City Hall grapples with Uber, Lyft departure as new firms eye opening

Uber and Lyft made good on their threat to end Austin service Monday, pulling out two days after voters rejected their $9.1 million bid to overturn the city’s rules for ride-hailing companies.

Their departure came despite offers from Mayor Steve Adler to return to the table to negotiate a compromise. Meanwhile, smaller ride-hailing firms tried to press their newfound advantage.

“If they’re saying the election results mean they had to leave town, maybe they shouldn’t have asked for the election,” said Jason Stanford, Adler’s spokesman.

“The mayor’s been very clear,” Stanford added. “They are welcome to stay, and he invites them to the table, regardless of what they choose to do at this point.”

Lyft and Uber bankrolled the Proposition 1 campaign — to the tune of $9.1 million, according to the latest campaign finance reports released Monday — after fiercely opposing the rules the City Council approved for ride-hailing companies in December. The defeat of Proposition 1 keeps those rules intact, including a requirement that nearly all drivers with ride-hailing apps undergo fingerprint-based background checks by Feb. 1, 2017, instead of using the name-based checks Uber and Lyft prefer.

The city’s ordinance also prohibits drivers from stopping in traffic lanes for passenger drop-offs and pickups, requires “trade dress” — for example, the Uber “U” or the Lyft pink mustache — to identify vehicles for hire, and imposes a variety of data reporting requirements on the ride-hailing companies.

In notices posted on their apps Monday, both Uber and Lyft blamed their pullout on the City Council’s rules, making no mention of the failed ballot measure to overturn them.

“Due to City Council action, Lyft cannot operate in Austin,” Lyft’s statement read. “Contact your City Council member now to tell them you want Lyft back.”

Uber’s statement was similar: “Due to regulations passed by City Council, Uber is no longer available within Austin city limits. We hope to resume operations under modern ridesharing regulations in the near future.”

However, its food delivery service, UberEats, remained in business. And the company emphasized that Uber continues to serve the Central Texas area north of Austin to Georgetown and south of Austin to San Marcos.

Robert Butler, who works for a marketing company in Round Rock, said he received a text message from Uber on Saturday that the company would still operate in Round Rock. He said he uses Uber once or twice a month when he has car trouble.

“I would have voted yes for Proposition 1 if I lived there,” Butler said. “The taxicab companies take longer to arrive and charge more, so that’s why I started using Uber.”

Still, the exit of Lyft and Uber from Austin created an opening for GetMe, a small Texas-born ride-hailing upstart.

“GetMe is seeing an unprecedented spike in driver sign-ups, uploads of the app and transactions on the app,” said Jon Laramy, a company co-founder. “I applaud the city of Austin for standing up for, and listening to, the citizens.”

The service had 350 active drivers in the city as of Friday and another 1,600 in the process of joining up, Laramy added, a number that he expects to grow.

For one newly minted GetMe driver, it was business as usual Monday.

“Today, it’s lighting up like a Christmas tree,” said a former driver with Uber and Lyft who started driving Monday for GetMe.

The driver, who asked that his name not be used because he was not authorized to speak to the media, said he is still making deliveries for UberEats. He said he applied at GetMe some months ago as the other ride-hailing companies’ battle intensified at City Hall.

“I wanted to have an option if this happened,” he said. “This is the only game in town now.”

Laramy said GetMe will gladly comply with Austin’s new fingerprinting requirement, which could actually end up saving money. GetMe pays $65 for each name-based background check it runs on a driver. The city is charging $40 for its fingerprint-based background checks.

The firm has been fingerprinting its drivers in Houston but has yet to begin doing so in Austin.

GetMe isn’t alone in the Austin market. San Francisco-based Wingz is primarily an airport shuttle service but plans to expand its “private car service” in the next month, the company’s CEO said Monday.

Another company called zTrip offers a variety of services, including airport vans, limousines and a Williamson County cab service and also is eyeing quick growth, owner Billy Carter said Monday. A third upstart service, Phoenix-based Fare, told the Statesman it’s interested in Austin.

As the pullout drama unfolded Monday, state Senate Transportation Committee Chairman Robert Nichols, R-Jacksonville, signaled his support for statewide ride-hailing regulations, which could potentially undo fingerprinting rules in Austin and Houston, another city Uber threatened to leave. That followed calls from several suburban tea party Republicans at the Capitol on Sunday for legislation to do just that, which would effectively overturn the Proposition 1 vote.

However, Nichols’ counterpart in the House, Rep. Joe Pickett, D-El Paso, appeared cool to the effort in an interview with the Statesman on Sunday.

Additional material from staff writer Claire Osborn.

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