What does overturn of ride-hailing rules mean for Austin?

3:24 p.m Thursday, May 18, 2017 Politics
Deborah Cannon
Lyft operations manager Mike Kilpatrick, left, and community associate Will Ingram help Caritas Card (not shown) sign up as a driver at the Lyft offices in Austin on Thursday. Lyft is reactivating drivers in Austin as the ride-hailing service waits on the governor to sign the new state ride-hailing legislation into law.

Uber and Lyft are set to return to Austin in the wake of state legislation passed Wednesday that nukes Austin’s ride-hailing regulations, but will Austinites vote with their wallets the way they did in an election last year to make the companies play by local rules?

Austinites who rely on cellphone apps to hail rides have endured a rocky two years of fighting over the city regulations, a failed election to overturn them, brief chaos after the two ride-hailing giants left last May and the ultimate rise of homegrown competitors.

Both Uber and Lyft left the city after refusing to comply with fingerprint-based criminal background checks for drivers, among other city regulations overturned by the Legislature’s newly passed bill. Representatives of both companies indicated they would restart Austin operations as soon as the bill is signed — which Gov. Greg Abbott indicated on Twitter will be “soon.”

RELATED: With Austin rules gone, Lyft drivers set to get back behind the wheel

Kirill Evdakov, co-founder and CEO of Fasten, said that asking whether his company will compete as well against Uber and Lyft is the wrong question.

“The right question is, ‘How will Uber and Lyft win back drivers and customers after leaving them high and dry last year?’” Evdakov said in an emailed statement. “We hope everyone will vote with their dollars for the ride hailing companies that have stepped up and provided safe, affordable and efficient mobility for the last year.”

Andy Tryba, CEO of Austin’s nonprofit ride-hailing service, RideAustin, said the organization would continue to operate under Austin’s current ride-hailing guidelines, including fingerprinting drivers, “because we feel it’s important to continue to honor the wishes of Austin’s voters.”

RideAustin will have to maintain an average pace of at least 20,000 rides per week to keep from shutting down, Tryba said. It currently averages 50,000 to 70,000 rides per week.

Mayor Steve Adler said Thursday, “My biggest disappointment is that the state government chose to override a local vote.”

“That said,” Adler added, “My goal from two years ago was to create a system where fingerprinting would be available in the marketplace so that people would have a material choice. I’m encouraged that some of the folks in the market now have expressed an intent to maintain that. It’ll be interesting to see if that gives them a competitive advantage.”

HOW WE GOT HERE: An interactive timeline on Austin’s ride-hailing election

The state bill leaves a gap between standards that apply to ride-hail operators and standards that apply to taxi cab companies, which are still subject to various city regulations.

Among other requirements, Austin taxi drivers still must undergo fingerprint-based background checks, and drivers are disqualified if they have ever been convicted of homicide, sexual assault, kidnapping or other serious crimes. State regulations will allow Lyft and Uber to instead use the name- and document-based background checks they prefer, and the only drivers who would be disqualified are registered sex offenders or people who have been convicted of certain crimes within the past seven years.

City transportation staff members refused to answer questions Thursday about what the bill, once signed, will mean for the city, including what Austin’s role will be in collecting ride-hailing data and how much revenue the city will lose from fees it previously charged for permits.

Adler said Austin will change its ride-hailing ordinance to conform to state law — though it will be overruled by state law — to eliminate confusion. He would also support looking at possible changes to city taxi regulations, but said it was too soon to tell which regulations the council might support eliminating.

“The intent was to treat everyone the same, but I don’t know,” he said. “I haven’t had any conversations about that.”

The state legislation still allows airports to regulate and permit drivers for ride-hailing services, and Austin-Bergstrom International Airport will continue to do so, spokesman Jim Halbrook said, though the airport will evaluate its requirements and fees. Once Abbott signs the bill, the airport will issue permits to any ride-hailing firms that receive valid state permits, he said.

RELATED: Adler open-minded, cab company skeptical about deregulation pitch

Adler noted that the city in general has been moving towards partially deregulating the taxi industry in the city. A staff memo last year suggested the city remove restrictions on the number of cabs and regulation of their fares, but still mandate the fingerprint-based background checks that Uber and Lyft fought against.

Ron Means, general manager of Austin Cab, shrugged off the Legislature’s actions on ride-hailing companies, saying it’s beyond his control and he considers ride-hailing companies different from taxis anyway. His only wish was that the Legislature would have taken a statewide ax to local taxi regulations, too, he said.

Means decried Austin’s regulations on things like how many taxis each company can operate. But he doesn’t support deregulation of fares, which he said would lead to chaos.

“Right now we have very peaceful operations, cab drivers not jumping out, shooting each other, hassling customers,” he said. “Do they want a fare war?”

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