After a debate lasting more than four hours, the Austin City Council early Friday approved an ordinance overhauling its rules for companies that dispatch rides using smartphones.
That new law includes a mandate that all drivers for transportation network companies undergo fingerprint-based criminal background checks. The council approved it 9-2, with Council Members Ellen Troxclair and Don Zimmerman opposed.
But that requirement will be phased in, and the ordinance was as notable for what is left unresolved as for what it put into the city code. Also left up in the air, at least for now, is what industry leaders Uber and Lyft will do in reaction to the council’s action.
Here’s what you need to know about the new ride-hailing law:
Will fingerprint checks for such drivers be mandatory or voluntary?
The ordinance said a prospective ride-hailing service driver “must” pass that check to become “compliant” with city law, and, by Feb. 1, 2017, 99 percent of the miles or hours driven through each company must be done by a compliant driver. But in a press conference Friday, Mayor Steve Adler cautioned that the ordinance’s language is “incomplete.”
“There is nothing in here that says TNCs (transportation network companies) need to comply with fingerprinting or they can’t operate in the city,” Adler said. “So does that mean that it’s optional? Does that mean it’s mandatory? I’d say it’s incomplete.”
What happens next?
The ordinance doesn’t take effect until Feb. 1, about six weeks from now. But the requirement on driver-miles or driver-hours (not the number of drivers for a company, as the ordinance originally read) ramps up in four segments. By May 1, 25 percent of those miles or hours must be from fingerprinted drivers, then 50 percent by Aug. 1, 85 percent by Dec. 1 and then the 99 percent level two months after that.
What if the companies don’t meet those benchmarks?
That is one of the unresolved issues. The ordinance says the council “will establish by separate ordinance programs, processes and procedures to incentivize drivers to become compliant.” Council members said Thursday this could include both carrots — such as higher fares for fingerprinted drivers and better drop-off and pick-up locations at such big events as the Austin City Limits Music Festival — and sticks of a still-to-be-determined nature. Without those in place, the ordinance passed Friday essentially lacks teeth. Adler and Council Member Ann Kitchen said they hope to bring a proposal outlining incentives to the council by late January, just before the ordinance passed this week goes into effect.
What else remains to be done, perhaps in that ordinance still to come?
A whole lot. The council hasn’t listed in the code what sort of criminal offenses would disqualify a potential driver, or what the relevant time frame is for those convictions. Such a list does exist in city law for taxi, limo and shuttle drivers, and Uber and Lyft have their own lists, based on the background checks they currently run using drivers’ names, date of birth and other identifying information to search public records databases. Beyond that, the city code allows people convicted of many offenses to become taxi drivers if they have served their sentence and been a good citizen since getting out. The ride-hailing companies have no such forgiveness element in their policies.
And there’s more?
Yes. The council, in an earlier draft of the ordinance passed Friday, required that drivers’ cars pass a 20-point city safety inspection in addition to a regular state inspection. That provision was changed this week to a placeholder, so the ordinance to come in January will have to resolve that as well.
Are Uber and Lyft leaving because of these requirements? They sent strong signals beforehand that they wouldn’t stay if fingerprint checks were required.
Possibly. A Lyft spokeswoman, shortly after the vote about 1 a.m. Friday, sent an email saying “Lyft will operate in Austin until mandatory fingerprint requirements force us to leave. In the meantime, we will remain at the table in an effort to create a workable ordinance and preserve the benefits ridesharing brings to visitors and residents. We do not operate in cities that require mandatory fingerprint background checks.”
Uber officials didn’t immediately react to the vote. That company remained in Houston even after that city in August 2014 mandated fingerprint-based background checks (Lyft left Houston). And while Uber representatives have said recruiting a sufficient number of drivers there is hard, resulting in slower response times, the company had at least 4,000 drivers in Houston as of May. And, according to a Houston regulator who testified at the Austin council meeting Thursday, Uber has said it expects to add 5,000 more Houston drivers next year.
Uber, on the other hand, joined Lyft in quitting San Antonio earlier this year when fingerprint checks were mandated (both came back this fall when fingerprint checks became voluntary).
Rentals: No more ‘testing the waters’
The City Council postponed action Thursday on tougher regulations for short-term rentals, with one exception: It removed the “testing the water” provision in city code, which had let owners advertise a property for rent without having the proper license.
The original goal was to allow owners to gauge potential interest in the property before deciding whether to go through the licensing process. But officials say some owners used the provision as a loophole to rent properties without the necessary approvals.
Still left to be voted on next year: requiring a guest registry, occupancy limits and phasing out existing year-round short-term rentals, known as Type 2, by April 2022.