Uber and Lyft invested $8.6 million to overturn a city ordinance in Austin that requires fingerprint-based background checks for drivers, but they still lost.
By Story Hinckley, Staff MAY 8, 2016
Uber and Lyft drivers will require fingerprinting, the city of Austin confirmed in a vote Saturday.
As of February 1, 2017, all drivers employed by ride-hailing companies in the Texas capital must pass fingerprint-based background checks. Proposition 1, the ballot measure backed with millions from the companies to repeal this city ordinance, was rejected by a popular vote Saturday.
“Uber, I think, decided they were going to make Austin an example to the nation,” David Butts, who led the anti-Prop. 1 campaign called "Our City, Our Safety, Our Choice," tells the Austin American-Statesman. “And Austin made Uber an example to the nation.”
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A 12 percent majority voted down Proposition 1, with 17 percent of all eligible voters turning out for the vote. Both companies threatened to leave the city of Austin if Prop. 1 failed, and so far they are both following through with their promises and ceasing operations in the city, beginning Monday.
Nobody wants them to leave and we’re not asking them to leave,” Councilmember Ann Kitchen told KUT News. “The voters have spoken and they want these requirements and I know that we can do that… I don’t know why they would leave. We held the election that they said they wanted.”
Saturday’s election marks the first time that a major US city has held a popular vote on stricter regulations for ride-hailing companies. And judging by the millions of dollars spent on the Prop 1 campaign, Uber and Lyft fear Austin’s regulation may send a message to Chicago, Los Angeles, and Atlanta – cities that have contemplated similar laws.
“Unfortunately, the rules passed by city council don’t allow true ride sharing to operate,” Lyft said in a statement. Lyft, now worth $5.5 billion, says they already require comprehensive safety measures, and that a fingerprinting requirement would make it more difficult for the company to employ part-time drivers.
Requiring stricter background checks is actually a public safety concern, argued Uber, which is valued about $62.5 billion. Fingerprinting can slow down the influx of new drivers, and a robust ride-sharing fleet is necessary to cut down on road dangers such as drunk driving.
“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,” Uber tells KXAN.
Ridesharing Works for Austin, the companies’ organization promoting Prop 1, spent $8.6 million, an amount previously unseen in Austin politics (the previous record of $1.2 million was set during Mayor Steven Adler’s 2014 mayoral campaign.) By comparison, "Our City, Our Safety, Our Choice," spent roughly $125,000.
It is clear that Uber and Lyft saw national implications with Austin’s local ordinance.
Fingerprint-based background checks typically cost $40, so those $8.6 million campaign funds could have checked 215,000 drivers. Last year, Uber contracted with about 162,000 active drivers in the United States, while Lyft has more than 100,000. With just $2 million more, Uber and Lyft could have already funded fingerprint-based background checks for all of their drivers.
“As I talked to voters at the polls and on the phones, many of them like Uber’s service and Lyft’s, they use it, but they drew the line at allowing them to write their own rules,” Mayor Pro Tem Kathie Tovo tells KXAN. “And that’s really significant.”