What Now: Austin Looks for Ways to Bring Back Ride-Hailing Services

Austin—Uber and Lyft both suspended service in Austin Monday morning following the defeat their bid to eliminate driver fingerprinting requirements, among other measurements.

In a Saturday referendum, Austin voters opted to uphold the city’s rules on the ride-hailing companies’ employees with a 56 percent margin. Immediately after the votes were counted, Uber and Lyft announced they would shut down instead of complying with the rules.

Austin users accessing the app Monday morning found a note saying there was no service within the city limits. “We hope to resume operations under modern ridesharing regulations in the near future,” the Uber app states. Uber then provides a link to contact the Austin City Council.

Lyft, which suspended service three hours earlier at 5 a.m. also asks users to “contact your city council members now to tell them you want Lyft back.”

Monday morning, Texas Republican lawmakers said they would file legislation to create one standard statewide regarding ride-hailing companies’ operations.

“It has become increasingly clear that Texas’ ridesharing companies can no longer operate effectively through a patchwork of inconsistent and anti-competitive regulations,” state Sen. Charles Schwertner, a Republican from Georgetown, TX, a city just north of Austin, wrote in several posts on Twitter.

“Any legitimate safety or liability concern regarding ridesharing clearly deserves to be addressed, and I welcome all parties to engage productively in that discussion,” he added. “But as a state with a long tradition of supporting the free market, Texas should not accept transparent, union-driven efforts to create new barriers to entry for the sole purpose of stifling innovation and eliminating competition.”

One newcomer to the ride-hailing business in Austin attempted to attract customers in the wake of the market leaders’ departure. GetMe, which offers both delivery and ride-sharing services, launched in August in Dallas and moved its headquarters to the Texas capital in December.

The company says it will comply with existing city regulations. “We as a business must follow the rules or legislation [of] the cities or towns that we go into, just [as] if we were a restaurant business, there are city ordinances that must be followed,” the company wrote in a Facebook post Saturday.

On Monday, San Francisco-based Wingz, a smartphone app that provides rides to and from the airport, said it is expanding its service to several Texas cities, including Austin.

The rhetoric around the election was about more than Uber and Lyft’s demands. For those who supported the ride-hailing companies, the regulations amounted to unneeded government intrusion that would tarnish Austin’s reputation as an innovative city.

City officials said they were simply acting in the best interests of public safety, a civic concern. Many of their supporters regarded with disdain Uber and Lyft’s aggressive electioneering—they spent more than $8 million—for their position during the campaign—the companies texted and called users with unsolicited appeals for their vote, prompting much public ire and a lawsuit. The companies threatened to leave Austin if the vote did not go their way.

Uber and Lyft left the Texas cities of Corpus Christi and Galveston in a similar fight, and briefly left San Antonio, coming back only after that city made fingerprint checks optional.

Joshua Baer, the founder of the Capital Factory and a strong supporter of Uber and Lyft’s campaign, wrote in a Monday blog post that he doesn’t believe that the election outcome means that Austinites agreed with the fingerprinting regulations.

“Most of the people I’ve talked to who voted against Prop 1 weren’t concerned about fingerprinting—they were just annoyed or offended by Uber’s tactics,” Baer wrote. “They didn’t like the threat of ‘our way or the highway,’ … the aggressive advertising, or the robocalls and text messages. They didn’t like how much money they were spending and the feeling of them ‘buying the election.’ ”

Still, in order to bring back ride hailing to Austin, he said both sides must get beyond an angry “Tech vs. Austin” debate that caused much rancor on both sides.

“There are a lot of things about Silicon Valley that we want to emulate, but the relationship between tech and the rest of the community is not one of them,” Baer wrote. “Bad attitudes and egos are what got us into this mess and only cool heads and open arms will get us out of it.”

Austin Mayor Steve Adler said in a statement Monday that the city is offering an “enhanced one-stop shop” for fingerprinting drivers and background checks.

“Austin is a creative and innovative city, and we’re going to find creative and innovative solutions to ensure Austinites have mobility options,” he says.

Trending on Xconomy