Uber and Lyft Spend $8.2 Million To Lose Fingerprint Election, Vow To Leave Austin (examiner.com)

On Saturday voters in Austin, Texas refused to repeal a new regulation that requires fingerprinting drivers for ride-sharing services like Uber and Lyft. In Austin's most expensive election ever, the ride-sharing services spent over $8.2 million pushing Proposition 1, apparently outspending their opponents by a 80:1 ratio. But on election day, the proposal to repeal ultimately received just 39,083 votes -- 44% of the total cast -- meaning the lobbyists spent $209 for each vote received. Both services have said they will cease operations in Austin rather than perform the fingerprint-based criminal background checks.

Comments

Waste of money

[etinin]

They could rather have spent this kind of money performing the actual background checks.

Re:Waste of money

[sycodon]

They already do perform background checks.

Make no mistake, this had nothing to do with "safety" on the party of the City Council. This was about control, political connections, and Austin getting a taste of Uber and Lyfts cash. It's a classic shake down. Several City Council members have close ties to the local Taxi companies, who were getting their clocks cleaned.

Taxi Cabs have enjoyed a public monopoly and regulated shortages for decades, The barrier to entry is very high in the Taxi market. The city made lots of money from taxes and fees and regulated what taxis went when and where. Along come Uber and Lyft. they don't play Austin's game.

Before Uber and Lyft, it was very difficult to find a cab at 2AM downtown. There weren't enough for all the partiers. With Uber and Lyft in the market, drunk driving incidents have gone down and people were very satisfied with Uber and Lyft's service. So what happens when a business is making money and has happy customers? Yep, the politicians step in to fuck it up. Austin wants to control prices, wants fees, and wants to limit the number of drivers.

So now Uber and Lyft leave and more people will stumble to their cars at 2am and drive drunk, More people will drive their own vehicles downtown, taking up parking and clogging up traffic. The cost of getting a ride will go up and service will decline.

It's the Detroit model where special interests win out over common sense.

Re:Waste of money

[Anonymous Coward]

I am very much a libertarian sort of person, but I don't agree with Uber and Lyft on this one. That they should spend so much money to avoid conducting the most basic level of a serious background check makes me wonder if the are trying for willful blindness. A bogus background check just asks you to say who you are, and then they check your name. By requiring fingerprinting, Austin is helping to insure that individuals aren't side-stepping a criminal past.

It is fairly easy to get fake credentials such as name and SS#, and pass yourself off as someone else. Admittedly, someone could fake or alter their fingerprints, but it is more durable. It is also less intrusive than a DNA check, which I would oppose, even though it might catch a few more people than fingerprints alone.

I don't believe there should be unlimited "liberty" for those who are going to have another person alone in their vehicle, for hire.

Re:Waste of money

[squiggleslash]

So why were voters adamantly against Lyft and Uber being exempt from these regulations?

I mean, you describe it as a "shakedown" by "City Council members (with) close ties to the local Taxi companies", yet it looks to me like even in the face of overwhelming pressure to do the opposite, a majority of Austinites supported it. Are you arguing a majority of the people in Austin have "close ties" to the local Taxi companies? Or were they bamboozled by a campaign that apparently barely existed and somehow managed to miss the "truthful" message of a campaign that was supposedly hard to miss?

And what, exactly, is the problem with free city mandated background checks anyway?

Just curious, but this kinda sorta looks like one of those cases where Uber (et al) has decided their business shouldn't be subject to any of the same regulations as existing companies that do the same thing, even the regulations that have nothing to do with the differences in their service. Would you say this is a fair description of what's happening here?

Or do you think local governments should only be able to regulate the precise nature and quality of background checks if it applies to drivers who are hailed from the street, but not if they're hailed from an app on a mobile phone?

What is it about apps that makes the concept of background checks entirely different?

Ads Backfired, I Hope

[thrich81]

I live just outside of Austin and couldn't vote on this but would have voted against Prop 1 (against Uber an Lyft) just because of the annoying radio ads constantly running against it -- the ads with the hushed, concerned female voice saying things like, "Did you know that the city will take over background checks, at taxpayers expense?" Combine that with the threats to leave the market... After enough of those I wasn't even interested in looking into the merits of the arguments on both sides. Good riddance, although Uber and Lyft will probably run to the state government and get some State Rep from Bumscrew, West Texas to sponsor a bill overturning all local elections/ordinances preventing "consumer ride choice freedom".

Re:Ads Backfired, I Hope

[Anonymous Coward]

I live in the city and got tired of the ad barrage about government overreach. What Prop 1 would have done is not have regulations that apply to taxi drivers apply to them, as well as giving Uber/Lyft drivers the ability to stop and park -anywhere-, which causes traffic jams as they can sit blocking a road for almost a half hour.

Taxi drivers also have to have a special licence in Texas, a chauffeur's license. This is not cheap. Ridesharing services? AFIAK, Nothing needed, so they get a free pass when it comes to this regulation.

My take... if they want to take their toys and go home... so be it. There are other ridesharing companies which will obey the law of the land, who will gladly take their business.

Incessant advertising

[SydShamino]

My friends who have used Uber said that they were getting like 3-4 mail advertisements a week about this, plus emails, texts, etc. Some who otherwise wouldn't care voted against it because they were so annoyed at the spam.

Austin still has a driver service besides taxis. Get Me operates here and complies with the background checks.

Re:It is their right to leave

[pem]

That's completely backwards.

Austin defeated an ordinance that was forced onto the ballot by Uber and Lyft, who said "Pass our ordinance or we'll pick up our toys and go home."

This was never really about Austin. It was about teaching a lesson to other cities who might follow Austin's lead.

Uber and Lyft have backed themselves into a corner. If they leave, they'll leave an opening for other companies to come in and grow (GetMe is already here and probably salivating at the prospect); if they don't leave, they'll show other cities they can be cowed after all. So expect them to leave long enough to show other cities they mean business, but then come back with deep discounts and free rides to kill off any homegrown competition.

FWIW, it's not just about fingerprints. For example, currently, Uber and Lyft are theoretically prohibited from stopping in traffic lanes (because people die when they do that), but the proposed ordinance was going to change that because they can make more money if they inconvenience everybody else.

But to the extent it was about vetting drivers, don't for a minute think that Uber and Lyft are planning on cheerfully taking responsibility for the actions of their drivers anyway.

Re:the issue?

[Anonymous Coward]

Entitled? How about let the consumer decide.

The consumers did decide, it went to a vote and Uber lost.

They can't afford the checks

[rsilvergun]

because they're already short drivers. Uber doesn't pay enough to cover rent let alone the wear and tear on a vehicle. I know the popular belief is that their drivers are college kids out for beer money but in my experience it's mostly desperate people. A lot of those are ex-cons who can't get any other work in an increasingly bad economy. Why hire an ex-con when you've got 100 guys with clean records to choose from? A lot of Uber drivers won't pass the checks. That'll mean Uber will have to pay better to get more drivers. e.g. more surge pricing. That'll eliminate their competitive advantage over taxis.

Uber and really the entire "sharing" economy can't survive without white knuckle desperation. Take those people out, however you do it, and they'll collapse. And that's just what they did in Austin.

There are lots

[rsilvergun]

my brother just took an Uber and both folks were recently laid off. Also, I hate to be rude but were you not listening? Uber doesn't pay enough to pay for the wear and tear you're putting on your car. You're making well under minimum wage when you factor in the actual costs. And that's before we talk about the risk of driving professionally without commercial insurance (which again, Uber doesn't pay enough for).

Uber was, is and always will be only viable so long as they can externalize their costs. That's why every single one of these "sharing" economy companies shut down the moment they were made to stop doing that. Remember that company that did the same thing with Maid services? As soon as the local government demanded they pay minimum wage by reimbursing the workers for mileage and supplies they shut down. Completely. Hell, they couldn't survive paying _minimum wage let alone a living wage. Neither could Uber.