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Austin City Council gives green light to ridesharing services

After weeks of debate during the height of campaign season, ridesharing companies Uber and Lyft got the green light from the Austin City Council to operate legally in Austin.

The ordinance allows Uber and Lyft drivers to operate temporarily, starting in 30 days, while permanent rules are drawn up. The final measure, which was amended Thursday to eliminate an insurance requirement the ridesharing companies had opposed, passed 6-1, with Council Member Laura Morrison voting against it.

Uber and Lyft work by connecting drivers and passengers through a smartphone application. The companies have been operating illegally for months in Austin, with some of their drivers getting cited and their cars impounded.

Taxi companies had opposed this effort to legalize ridesharing companies, saying it wasn’t fair to let them skirt the regulations taxis adhere to, which are designed to protect consumers.

The discussion Thursday, which spanned three hours, revolved around such details as commercial insurance requirements, background checks and surge pricing, which charges passengers more during high-demand times.

In the end, the main amendments approved by the council give the city approval over background checks conducted by ridesharing companies and don’t require commercial insurance to be in effect when no passengers are being carried. An attempt to cap surge pricing failed.

But the final vote was perhaps more interesting in what it said about the influence of money, or lack thereof, in city politics.

Over the last three years, taxi drivers, shuttle service providers and top executives at cab companies have plowed nearly $54,000 into the campaigns of City Council members.

In this election cycle, cab company executives bundled at least $18,500 in donations to the mayoral campaign of Council Member Mike Martinez, and taxi cab employees, spouses and attorneys contributed nearly $5,000 to Council Member Kathie Tovo. Tovo is running for re-election in the newly created District 9 in Central Austin against Council Member Chris Riley, the main sponsor of the ordinance legalizing Uber and Lyft.

How much have Uber and Lyft donated? Nothing.

They have hired several lobbyists, including Jed Buie, Adam Goldman and Craig Chick. But Uber and Lyft say their success stems from their army of supporters — and a well-rehearsed strategy of harnessing that army.

Those strategies include engineering an onslaught of pro-ridesharing emails to council members, holding rallies in front of council meetings with dozens of drivers, and regularly touting their services’ popularity.

“We, in many ways, have the power of the people on our side,” said Uber spokeswoman Jennifer Mullin. “We have this kind of engaged, active constituency that any political campaign would be excited about.”

But Ed Kargbo, president of Yellow Cab Austin, sees the “power of the people” approach differently.

“I don’t know how effective that is or isn’t,” he said. During the council’s public hearing on this issue last month, dozens of taxi drivers showed up to testify or watch the proceedings. But on subsequent hearings their numbers dwindled.

Uber and Lyft are trying to “bully council members with that strategy,” Kargbo said.

Taxi companies weren’t winless in the debate, said city lobbyist and former campaign consultant Mark Littlefield. The fact that the debate dragged on for weeks, with taxi companies occasionally scoring points through amendments, indicates the power of the relationship they have built over the years with council members, he said.

Still, in just six months, Uber and Lyft produced an army of Austin fans and users that overpowered the taxi industry. Tovo and Martinez, who had received campaign donations this election cycle from the taxi industry, ultimately voted to legalize the ridesharing services, though both supported amendments imposing some of the regulations that the taxi companies sought.

Both insisted that money played no part in their decision-making.

Tovo noted she has also supported measures in the past that taxi franchises opposed, but that benefited taxi drivers. “(The money) doesn’t influence me at all,” Tovo said. “I would say that’s true of all my campaign donations.”

Martinez, who co-sponsored the resolution legalizing Uber and Lyft, said, “There is no quid pro quo for any contributions.”

Though Uber and Lyft can now operate legally in Austin, the debate is far from over.

The city is awaiting recommendations from several working groups on how to permanently legalize ridesharing companies while also weighing the interest of taxi drivers. The council is expected to revisit the issue next month.

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