a sort of Lawful Good insistence that, no matter how hard it made it for these companies to get the large and churning body of drivers it needs to stay viable, that rules is rules and everyone driving for hire should just follow the same ones, despite the obvious differences in how taxis and smartphone-summoned rides function and discipline drivers.

When I wrote my first detailed report on these services city-by-city regulatory battled in 2014, "Smartphones vs. Taxi Drivers," they weren't legally allowed to operate at all in Austin yet. Since then, I chronicled details of an earlier step in Austin's contentious relationship with these helpful, job-creating services, and reported on how Uber succeeded in a very similar battle in San Antonio, Texas.

But it sounds like now as of Monday Austin will be a lot harder a city to get around in without owning your own car, which is a shame for everyone.