Austin voters have decided that drivers for ride-hailing companies, including Uber and Lyft, must pass fingerprint screenings--a more intensive background check than the companies typically require of their contractors--by February 1, 2017.
In the end, the voters in Texas's capital city could not be wooed by copious amounts of money and the sleek promises of Silicon Valley to make their lives easier. Together over the course of the past year, Uber and Lyft have spent up to $9 million in a vain effort to overturn the city's proposed safety measure, viewing Austin as an important test case in the broader struggle between local regulators and Silicon Valley upstarts with novel business models and global ambitions.
The ride-hailing companies are fighting restrictions in other cities across the country, including Chicago, Houston, Los Angeles, and Atlanta.
Lyft and Uber have both in the past said they'd pull out of Austin and other cities that require driver screenings more rigorous than the ones they've enacted. The Austin vote took place on Saturday, and, afterward, the Austin American-Statesman reported that both companies reiterated the threat. As of Monday morning, Lyft, followed by Uber, seemed to be suspending ride-hailing services. (UberEats--which ferries food, not humans--continues to operate.)
"Lyft and Austin are a perfect match and we want to stay in the city," Lyft spokeswoman Chelsea Wilson said in a prepared statement. "Unfortunately, the rules passed by City Council don't allow true ride-sharing to operate."
Austin's mayor, Steve Adler, has said for months he doesn't believe the amended ordinance will cause these companies to leave the city.
To local politicians, and in TV and direct-mail advertising, the San Francisco-based ride-hailing companies argued that fingerprint checks were both unnecessary and caused too much of a burden for their local teams.
Advocates of fingerprint-based background checks say conducting them is the simplest way to determine past criminal activity.
Uber has said fingerprint-screening drivers is redundant to its existing driver-screening processes. Citing its own statistics, the company claims that last year 53 drivers who failed background checks to become Uber drivers have been issued chauffeur's licenses by the City of Austin.
But the city had been rigorously studying the effects of ride-hailing since it debuted in Austin in 2014. (See my previous piece on the unusual political and regulatory landscape in Austin, and the unique challenges it placed in front of the startups in what's known as the "sharing economy.") One study examined sexual assault claims for a few months last year. According to KXAN in Austin, "between April and August, Austin police received five complaints from women stating their Uber driver assaulted them. Two other complainants told detectives they were assaulted by their Lyft driver, records show.
Uber had been pulling out all the stops in Austin in an effort to woo local voters. (Of course, it's in addition to the millions of dollars in advertising and campaign-donation spending.) For instance, in March it offered free home cleanings, via a partnership with Austin based home-cleaning business Lemme Shine. It also sponsored a free double-decker river cruise with musician Gryffin.
In a display of true entrepreneurial spirit, of course there's a local upstart waiting in the wings, eager to jump in if Uber and Lyft actually do follow through on their threats to pull service from the Austin region. It's called Get Me, and is a hybrid people-moving and messenger service. Get Me is moving its headquarters to Austin this year, it said in a December news release.