Austin sting targets service looking to fill ride-hailing void

The city of Austin is using sting operations to crack down on drivers working for unlicensed ride-hailing companies, issue fines and seize cars, authorities told the American-Statesman on Tuesday.

The cars of four drivers for Arcade City, a peer-to-peer service that connects passengers with drivers through its Facebook page, were impounded Friday after the city’s Transportation Department conducted a sting.

Arcade City driver Cheri Hawes said she plans to contest the ticket on her scheduled court date next month and added that many Arcade City drivers will be by her side when she does.

“I was very upset,” said Hawes, whose car was impounded Friday. “I told (the officers) this is my only income. I have two daughters. I can’t afford a citation. I worked for Uber and Lyft before, and I didn’t expect them to leave. And (the officers) just said, ‘It’s the law.’ ”

This sting comes as the Austin City Council prepares to consider Thursday a proposed ordinance to fine ride-hailing companies if they’re not following the city’s new regulations, which were passed in December.

Transportation Department officials said they will continue to enforce city code, which makes driving for an unlicensed ground transportation company a crime. Hawes was cited for operating without valid operating authority and operating without a valid city chauffeur permit.

“We do routine enforcement,” said Cheyenne Krause, a spokeswoman for the Transportation Department. “We did it before this weekend, and we will do it in the future. We won’t discuss specifics of when, where, how or against who, but we routinely do this.”

The Transportation Department recommended that Arcade City drivers turn to licensed ride-hailing companies.

“We highly encourage users to look for services that fully vet their drivers and have mechanisms in place to ensure the safety of both the riders and the drivers,” Krause said.

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On Friday evening, a man posted a message on Arcade City’s Facebook page, saying he and a friend needed a ride from the University of Texas area into downtown. Hawes was the first to respond to the post, and she said she could pick them up in 10 minutes.

After driving them to their destination, she said the ride would cost $15, and they gave her a $20 bill, Hawes said. Two police cars pulled her over as she started to drive away.

“One guy identified himself as a detective, and the other guy was an officer,” Hawes said. “He asked if I had a chauffeur’s license, and I said no. He asked for the money back, and that’s when he informed me it was an undercover sting.”

Arcade City founder Christopher David disputes that his group is breaking any laws. The drivers on the Facebook group don’t pay Arcade City any money, he said. The Facebook group is currently serving as a way to get Arcade City’s name out there, and the company won’t make money in Austin until the Arcade City app launches in a couple of weeks, David said.

“The city is treating us like we’re a transportation network company, but we’re not,” David said. “We’re structured like Craigslist.”

However, if drivers are charging more than 54 cents a mile, those companies are subject to regulation and must be licensed, city officials said.

“Does (the city of Austin) have nothing better to do with their time and with Austin’s taxpayer dollars than set up a sting operation, punish drivers and impound their cars?” David said. “These are people who are trying to clean up the mess that the city, by and large, is responsible for.”

David said Arcade City put out a call for its drivers netted in the sting to come forward so Arcade City can reimburse them for their towing and citation expenses, but no one has come forward, he said.

Hawes paid $220 to retrieve her car from the impound lot, and she said the citations will cost her up to $400.

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