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17
May

Uber and Lyft Leaving Austin

by

Austin texas EveningThere has been a quiet battle raging in Austin when it comes to regulating Uber and Lyft and the rights and regulations of their drivers. The city has been working on a new bill that would place more restrictions on ride-sharing drivers. In essence, they would be treated the same way as cab drivers. They would need to be fingerprinted as part of their background check, which is a trend that has cropped up in many different markets across the country.

Texas has a looser law regarding Lyft and Uber drivers, and that is the law the companies wanted Austinites to choose instead of the tighter city regulation. In order to sway the city their way, they threatened to leave if the new regulations were enacted. After spending a city record $8 million on the ballot — about $200 per voter — they still lost. And so, true to their word, both companies announced they will be “pausing” operations in Austin.

What the Bill Requires

If anyone in Austin wants to become a cab or limo driver, they must undergo a rigorous background check, which includes fingerprinting. Putting rider safety above all, the Austin City Council’s Proposal 1 would require the same level of scrutiny for Lyft and Uber drivers. After all, they are commercial drivers too, and are responsible for their passengers’ lives. Late last year, that proposal was passed by the Council and put up for a city-wide vote.

The ride-sharing companies, on the other hand, say such requirements are not necessary. They argue the proposed background checks are way too expensive — $40 a pop. And with 50,000 Austinites applying to drive for Uber at one time or another, that comes out to millions of dollars, which Uber and Lyft said would be the responsibility of taxpayers to cover. However, the City Council has said those costs would be covered by a 1 percent tax on local ride-sharing revenue.

Similar Cases

In cities around the country, ride-sharing companies have come under scrutiny after drivers like the Kalamazoo Killer made it through their background checks. Cities like San Antonio and Houston attempted to make fingerprinting mandatory, which drove Uber and Lyft out. However, they returned a few months later, once concessions were made. Mainly, the cities made fingerprinting optional.

West Palm Beach, Florida also created their own system for ride-sharing background checks. It made fingerprinting option, but with a twist. They offered the more rigorous background checks at half the regular cost. However, they applied these same rules to cab companies as well, allowing them to conduct their own background checks instead of going through the county’s process. And since Uber uses documents like Social Security cards, proof of insurance and registration as cross-references, they say it’s an intensive enough process.

What’s Next for Austin

With more than 2,000,000 people living in Austin, Uber and Lyft will be missing out on a massive revenue source if they skip out on the city permanently. However, Austin will also lose out on millions of dollars being pumped into the local economy without ride-sharing services. People may not go out as much, especially to bars, and of course there’s the taxes that come along with Uber and Lyft.

As such, it seems that the next step in this process will be negotiating, the same way Houston and San Antonio have. That seems to be the standard modus operandi as instances of these stalemates pop up in more and more cities across the country. Neither party wants to lose out on the business of the other. However, it will likely come down to how these (voluntary) rigorous background checks will be paid for, as Uber and Lyft don’t want to be responsible (either up-front or through taxes) for the massive cost.

How Locals Are Affected

Uber and Lyft have been proven to save lives in the areas they are in. They offer a cheap, quick way for those who would normally drive drunk to get home safely. Without these options, drinkers are left with either trying to get a cab or catching the next Capital Metro train, both of which can be unreliable late at night.

If you have been in a wreck with a drunk driver in Austin, you don’t have to face the situation alone. Call our law offices today. We will review your case and determine how best to get compensation for your injuries. Your first consultation is free.