Austin Voters Will Decide Future of Ride-Hailing Regulations

Feb 11, 2016

Austin voters will decide on a petition-driven ordinance drawn up by ride-hailing companies Uber and Lyft. 

The Austin City Council rejected the ordinance on an 8-2 vote (Council Member Don Zimmerman abstained), which means the ordinance will go to a public referendum on May 7.

The election will cost the city an estimated $500,000 to $800,000.

The Austin City Clerk validated the nearly 20,000 signatures on a petition spearheaded by a group called Ridesharing Works for Austin, which was funded by Uber and Lyft, on Feb. 2. The group says more than 65,000 people signed the petition in total.

The petition ordinance does not require fingerprint background checks for drivers for ride-hailing companies like Uber and Lyft. Uber and Lyft have fought fingerprinting requirements, saying they will not operate in cities that require them (Uber does operate in Houston, which requires the checks).

The vote, it seemed, might have gone in a different direction. Minutes before the final count, Mayor Steve Adler shared news of a potential compromise. 

"We have now an agreement with both Uber and Lyft, as signed by both Uber and Lyft, that we have that says, if we adopt the initiative ordinance that they would enter into contractual relationship with the city," Adler said. 

That agreement would have put in motion Adler’s "Thumbs Up!" badge program, in which passengers would be able to choose between a driver who had undergone a fingerprint-based background check or one who had not. Adler had been working for days to reach a compromise in which Uber and Lyft would agree to a voluntary fingerprinting program and the city would provide incentives for drivers who underwent checks. 

Credit Miguel Gutierrez Jr./KUT

Both companies signed memoranda of understanding Thursday, agreeing to the broad outlines of the program. But it was not enough to convince Adler's colleagues to approve the petition ordinance and pave the way for the voluntary fingerprinting agreement. 

Requiring these background checks is what the Council initially discussed at the end of last year, when Council Member Ann Kitchen alled for fingerprint checks for drivers after allegations of at least seven sexual assaults by ride-hailing drivers last year, saying the expanded checks would make the service safer. There were three alleged assaults by taxi drivers in 2015.

Both Uber and Lyft threatened to leave over regulation requiring the checks.

Last night, the two companies agreed to Adler’s compromise contract, but only if Council accepted the rules written by them and submitted by petition in January. Adler failed to rally these votes. A silence fell over Council when it became clear that his work would go nowhere.

Council Members Sherry Gallo and Ellen Troxclair voted in support of the motion, with remaining council members – save Zimmerman, who abstained – voting in favor of a referendum.

In an email statement following the council vote, an Uber spokesperson wrote: "Tens of thousands of people have made it clear they want to keep ridesharing in Austin. Tonight, the Council missed an opportunity to listen to those voices and prevent a costly election." 

Some council members outright rejected the Mayor's compromise and expressed frustration with the process, saying they felt that a vote to approve the petition ordinance would be giving in to "bully" tactics. 

“We have continually conceded and conceded – I’m not going to use compromise – I’ll say we’ve conceded to this company over and over again," said Council Member Delia Garza, speaking specifically about Uber. "And the history has been they’re not moving.”

The council still has to approve the actual language that will appear on the May ballot. It also has until next week to decide whether to put a competing ordinance – likely one calling for fingerprint checks in some form – up for a vote.