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Maybe the state should regulate Uber and Lyft after all

Texas Monthly reviews the current state of affairs with transportation network companies (TNCs) like Uber and Lyft and their fight against mandatory fingerprinting as part of the background checks that new drivers must ondergo, all of which is playing out in Austin right now.

Uber

The argument in favor of the [fingerptint] provision is simple: Lyft and Uber drivers are taking people into their cars, often times taking them to where they live. That’s presented very real safety problems in other cities, particularly for women. As of last November, seven cases involving Uber drivers and sexual assault were being investigated in Austin. (No arrests have been made, which isn’t uncommon in such cases.) Anything that the city can do to guarantee that the people accepting passengers into their cars are vetted and safe makes sense.

Lyft and Uber don’t seem to see it that way, though. An incident in Dallas in which an Uber driver was arrested for rape left the company insisting that its current background checks were sufficient, and that the problem was on the city’s end of the approval process. And if fingerprinting is part of the process in Austin going forward, both companies warn that they won’t be offering rides there anymore.

There are reasons to be suspicious of fingerprinting, of course. The Austin NAACP and the Austin Urban League co-authored a letter to Austin City Council explaining the potential unintended consequences: That fingerprint-based background checks can be discriminatory in that they can flag people who’ve been arrested but never prosecuted or convicted, which is a group that disproportionately includes minority drivers.

But it’s unlikely that Uber and Lyft have suddenly decided to take on fingerprinting as a civil rights issue. Rather, it’s probably the companies protecting a win-win situation for (almost) everyone. Uber and Lyft don’t pay for the car, insurance, or gas used in providing rides, so there only value for the driver is that it’s easy to get started and make money. Most of what they can offer to passengers, meanwhile, is that there are a lot of drivers on the road that they can access through the service. The current situation, in other words, is good for everybody—except those who’d like to see more stringent regulations on who shows up when you request a ride.

Lyft

The ordinance’s critics point to other aspects of the new regulatory process for drivers, too. A post on Medium from an Austin Lyft driver outlines the “Procedural hassles” involved: They include a six-step process of signing up, ensuring that your vehicle complies with inspection requirements, scheduling an additional inspection, adding a sticker to your windshield that affirms that you’re a verified driver, meeting a representative from the company that you’re working with, and getting fingerprinted—a process that the driver says could take up to a week. That certainly is more complicated than the current system, which can mostly be done from a phone, but it’d be hard to describe it as an onerous burden—most jobs require some amount of paperwork, after all, and there’s usually a delay between beginning the application process and starting work.

The threat that Uber and Lyft might leave Austin is significant, and whether their reasons for wanting the ordinance to change are “it doesn’t increase passenger safety, it just discriminates against certain kinds of drivers” or “We just don’t want to deal with any additional regulation,” it puts people such as the bar owners at Wednesday’s press conference in a tough spot: Those companies have changed their businesses in ways that have helped reduce one of the biggest problems their customers face—getting on unsafe roads—and losing that would be a real blow. Whether Uber and Lyft are right or wrong to threaten to leave, Austin needs them.

Still, it doesn’t seem that this situation is particularly unique. Fingerprinting is the major restriction that the companies seem to take issue with, but it’s hardly the first thing that’s led them to threaten to take their ball and go home. Lyft pulled out of Kansas City in April after the city required either the company’s drivers to pay a fee to be licensed, or the company to pay a $45,000 annual fee; both companies said they would  leave Hawaii over insurance regulations; both warned that they would pull out of Salt Lake City over proposed background checks and inspections in November 2014; both threatened to pull out of Minnesota in March over a proposed insurance requirement; fingerprints were again the bone of contention in Broward County, Florida in April; and a $62 background check that involved fingerprinting in Houston led Lyft to make good on its promise to leave (Uber still offers services). Both companies left San Antonio, briefly, until the city backed down on its requirements.

See here and here for the background. I favor the fingerprint requirements. It’s not in Uber and Lyft’s business model to be overly strict about who they contract with. Having cities perform these checks adds a layer of security that wouldn’t be there otherwise. The concerns about discrimination are legitimate, but they can be dealt with by doing a risk assessment on the candidates who are in the system, to filter out the people who really aren’t a threat to anyone. The current setup has allowed Uber and Lyft to play cities against each other and put pressure on individual Council members, in order to get the most lenient deal they can. In Austin, they are now going the referendum route to undo what Austin City Council has done. The varying rules for TNC regulation, plus the lack of permitting in unincorporated suburban areas, suggest that regulation at the state level could well come up again, and as the Quorum Report notes, that could ultimately work in favor of the fingerprinting advocates.

As the City of Austin prepares to tweak its ordinance governing ridesharing companies like Uber and Lyft, one key senator continues to work with the companies in hopes of passing statewide rules that would supersede local ordinances like Austin’s in the next legislative session.

Sen. Robert Nichols, R-Jacksonville, chairs the Senate Transportation Committee and was ready last session to shepherd through the upper chamber a bill to regulate the companies. But House Bill 2440 – which in its final version did not require drivers to be fingerprinted – never made it onto the Texas House calendar. The issue was a high-priority for some in the lobby, more than three dozen of whom were set to earn up to $1 million fighting for or against the bill.

“I want it to work, and I want to help them,” Nichols said in a phone interview with Quorum Report. “As long as we’ve got fingerprinting in there, I think we could sell it.”

Interesting, and not what I expected. I don’t know if a statewide TNC bill that included fingerprinting would have a better chance than the bill from last session that didn’t, but having Sen. Nichols on board with the idea is a big deal. We’ll keep an eye on it.

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2 Comments

  1. Joshua ben bullard says:

    Its not limited to local municipality anymore,Austin like all other cities has huge business enterprises traveling in and out of its city,shell,waste management, Exxon,etc etc ,they have switched to the uber platform,even if uber withdraws,it wouldn’t be long before the powers that be tell the city to bring it back and in San Antonio’s case,uber came back more on their terms.how will Austin explain to the business folks “we know you were paying 14$ with uber but you know what,your back to paying 32$ with the taxi”.. It sounds good in theory,but as a practical application ,I cannot see a path to victory.

  2. Christopher Knight says:

    There is one path being explored. That of regulation of rates. Or at least a floor and ceiling. Currently a PETITION is circulating in Houston to put on the ballot amendments to Chapter 46 of the city charter. Given the success of the petition signature gathering by a PAC in Austin the same could be repeated in Houston but on the subject of regulating rates for TNCs. At the January 12th Council meeting during public comme ents/speaking (20 minutes in) a TNC Licensee went before council and asked for rates to be regulated. And a dozen or more TNC Licensees in attendance were in agreement.