Popular ride-sharing services Lyft and Uber will both be “pausing” operations in Austin, Texas after citizens rejected a state-wide proposal on loosened regulations for ride-hailing apps. The city, home to about 2 million people, approved an ordinance in December 2015 requiring that Lyft, Uber, and similar companies be regulated like traditional taxis. One of the most controversial aspects of the ordinance is the requirement that drivers be fingerprinted as part of a wider criminal background check.
In a response to the ordinance, Uber and Lyft campaigned for a ballot proposal asking residents to decide between that or a looser statewide law. Despite extensive efforts – it is reported that the two companies spent around $8 million to promote the law – the ballot measure failed to pass.
“Despite spending what amounted to $200 on each vote in their favor, Uber and Lyft lost by 44 to 56,” reports NPR’s John Burnett.
Lyft and Uber Make Good on Threat to Exit
The ordinance was proposed in order to help protect ride-sharing customers, with similar proposals being discussed in Houston, Atlanta, and Chicago. Last year, both Lyft and Uber withdrew from San Antonio after a similar fingerprinting requirement passed. However, the companies eventually returned after being allowed to make the practice voluntary. They had previously threatened to leave Austin before the crucial vote.
“Lyft and Austin are a perfect match and we want to stay in the city. Unfortunately, the rules passed by City Council don’t allow true ride-sharing to operate,” Lyft said in a statement. “Because of this, we have to take a stand for a long-term path forward that lets ride-sharing continue to grow across the country, and will pause operations in Austin on Monday, May 9th.”
“Disappointment does not begin to describe how we feel about shutting down operations in Austin,” added Uber’s Austin general manager Chris Nakutis. “We hope the City Council will reconsider their ordinance so we can work together to make the streets of Austin a safer place for everyone.”
Austin City Council member Ann Kitchen led the efforts to pass the ordinance and insists the move was simply to educate and protect citizens.
“Nobody wants them to leave and we’re not asking them to leave,” Kitchen said. “The voters have spoken and they want these requirements and I know that we can do that… I don’t know why they not would leave. We held the election that they said they wanted.”
Companies Cite Costs and Company Focus as Reasons to Leave
Uber and Lyft argue that requiring fingerprints for drivers will be both cumbersome and expensive. Drivers would have to go to approved locations to get their prints taken, which could result in a decrease in the amount of people willing to go through the hoops. Alternately, devices that capture fingerprints and send them directly to the FBI – such as Live Scan – could potentially be used however gaining authorization for the units is not guaranteed.
“That would be very expensive and time-consuming,” said Charles Carroll, senior vice president of the enrollment services division at MorphoTrust, a firm that captures fingerprints using Live Scan. “It’s not impossible, but it’s rare for industries to be able to connect directly with the FBI. They would probably have to get political and congressional support as well.”