Austin council supports cab co-op, efforts to help ride-hail companies

Legislating in the considerable shadow and jumbled aftermath of Proposition 1’s defeat, the Austin City Council officially urged its staff Thursday to aid the smaller ride-hailing companies attempting to fill the gap left by the departure of Uber and Lyft.

On an 8-2 vote — with Council Members Ellen Troxclair and Don Zimmerman in opposition and Council Member Greg Casar absent — the council approved a resolution asking the city manager to “identify revenue-neutral city resources and process or policy efforts” to resuscitate a ride-hailing industry thrown into disarray.

WATCH: What the outcome of the Prop 1 vote means for Austin, ride-hailing companies and their customers

And the council made an initial move toward fulfilling a long-held dream of Austin cabbies: a driver-run co-op cab company. On a unanimous vote, the council gave first-reading approval to a franchise agreement with newly created ATX Coop Taxi. The council would have to vote two more times to make that approval final.

The council voted unanimously to remove a cap of 150 permits for drivers at the co-op, which has requested 548 permits. The three existing cab companies have just over 900 permits combined, but could petition for more. Yellow Cab, which has about two-thirds of those permits, gave the council a letter expressing “concerns” about the co-op franchise.

“Flooding the streets and airports with taxis is not the answer for providing good citywide taxi service,” said the letter from Steve Harter, owner of Yellow Cab Austin’s parent company.

Other changes are brewing. Robert Spillar, the city’s transportation director, last week recommended partial deregulation of Austin’s taxi industry. The shape of that change remains to be defined, but it could involve eliminating taxi franchise agreements in lieu of putting taxi and ride-hailing companies on the same regulatory footing.

But the ride-hailing industry, too, is in an uncertain state in Austin.

Ride-hailing companies FARE (which hasn’t yet been approved to operate in Austin) and GetMe have been quickly recruiting and screening thousands of drivers left idle after Uber and Lyft ceased their Austin operations May 9. Those established ride-hailing companies attempted through Prop 1 to replace a city ordinance passed in December with one to their liking. But 55.7 percent of voters on May 7 said no.

WATCH: What this Austin cabby has to say about getting fingerprinted

Both GetMe and FARE have said they will comply with the city’s ordinance, which was left intact by the defeat of Prop 1. That law requires ride-hailing companies to have half of their drivers fingerprinted for background checks by Aug. 1 and 99 percent of them by Feb. 1, 2017. But over the past two weeks GetMe has been doing Uber- and Lyft-style name-based checks in an attempt to get drivers quickly on the street.

The resolution passed Thursday suggests some existing city programs, such as microloans and business development assistance, could help the smaller ride-for-hire companies grow to meet Austin’s demand.

Troxclair and Zimmerman, who supported Prop 1, said the city — after, in their view, pushing Uber and Lyft out of town by requiring fingerprinting — are now willing to overlook a lack of fingerprinting by GetMe and others. And then offering to help those companies.

“If you agree to whatever the city government tells you to do, you’ll get a subsidy,” Zimmerman said.

Troxclair proposed an amendment withholding city assistance from any ride-hailing company that doesn’t comply with the fingerprint requirement.

Mayor Steve Adler, who presides over council meetings, ruled that Troxclair’s amendment wasn’t “germane” to the resolution. A Zimmerman appeal of his ruling was voted down 8-2.

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