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House passes statewide rideshare bill

Made it farther than it did last session.

Rep. Chris Paddie

After a lengthy debate among lawmakers over the best way to regulate services like Uber and Lyft, the Texas House backed a proposal that would override local regulations concerning ride-hailing companies.

House Bill 100, by state Rep. Chris Paddie, R-Marshall, would establish a statewide framework to regulate ride-hailing companies and undo local rules that the two companies have argued are overly burdensome for their business models. Cities enacting such rules say those regulations bring a needed layer of security.

As of mid-morning Wednesday, 79 members in the 150-member House — including Paddie — had signed on to the bill as authors or co-authors.

“HB 100 is not about a particular company or any particular city,” Paddie said Wednesday on the House floor. “Statewide regulations for transportation network companies have become the best practice across the country.”

His bill was tentatively approved by the lower chamber in a 110-37 vote after representatives tacked on several amendments, including one that seeks to define “sex.” The measure needs final approval from the House before it could be considered in the Senate.

At times, the debate over the bill appeared to veer into one of the most contentious topics this session at the Capitol: gender identity. In the Senate, Lt. Gov. Dan Patrick has prioritized a “bathroom bill” that would require transgender people to use the restroom in some places that matches their “biological sex.”

On Wednesday, state Rep. Tony Tinderholt, R-Arlington, successfully amended the ride-hailing bill to define “sex” as the “physical condition of being male or female.” The amendment, which passed 90-52, drew some concern from Democrats, who questioned whether it was a way to exclude a certain group.

“I can assure you that it is not my intent,” Paddie said, adding that he accepted the amendment because he views it as “further defining something that’s already defined.”

HB 100 would require ride-hailing companies to have a permit from the Texas Department of Licensing and Regulation and pay an annual fee to operate throughout the state. It also calls for companies to perform local, state and national criminal background checks on drivers annually — which would override an Austin ordinance.

See here for the background. Two related Senate bills were heard in committee, with SB361 by Sen. Nichols getting passed out. I don’t know what to make of the “biological sex” amendment beyond the continued obsession of certain zealots. What’s more important is what do Uber and Lyft, who have been pushing hard for a statewide rideshare bill, think of it?

Well, Uber and Lyft? What do you say? Those of you who use Uber and Lyft, what do you want them to say about this? I would recommend you tell them. Maybe this will get stripped out going forward, but that almost certainly won’t happen without some pressure. Now is the time to bring it. And kudos to the members who pulled their support for this bill in response to the needless amendment.

The Chron adds some details.

The bill would give oversight of companies that connect willing drivers and interested riders via smart phone to the Texas Department of Licensing and Regulation. The companies that operate the smart phone app and process payments between the riders and drivers would pay a $5,000 annual licensing fee, and certify that its drivers meet a number of requirements already common among the companies.

Uber and Lyft have aggressively sought state rules in Texas because of their opposition to city requirements, notably Austin and Houston. In Austin, both companies left the city after new rules that included fingerprint background checks went into effect nearly one year ago.


As with the contentious fights at the local level, discussion also focused on requiring the fingerprinting of drivers. The companies vigorously oppose fingerprint background checks, favoring their background checks based on Social Security numbers.

Numerous attempts to require fingerprint checks or allow cities to require them failed as amendments to Paddie’s bill.

“We should not take chances with any life,” said Rep. Yvonne Davis, D-Dallas, noting many professions in Texas are subject to the fingerprint background check.

Paddie deflected the requests for fingerprints and efforts to allow cities to require more strenuous permitting, noting fingerprints can’t predict future behavior.

“We have 150 teachers in this state under investigation for improper relationships with students,” Paddie said.

Seems like you could use that reasoning to justify a lot of things, but whatever. I feel like one way or the other, something is going to pass. As I’ve said, I’ve basically resigned myself to that, but I still don’t approve of the assault on local control. I hope this winds up being the outer edge of that assault, but I’m less than optimistic about that. The DMN has more.

Uber wants back in Austin

It’s how they get back that’s the question.


The ride-hailing company Uber may return to the state’s capital despite leaving Austin in May after a bruising fight with the city over regulation of the industry, according to Trevor Theunissen, the company’s public affairs lead.

“We are willing to negotiate, and we are willing to participate [with the city council] in a discussion on how to move forward. We want to come back here,” Theunissen said at an Austin event Thursday night.


Theunissen said that since leaving, Uber associates have been on “listening tours” throughout the city to address the concerns of the community. However, he said he hopes the company can return to Austin in the near future.

“We want to be back in Austin and I think it’s a city Uber needs to be in,” said Theunissen. “I’m hopeful that there is a path forward, but there’s a lot of work to do. I’m hoping to get back to the city before the [legislative] session or after the session.”

But former Austin City Council member Laura Morrison said Uber needs to use fingerprint background checks in vetting their drivers if they want to operate in Austin. Speaking on behalf of Our City, Our Safety, Our Choice, Morrison also said that the alternate background check methods Uber uses “are prone to critical errors.”

“Certainly, Uber is welcome to re-enter the Austin market if they are willing to operate under these rules, which all our other ride-hailing services abide by,” said Morrison. “It’s the law here, a law that the council enacted and a public safety standard that the people of Austin support. Uber operates in Houston and New York City and both require fingerprint background checks for Uber’s drivers. It’s a fair question to ask: Why does Uber think that Austinites should be subject to a lower public safety standard?”

In a statement sent to The Texas Tribune before the event, a spokesman for Austin Mayor Steve Adler said both companies would be welcome back to Austin “with open arms.” He added that there’s nothing stopping either company from returning.

“The mayor has always said that there is nothing in the ordinance preventing Uber and Lyft from choosing to return to Austin where they would be welcomed with open arms,” said Jason Stanford, the communications director for Adler’s office. “In the meantime, he’s also always said that he would be happy to sit down with them to work this out but will not comment on whether these conversations exist to create a safe space in which they could occur.”

There are a couple of ways to look at this. It seems likely that a statewide ridesharing bill will be passed, which will undo the requirement for fingerprint checks that Uber found to be line-in-the-sand-worthy in Austin and to an as-yet-unexecuted extent in Houston. Viewed in that light, this may be simply the initial overtures of someone trying to get back into the good graces of an ex after a breakup. But such overtures necessarily come with a helping of regret over past actions, and I think Uber really does regret leaving Austin; I think one reason why it never did follow through on its threat to pull out of Houston was because of that regret. Austin is a perfect market for Uber, but when they do come back, whether via legislative fiat or mutual agreement with Austin’s City Council, they will face a lot more competition than they had before. It may well be that they will sweep in an reclaim a dominant position in the Austin rideshare scene, but for the past six months their customers have learned to live without them, and some of them will carry a grudge over it. One way or the other, however they get back (and they will), it won’t quite be the same.

Rideshare companies in Austin are complying with its fingerprint requirements

Well, what do you know?


All eight of the ride-hailing companies operating in Austin met a city requirement to have at least half of the rides they provided in July come from drivers who passed fingerprint-based background checks, according to a city memo released this week.

Achieving that Aug. 1 benchmark — the first major regulatory milestone since the Proposition 1 election in May — shows how quickly the smaller competitors built their networks of drivers, even with the fingerprinting checks and other requirements that prompted Uber and Lyft to leave Austin.

Taken as a group, the smaller companies provided more than 350,000 trips in July, almost 11,300 a day, during what would normally be a slack period because enrollment is light at area colleges during the summer.



The city since January has received 3,771 fingerprint-based, criminal background reports on potential ride-hailing service drivers, according to the memo from Austin Transportation Department Director Robert Spillar to the Austin City Council.

All of those, including those whose checks occurred earlier in the year, were vetted against a list of disqualifying criminal offenses set out in a June 2016 ordinance, Austin Transportation Department spokeswoman Cheyenne Krause said. Of those applicants, 86 were rejected for failing their background checks.

The companies, most of which still have some drivers working for them who haven’t been fingerprinted, reported having 8,985 drivers. However, the memo says, individual drivers might be counted two times or more in that total because many of them work for more than one of the eight companies: Fare, Fasten, GetMe, InstaRyde, RideAustin, Tride, Wingz and Z-Trip.

The companies, by city ordinance, had to by Aug. 1 have at least 50 percent of their rides for the preceding month provided by a city rules-compliant driver, either as a percentage of hours driven or miles driven. According to the memo, using information supplied by the companies, Wingz and Z-Trip were at 100 percent. RideAustin was next, at 89 percent, followed in order by InstaRyde (86 percent), Tride (73 percent), Fare (69 percent), Fasten (58 percent) and GetMe (55 percent).

It gets harder from here – by next February, 99% of hours driven or miles driven must be provided by compliant drivers. I suspect the city may wind up being a bit lenient on that, if the companies lag and it makes sense for them to do so, but we’ll see. Point is, the companies that are in Austin post-Prop 1 have cleared the first hurdle. Was that so hard? You tell me.

Driverless Ubers

Ready or not, here they come.


The option to hail a ride in a self-driving car, which was science fiction just a few years ago, will soon be available to Uber users in Pittsburgh, the first time the technology has been offered to the general public.

Within weeks, the company announced Thursday, customers will be able to opt into a test program and summon an autonomous Ford Fusion. But since the technology has not been perfected, the cars will come with human backup drivers to handle any unexpected situations.

Although other companies including Google are testing self-driving cars on public roads, none offers rides to regular people. As an enticement, the autonomous rides will be free, the company said.

Uber, which has a self-driving research lab in Pittsburgh, has no immediate plans to deploy autonomous cars in other cities. But in an interview with The Associated Press, CEO Travis Kalanick said development of the vehicles is paramount for the San Francisco company, which has grown exponentially after starting seven years ago.

“We’ve got to be laser-focused on getting this to market, because it’s not a side project for us,” he said. “This is everything. This is all the marbles for Uber.”

Without drivers, the cost of hailing a ride will be cheaper than owning a car, changing the way we all get around, Kalanick has said.

By using human backup drivers, Uber is basically testing the technology and taking people along for the ride, said Bryant Walker Smith, a University of South Carolina professor who studies self-driving technology.

“Part of this is marketing in the sense that they’re going to be doing continued research and development of these systems,” he said.

The story notes that Uber has acquired Otto, the startup company that provided kits for driverless trucks. As you know, I remain skeptical, not of driverless cars themselves – I have no doubt the technology is coming, probably sooner than I’m comfortable with – but of the grand predictions of how they will reshape society. I think the questions are more complicated, and the time frame is longer, than some people think. But who knows? I’m sure the lure of free rides will give Uber plenty of demand for this test, and there will be much to learn from it. I’ll be very interested to see how it goes. And hey, driverless Ubers sure would solve that pesky background check issue, elsewhere. The Wall Street Journal, Kevin Drum, the Guardian, and the Chron’s Chris Tomlinson have more.

El Paso revises its rideshare rules

Uber gets its preferred regimen.


The El Paso City Council approved an ordinance designed to ease regulations and fees on taxis and ride-sharing companies like Uber.

Amendments to the Transportation for Hire Ordinance, which Council approved unanimously on Tuesday, requires all businesses have an operating authority permit and drivers pass a background check. It will also do away with 26 fees and cut costs up to 95 percent.


Other loosened regulations include no longer requiring drivers to have a medical certification and outdated two-way radios. City vehicle inspections will be eliminated and driver and vehicle permits will not be required. The age limit on vehicles has also been removed.

The newly-passed ordinance also requires companies to provide wheelchair-accessible vehicles upon request. That means Uber would have to have an agreement with a cab company to pick up a client if they did not have a vehicle available.

See here for a preview of the vote, and this story from May about the direction El Paso took in redoing its rules. They basically took the approach of easing or removing regulations that had been in place for traditional cab companies rather than retrofitting existing rules to Uber. And yes, that means no fingerprint requirements, which as you can see from that first story is not what the cab companies wanted. As is their way, Uber had threatened to leave El Paso if the rules weren’t changed; their triumphant press release following this action congratulates them for becoming “the 13th Texas city to adopt modern ridesharings rules”. One presumes Lyft has an interest in this as well, but as of today they don’t operate in El Paso, so we’ll see if that changes.

Fort Worth adopts minimalist rideshare regulations

This ought to be interesting.


Months of work redrafting the city’s vehicle-for-hire ordinance wrapped up Tuesday night when the Fort Worth Council approved new rules that require transportation companies only to register with the city.

The approach chosen by Fort Worth avoids more onerous regulations — including requirements for fingerprinting drivers — that proved problematic in other cities. And it gives Uber, Lyft and others the hands-off regulatory environment they had pleaded for in the city.

The City Council long ago began exploring how to cover the fledgling industry with an ordinance, only to realize months into the process that it didn’t want to regulate the transportation companies, saying smartphone app-based ride share companies had changed the business landscape.

Council members opted for free-enterprise and competition despite a last-minute plea from the traditional taxicab companies that wanted the city to continue to regulate their industry. Taxicabs have always been regulated, they said, and that’s what the public expects.

Jack Bewley, president of Yellow Cab, said the proposed ordinance did not ensure safety for the passengers. He warned the council the city could see an influx of one-man cab companies with owners who have criminal backgrounds and can’t get insurance.

“This ordinance is being set up where an individual … can come down here and say I want to start a taxicab company,” Bewley said.


The council voted 8-0 to approve the new ordinance. Councilman Jungus Jordan was absent.

Mayor Pro Tem Sal Espino said the ordinance meets market innovation.

“Council, in articulating its vision for the regulatory framework, decided the best way is the free-market approach. At this point in time, in the evolution of the ride-sharing services and the transportation services, this is just another option. After much debate, after much discussion, we’re ready to move forward.”

Mayor Betsy Price said, “We just must embrace all forms of transportation to avoid gridlock in our city and allow our citizens to get around. Part of our job is to not cause undue burden on businesses or citizens. Unlike other cities that have gotten so hung up in the hot potato politics of this, Fort Worth is going to do it the right way.”


Under the new ordinance, which takes effect Oct. 1, companies, whether motorized or non-motorized, will pay a $500 operating license fee that’s good for two years. The companies will be required to annually certify that they have done national background checks on their drivers, that their drivers hold valid driver’s licenses and that drivers and vehicles are properly insured.

The ordinance does come with a strict penalty if the company is found not to be in compliance — it will lose their operating license for two years. Passengers can file complaints with the city.

Well, that’s one way to do it. I sent an inquiry to Uber about how Fort Worth’s ordinance differs from those in San Antonio and Dallas, and I was informed that while Uber’s screening process is the only mandatory background check for those cities, San Antonio offers drivers an opportunity to voluntarily undergo a fingerprint background check, and drivers in Dallas are required to obtain a City permit. The only additional step drivers are required to complete to obtain that permit is undergoing an additional vehicle inspection.

It will be interesting to see what the response is when the inevitable problems arise. Bad apples will always slip through, as they have done in the pre-Uber days, and some of them will turn out to be the kind of person you’d really want to be the kind of person to be identified by a background check as a bad risk. It’s Fort Worth Mayor Betsy Johnson and the members of their City Council who would face any consequences from this. It could easily be overblown by sensationalist news coverage, but if something bad does happen, it could really blow up. Just something to keep an eye on, and to keep in mind as the legislative session approaches.

Not addressed by this story is the question of access to rides for people with disabilities. One of the reasons why cab companies have been regulated the way they are is because they have a mandate to provide service for residents who can’t get themselves around town. How will that work under this structure? In Houston, Uber agreed to provide a certain number of vehicles that can accommodate people with disabilities, and in their more recent threat to leave they stated that accommodations for the disabled could be achieved under a regulatory scheme that was more to their liking (scroll to the bottom). In some cities, this UberACCESS service has partnered with transit agencies as well. What responsibilities do rideshare and traditional cab companies have in this new environment? There’s already litigation over the issue of disabled Texans being denied service by rideshare companies. I’m sure they’ll be watching what happens in Fort Worth with great interest.

All that said, this could work out fine. It may be that the issue of access for disabled folks will continue to be addressed in a way that is acceptable to all, and it may be that the number of problems with drivers of questionable backgrounds is vanishingly small. This will certainly provide fodder for that debate. It’s not the approach I would take, but that doesn’t mean it’s wrong. We’ll just have to see how it goes. The Chron has more.

Rep. Isaac asks FTC to step in on Austin rideshare regulations


Rep. Jason Isaac

State Rep. Jason Isaac has asked the Federal Trade Commission to investigate Austin’s rules for ride-hailing companies, raising concerns that the city’s “burdensome regulations” are anti-competitive.

In the letter dated June 7, Isaac said he thought the city “erected a pernicious barrier to competition” through its rules, which have become a point of contention in the statewide discussion about which layer of government should ultimately regulate the industry.

“I think this turned into an immature battle that left some people really scared and things were done out of a vindictive nature,” Isaac, R-Dripping Springs, said in an interview Thursday. “I personally believe that this is anti-competitive in nature, but I want to ask the FTC if they think it’s anti-competitive.”


In his letter, Isaac suggested the Austin City Council knew adopting the fingerprinting ordinance would spur Uber and Lyft to leave the city and, in turn, would “return the marketplace” to taxi companies.

“Despite knowing the ramifications of their vote, the Council added burdensome regulations and put the city at risk,” Isaac wrote.

Jason Stanford, a spokesman for Adler, said the city wants to have ride-hailing services.

“Nothing we’ve done would prevent Uber and Lyft from operating now in Austin just as before, and they are welcome to come back at any time,” he said in a statement. “All such companies operating here would be entitled to receive the same kinds of support and encouragement.”

You can read Rep. Isaac’s letter to the FTC here. Putting aside the absurdity of a Tea Party legislator calling in the Federal Government to intervene in a local matter – does Rep. Isaac want someone to pin a “Primary me!” sign on his back? – there’s the small matter of ridesharing startups sprouting in Austin like bluebonnets in March since the Prop 1 vote and subsequent Uber/Lyft pullout. How terrible can these regulations be if new options keep appearing in Austin (here’s another one!) seemingly every week? I pity the poor FTC official who will have to reply to this silliness with a straight face.


Austin isn’t the only city with rideshare innovation happening.

Sugar Land-based PocketCab LLC plans to fill the potential void with a new dispatch app for taxi and limousine companies if Uber does decide to leave the Houston market.

PocketCab works similarly to on-demand services today except that it pulls from independent limo and taxi drivers, not someone looking to use their own vehicle for brief periods like as in San Francisco-based Uber Inc.’s platform. Taxi drivers that don’t lease their vehicles from a large company like Yellow Cab struggle in today’s technology-driven industry and need a place to pick up more rides besides a cab stand at the airport, said Edmund Samora, CEO of PocketCab.

“Taxis need to get on a central dispatch system,” Samora told the HBJ. “Individually, they’ll never be found.


To list as a driver on the service, PocketCab charges about 10 percent of a drivers earnings, Samora said. The company wants to become the app for the city of Houston, which had previously said it wants to launch an app before the Super Bowl in 2017, but PocketCab will still launch in Houston regardless if it’s awarded the city contract or not, Sinhasane said.

Here’s their website and Facebook page. They’ve been operating in Houston since last October, and this story is as much about their joint venture with MobiSoft to improve their app platform as it is about their goals for Houston. I just like to keep track of this sort of thing, to remind us all that there are and will be other options out there.

And on that note:

When Michael Leto heard the news last month that Uber and Lyft were pulling out of Austin, Texas, because of an ordinance regarding driver background checks, he hopped on the first flight there. As the CEO of a Phoenix-based ride-hailing company called Fare, Leto saw an opportunity too good to pass up.

Leto arrived in Austin on a Monday afternoon, met with the mayor on Tuesday and got approval to operate in the city the following Friday. In Fare’s first two weeks there, the company had already paid nearly 1,300 drivers for roughly 20,000 trips. The business in Austin is so good, Leto said, he’s planning on moving his company headquarters there.

For smaller ride-hailing companies like Fare, the prospect of a suddenly wide-open marketplace — one without the 800-pound gorillas of Lyft and Uber in a city full of drivers and riders already accustomed to the concept of ride-sharing — is an unprecedented business opportunity. The scramble to build the “next Uber” in Austin has been rapid. With more than 900,000 residents, a huge university, active nightlife and a tech-savvy workforce, Austin represents an ideal test bed for new tech services.

Since Uber and Lyft left Austin, half a dozen ride-sharing operators have secured the city’s permission to operate, and a soon-to-launch nonprofit is likely to join the list soon. Another company is linking people to rides on a Facebook group while it perfects its peer-to-peer technology.

“You think about competing with multibillion-dollar companies, and then you show up in a city where all of the infrastructure and training have already been done,” said Leto. “It’s been quite a nice transition for us to come to Austin.”


Austin marks the first place where the public, which Uber often rallies to its side against regulators and policymakers, rejected its policies. Now it could also be the place that shows whether Uber and Lyft are indispensable.

So far, though, it’s unclear how exactly the companies’ departure will impact Austin residents. Demand for rides right now is typically lower than at other times of year. The spring semester for the University of Texas, which enrolls 51,000 students, ended the day before the vote, leaving fewer potential passengers in town. Tourism season hasn’t kicked into high gear yet, and some of the city’s largest draws won’t occur for months — including the Austin City Limits music festival, which begins in September, and South by Southwest, slated for next spring.

For the drivers — many of whom lost their livelihoods when Uber and Lyft left — the city has worked to help them bounce back. It’s held a job fair to match drivers with new companies and helped set up a hotline to assist former Uber and Lyft drivers in finding work or getting services like unemployment.

“Uber and Lyft left their drivers, in particular, and their riders, in the lurch,” said Councilmember Ann Kitchen, who heads the city council committee that drafted the safety rules for ride-hailing companies.

The city can’t favor any of the companies, but it has offered services for all of the drivers and companies that have shown interest.

Kitchen also said that the surge of companies applying to operate in Austin shows that the ordinance is not overly restrictive.

“We always said that Austin is a great market, and we expected there to be TNCs [transportation network companies] that wanted to come to Austin that would operate within the public safety values and requirements of the community,” she said. “That’s what all of these TNCs are doing.”

Not that that’s likely to cool anyone’s ardor for overriding local ordinances via the Legislature, but it is an interesting counter-narrative anyway. And don’t we usually celebrate when a company relocates its headquarters to Texas? That wouldn’t have happened here had it not been for Austin’s ordinance and the Prop 1 election. Funny how these things work, isn’t it?

What’s the roadmap for ridesharing regulations look like?

This is going to be a challenge, no matter how you feel about it.


Several state legislators have made it clear they’re eager to take control of rules for ride-hailing companies in Texas, shifting power from individual cities to the state. But with six months until the next legislative session, there’s no clear consensus on how exactly to go about it.

The Legislature has tried before — and failed — to come up with statewide regulations sought by industry heavyweights Uber and Lyft to free them from conflicting local rules.

But the recent decision by voters in Austin — the conservative state’s liberal capital — to reject rules sought by the ride-hailing giants has been a rallying cry for lawmakers.

“We don’t live in a democracy,” said. Sen. Don Huffines, R-Dallas. “All the authority cities have comes from the Legislature. They exist by the mercy of the Legislature. So we have a distinct role in overseeing all political subdivisions that we create, and we’ve got to make sure that they don’t trample economic liberty, personal liberty and freedoms.”

After the Austin election, Huffines immediately called for state regulations, or what he called “deregulations,” and was unconcerned with overriding the will of local voters.


“People get riled up, and they pick up their pitchforks and they run to the ballot box or they run to the barn and tar and feather or lynch someone,” he said. “We have rules of law relating to protecting the views of the minority.”

Huffines wasn’t the only state legislator whose ears perked up at news that Austin voters upheld city rules for ride-hailing companies over those backed by Uber and Lyft. His Senate colleague, Georgetown Republican Charles Schwertner, also pledged to draft legislation.

“We’re exploring all options,” Schwertner said. “There’s the background check and then there’s fingerprinting, those are two separate issues. There’s competing discussions … I personally have not made any decisions as to what is the best statutory language to put in the bill.”


For Schwertner, the layered concerns of ride-hailing companies, drivers, riders and municipalities indicate that statewide regulations would be the best route forward.

“I think the safety issue in my mind is paramount,” he said, pointing to concerns with drunk driving. “[There is] the mobility issue, economic issue — it’s multi-tiered. It’s not just a local control versus state regulation issue. It’s all those things. When you look at the totality of the concerns, it favors statewide, uniform, consistent and fair regulation.”

I’m glad to hear that from Sen. Schwertner, since his initial statements following the rejection of Prop 1 were mostly bombast. I’m still not convinced that the Legislature needs to step in on what has traditionally been a local issue, but if we can have a reasonably serious discussion about what we want ridesharing regulations to accomplish, and if we can get Uber and Lyft to be more forthcoming with their data, then this could be a positive experience. My personal preference, if this must happen, is for the state to provide a minimum set of standards that cities and counties are then allowed to add onto as they see fit. And if we really care about having a free market and not just a greased skid for the two major players, then let’s be sure to not impede the new players who are trying to fill the niche that Uber and Lyft voluntarily left behind.

On the matter of overriding municipal ordinances, that appears to now be on the table:

After a visit Wednesday from top Uber brass, Texas state Rep. Joe Pickett, D-El Paso, appeared to soften his position against a possible statewide bill that would replace city ordinances regulating rideshare companies.

As the chairman of the House Transportation Committee, Pickett’s position on the matter is crucial. Any bill regulating how companies such as Uber screen their drivers likely would be assigned to his committee, where Pickett would have power to block them.


Immediately after [the Austin Prop 1 rideshare vote], two Republican lawmakers said they would introduce bills in the 2017 legislative session that would overturn fingerprint requirements in Austin and Houston. Pickett said he would oppose such bills since they would thwart the will of local voters.

However, the El Paso lawmaker this week said there might be some room for compromise.

Houston Chronicle business columnist Chris Tomlinson in May speculated that the real reason Uber and Lyft are opposed to fingerprinting drivers is that their turnover rate is so high that many drivers won’t wait the 10 or so days it takes for the checks to be completed.

An Uber spokeswoman Thursday did not respond directly when asked if that is the case.

But Pickett said that on Wednesday he discussed a compromise with Uber brass that might solve that problem. Under it, riders could specifically request drivers who had undergone fingerprint-based FBI background checks.

“I told them that on the surface, it seemed like a hybrid that could work,” Pickett said.

Pickett goes on to say that he’d want to see if this idea is acceptable to cities and his colleagues first. It’s also not clear if Uber and Lyft would go for this; the basic idea has been floated in Austin with no apparent interest. There’s still a lot of moving parts here, and it’s not clear what if anything will be the consensus position, or at least the position that a majority will approve.

On a side note, good Lord is Don Huffines an idiot. Please, Dallas Democrats, find someone who can run against him in 2018. I know that’s an off-year and all, but his district isn’t that red. Even in the dumpster fire of 2014, SD16 was what passes for competitive, with Greg Abbott leading Wendy Davis by a 57.5-41.0 margin; not close, obviously, but slightly less Republican than the state as a whole. Please find a decent candidate and put some money into that race. Surely we can do better than this.

First rideshare legislative hearing

There will be a lot more where this came from.


Representatives from Uber and Lyft urged lawmakers to adopt statewide regulations for the ride-hailing industry during a Texas Capitol hearing on Wednesday, citing what they called burdensome local ordinances that have driven them to leave Austin and other Texas cities.

The companies fielded pointed questions from members of the House Committee on Business and Industry about safety concerns and how local regulations, like those in Austin, impact their operations.

“I think we first need to recognize the obvious – technology is changing our lives,” said Committee Chairman René Oliveira, D- Brownsville, at the start of the hearing. “These changes are going to be very profound; you’ve already seen that in Austin … but this is not just an Austin, Travis County issue.”

Currently, regulations for ride-hailing companies are handled on a city-by-city basis. The Legislature discussed potential regulations during the 2015 session, but those bills failed to gain any traction. Now, several months ahead of the next session, lawmakers are revisiting the issue after Austin citizens voted in May to keep in place a requirement for ride-hailing drivers to undergo fingerprint-based background checks.



Oliveira said while he tends to favor local control, “there are some issues that demand state intervention.”

“I am neutral on this issue,” he said. “What I am concerned about is finding out the necessary facts to determine – is this an issue that the state of Texas should get involved in or is it an issue of local control?”

During the hearing, he asked both [Rena Davis, a public policy manager for Lyft] and Sarfraz Maredia, the general manager for Uber in Texas, if they had data to support claims that they offer safer rides than taxis. Neither Davis nor Maredia provided specific numbers, to the frustration of the committee.

“I can’t believe [Lyft] or Uber doesn’t have data that we could look at that involves drivers and what the incident rate is,” Oliveira said, referring to the number of violent encounters between drivers and riders.

Both Maredia and Davis assured the panel they would provide lawmakers more information.

So let’s talk about regulations and transparency. After that post was publushed, Uber pointed me to this safety report on their website that goes over their criteria for background checks and what causes a potential driver to be eliminated. I appreciate the feedback and commend them for making that public. I also have this memo from Sarfraz Maredia on Uber’s safety procedures, as well as Maredia’s written testimony to the committee. A lot of what’s in those documents are things we have heard before from Uber, though perhaps not as much lately as the argument has largely defaulted to “do it our way or we’ll leave and then you’ll be sorry”. The thing is, I think Uber and Lyft could have done a lot better in Austin if they had focused on the things they do for customer safety instead of bludgeoning everyone to death with nonstop misleading ads and automated text messages. They could still gain some ground, in Houston and in Austin if they want to, by going back to that emphasis on their methodology and by being forthcoming with their data to back up their claims. Show us the numbers, on how many drivers they reject and for what reasons, compared to the cities, and how many incidents per capita there are in cities that do it their way versus cities that impose “unnecessary” regs on them, however they want to define that. If the cities in question can’t or won’t provide adequate data to allow them to make the comparisons, then so much the better for them and their argument that the cities are making them jump through hoops for no good cause. And if some of the numbers don’t show them in as positive a light as they’d like, be honest about it and see what can be done to improve. These guys say they’re bold innovators leading the way to a better future, well then do the math and show us the analytics to prove it. I promise to keep an open mind.

Since the Austin election and Uber and Lyft’s departure, startups and smaller ride-hailing companies have swarmed the city and its newly open market.

One company that has seen success in the capital city is getme, which has offered rides since December. The company’s founder, Michael Gaubert, told lawmakers Wednesday the company opposes statewide regulation of fingerprint background checks .

“The notion that there should be a state law ban on fingerprinting is not the correct way to go on this,” said Gaubert, who was joined at the hearing by former Dallas Cowboys player Michael Irvin, who he described as a close friend.

But lawmakers seemed committed to pursuing some sort of regulation next session, particularly Rep. Jason Villalba, R-Dallas, who cited concerns with the “patchwork quilt” of regulations across the state.

“It may not get to the governor,” he said of potential legislation, “but we’re going to try something.”

It would be nice to think that the Lege will look at the data and put forth reasonable proposals to address what can be done while allowing cities to take the steps they need to get the service they want. I doubt that’s what will happen, but it would be nice to think. Trail Blazers has more.

What do we really want from rideshare regulations?

From Medium:


To help ensure people have a fair chance at earning a living, Uber’s screening process embraces protections codified in the Fair Credit Reporting Act and other similar laws, ensuring lookback periods are reasonable and arrests without convictions or charges are not considered, among other indicators. We have said time and again that fingerprinting may not be the best way to determine whether or not someone is qualified and able to provide a safe and reliable ride. Further, there’s no evidence to suggest it would improve safety for passengers and it has costs to privacy that other approaches to background checks do not.

We believe the right path forward is to continue to improve the level of transparency and accountability that’s built-into our service and the processes available for screening drivers. Instead of relying solely on flawed databases that are known to have information gaps, our technology makes it possible to focus on safety before, during and after every trip.

When so many people’s lives are deeply affected by their inclusion in a potentially faulty database, it’s important that the public has the time and ability to analyze what’s in it and how it’s being used. We hope the DOJ and FBI not only grant these groups’ well-warranted request for an additional 30 days to comment on its proposal but also, consider the quality of the database and whether or not people should know how it may affect their lives.

From Jay Aiyer, in the Chronicle:

Historically, taxis have been one of the most heavily regulated local industries. City governments have restricted everything from the number of taxi licenses issued to whether a driver can use a cellphone while operating a vehicle. The list can be quite long and intrusive. Ride-sharing companies often argue that these regulations are unnecessary. After all, no other industry is subject to this level of restriction. Municipalities place no restrictions on the number of fast-food restaurants, nor do they require background checks for cable employees entering people’s homes. So why vehicles-for-hire?

The simple reason is the quasi-public function they serve. While private businesses, vehicles-for-hire serve a distinct public transportation function that is unique and still necessary in our society. They are an extension of the city in welcoming visitors, transporters of last resort for transit-dependent populations, and a critical safety valve for impaired drivers. They are simply not the same as a fast-food franchise or the cable company. They are a critical part of a community’s transportation network.

If we accept the need for some restrictions, the obvious question is: what kind? Public safety, access protections and insurance requirements seem obvious. We have a high expectation of safety and security when using a vehicle-for-hire, and having fingerprint-based criminal background checks to determine basic eligibility to drive is important. But even those restrictions should be relatively limited.

While we can agree we don’t want those convicted of serious crimes driving, we need to be more flexible to allow individuals who have paid their debt to society to be employed. Similarly, having broad insurance requirements is a critical need to ensure general public safety and avert catastrophic medical costs. We can’t have accidents with uninsured passengers or drivers. Finally, there should be no debate over the need to protect access to transit services. All people, regardless of neighborhood, should have access to vehicle-for-hire services.

So let’s talk about fingerprints for a minute here. Everyone agrees that there are some people we would rather not have driving cars we pay to ride in. We do background checks, which include checks of criminal records, to try to identify these people that we want to exclude. Fingerprints are an obvious entry point to this data. I presume there are others, for if not then I’m honestly unsure how Uber and Lyft can claim to check these records, but assuming there are then the argument we’ve been having is mostly about whether this is the most effective way of looking at arrest and conviction information.

The discussion we should be having comes back to that question about who we want to keep out of the driver’s seat. Ideally, that should involve a risk assessment of some kind. Not all criminal records are created equal. Violent crimes are a big red flag, but it’s also reasonable – our national conversation about drug reform notwithstanding – to prefer to not have people with drug convictions serve as drivers. There’s also a difference between being arrested and being convicted, and between recent arrests and those that happened ten, twenty, thirty years ago. How do we assess this information and come to reasonable, consistent decisions about who we grant permits to and who we refuse them to? And if we’re going to argue about what if any role fingerprints should have in this process, then it would greatly help to know how Uber and Lyft arrive at their conclusions about those who apply with them. What are their criteria for determining who’s in and who’s out? If they want us to trust them, we need to know that.

As I say, this is the discussion we should be having. It’s hard to do in an environment where a key stakeholder refuses to engage beyond “let us do it our way or we’re outta here”, but that’s where we are. To be sure, the current process mandated by the city could be improved, to make it more convenient and less time-consuming for would-be drivers. I don’t know the specifics so I’ll skip the part where I make suggestions, but I’m sure if Uber or anyone else wanted to make their own to the city, they would be amenable to them. It would help if Uber backed down from the ultimatum first, of course. You know, as a show of good faith. I for one would like to see Uber and Lyft and some other competitors operate in Houston. I’d also like for us to come to a consensus about who we do and don’t want doing the driving. I feel like if we can do this, the rest will follow. Who’s with me?

In the meantime, the State House Committee on Business and Industry is holding a hearing in Austin on Wednesday at 10 AM to discuss the sharing economy. Uber General Manager Sarfraz Maredia has been asked to testify, as have representatives from Houston and Dallas. A livestream of the hearing can be seen here. I’ll be very interested to see the reporting on this.


Another new player gets set to enter the Austin rideshare market.

Adding to the growing number of ride-hailing options in Austin since Uber and Lyft’s wholesale evacuation, a new nonprofit, community-based app called RideAustin was introduced today at the Alamo Drafthouse on South Lamar.

The app is being described as “innovative,” as well as made “by Austin, for Austin,” according to Joe Deshotel, RideAustin’s PR representative.

The initiative is a collaboration of Austin-based tech entrepreneurs and community leaders, for service that “[brings] the community together to build local solutions for Austin’s ridesharing future.” Formed as a nonprofit, and led by billionaire Austin tech giant and Trilogy founder Joe Liemandt and Crossover founder Andy Tryba, RideAustin’s overarching goal to become a “community asset,” per Deshotel, begins with uniting tech advancement with social responsibility.

Only two weeks in the making – Deshotel himself joined the group a week ago – the app joins Get Me, zTrip, Wingz, and still-in-the-works Warp Ridesharing. The RideAustin app will go live for iPhone users this morning, with service starting in June. (The Android version of the app is also expected to roll out in June.) Prospective drivers can start the on-boarding process, and get themselves scheduled for fingerprinting.

Blue-sky success would involve a smooth scale out from its initial services areas: the Austin-Bergstrom International Airport and the Downtown area, for which exact parameters haven’t been set. Not having “to worry about shareholders” as a nonprofit, it “will allow drivers to earn more [RideAustin will take a smaller than industry-standard commission] and riders pay less while helping local charities.”

Initial ride pricing itself is unknown, but unlikely to be as low as Uber and Lyft, at least to start. As reported previously, the best current option, Get Me, has been struggling with driver/rider matches, often forcing riders to wait longer than 10 minutes – Uber took an average of three minutes – and pay significantly higher prices.

Two unique RideAustin app features include a fare roundup option and “optional surge pricing,” says Deshotel. The fare roundup feature would allow riders round their fares up to the next dollar over the fare, to be given to a choice of as-yet-determined charities.

The more interesting (and potentially problematic) feature, optional surge pricing, would allow riders to opt-in to surges, allowing them first ride at premium cost. Riders electing not to opt-in, or financially unable to do so, will remain in driver queues, placed behind those accepting surge pricing. Though RideAustin is surely a business in all contexts, even with its additional aims at targeting the underserved and disabled, locating balance will be paramount, and could throw its first-look presentation as community-facing into immediate question.

Having this be a nonprofit is an interesting variation, and while I’m not exactly sure how well that will work, I see no reason why it can’t work. The point is that we should all hope that at least a couple of these new ventures find success, which they are then able to bring to other cities. I’ve heard an awful lot about the “free market” in ridesharing over the past several months, but the truth is that the rideshare market was and currently is entirely dominated by two enormous firms. That’s a “competitive” market in the same way that the broadband and cable/satellite TV markets are competitive. Surely that’s not what we really want here, right? I’ll say again, the single best outcome here is for multiple viable alternatives to Uber and Lyft to emerge. That would be good for riders, good for drivers, and good for city governments that don’t want to be held hostage by a couple of would-be monopolists. The Statesman and Buzzfeed have more.

San Antonio to re-revisit its rideshare requirements

Just when you thought it was all over


With Transportation Network Company (TNC) tension looming from Austin and Houston, the City of San Antonio is preparing its push to renegotiate with ride-hailing companies such as Uber and Lyft. And one of the officials taking the lead on the talks believes they’ll be a model for other municipalities to follow.

“It’s important that we move forward and set the example. And I think we’re about to for the entire state and possibly the entire country,” said City Councilman Roberto Treviño at a meeting of the City Council Governance Committee. Treviño has spearheaded much of the City’s negotiations with TNCs.

Lyft and Uber left San Antonio in March 2015, after City Council mandated that drivers undergo fingerprint background checks. After a spring and summer without the services, a 9-month pilot compromise was struck to bring them back: The checks were made voluntary, with the City footing the bill for those who wished to undergo them. If a driver submitted to a fingerprint background check, they’d receive a special designation on the app’s screen.

The deal was portrayed as a win for consumer choice and TNCs alike. But few drivers have undergone the voluntary checks. There’s also no way to specifically hail a driver with a fingerprint background check, so passengers who want one must repeatedly hail a ride, then cancel it until they’re picked up by a fingerprinted driver.

Councilman Joe Krier said he hadn’t heard of “a single … bad experience with Uber or Lyft” from constituents. But Councilman Mike Gallagher expressed concerns over if citizens understood how to identify whether a driver has passed the fingerprint check.

“I almost wonder if we need to strengthen the ordinance with something that says ‘Caution: Driver has not passed fingerprint background check,'” Gallagher said.

See here for the background. If you live in San Antonio, there are a couple of public meetings scheduled to discuss this; see the link at the top for more details. One such meeting has already happened, and there’s also an online survey you can participate in. The operating agreements with Uber, Lyft, and GetMe expire in the next few months, with the GetMe one the lasting until October, but it looks like they will all be allowed to go through then. For all the sturm und drang in Austin, I’d say this is the situation to watch. if SA and the TNCs can come up with an agreement that is broadly acceptable to all, including the cab companies, then that could serve as a starting point for Austin and Houston, if they are inclined to redo their own ordinances. If not, well, that will add to the impetus for the Lege to butt in. We’ll see how it goes. Texas Public Radio, San Antonio Magazine, and the San Antonio Business Journal have more.

Abbott comments on Austin rideshare referendum

Sort of.


Gov. Greg Abbott said Monday the fight is not finished when it comes to regulations in Austin that have driven ride-hailing companies out of the state capital.

“The issue’s not over,” Abbott said in an interview on CNBC. “Republicans in the Texas Legislature have already raised proposals coming up in the next session to override the Austin vote.”

Pressed on whether ride-hailing companies Lyft or Uber would return to Austin, Abbott said: “I’d just say the game is not over. It’s halftime, and we’ll see what happens in the second half.”



In the CNBC interview, Abbott was read a tweet from venture capitalist Paul Graham that said “Austin has zero chance of being a serious startup hub without Uber and Lyft.” Abbott denied that, saying the city is “already a dynamic startup hub.”

“That process has already left the barn, as we say in the state of Texas, and there’s nothing that will slow it down,” Abbott said. “And the dynamics that’s causing Austin to be a startup hub are already in place and will not be diminished by” the Proposition 1 vote.

As we know, legislation has already been proposed to enact statewide ridesharing regulations, though whether such a bill (if it passed in the first place) would include fingerprinting requirements or not remains an open question. Normally, one doesn’t have to parse Greg Abbott’s words closely, but I can’t tell from this story where he really stands. Is this a priority for him? Is he anti-fingerprints? Unclear at this time. I’m not sure if that’s because Republicans are not of one mind when it comes to fingerprinting, and Abbott wants to see how the wind is blowing before he commits himself, or if it was just a vague question asked by an idiot CNBC host that wasn’t designed to elicit a specific answer. In any event, Abbott and Dan Patrick don’t have to single this out as a priority to get a bill to pass, but if they do it increases the likelihood of it happening.

Lawsuit filed over Uber/Lyft referendum language

Oh, for crying out loud.


Attorney Martin Harry filed a lawsuit — a draft of it was obtained by the American-Statesman — in Travis County state district court late Tuesday contesting the election’s outcome, alleging that the city violated election law by combining what should have been two ballot questions into one.

“I don’t think the voters knew what they were voting on,” said Harry, who is representing himself in the case.

He said voters should have been asked first whether they would like to keep or reject the city’s controversial 2015 ordinance and then whether they accepted Uber and Lyft’s replacement language. He also alleges that the ballot language drafted by the city staff did not match the instructions given by the City Council.

“While we are disappointed to be involved in litigation regarding last week’s election, and would rather be working with companies to help them provide safe and efficient transportation services, we are prepared to defend the lawsuit,” city Law Department spokesman Bryce Bencivengo said.


The lawsuit left Austin-based election lawyer Buck Wood stunned.

“I truly have never seen anything like this in my 40-plus years of doing election law,” said Wood, who reviewed a copy of the draft complaint for the Statesman. “I don’t think the court has any jurisdiction to throw it out on the ballot language.”

He added, “I don’t think he’s got a lawsuit here.”

Harry’s lawsuit asks a court to block the city from enforcing the ordinance that the City Council approved in December — which requires fingerprint-based background checks of drivers with ride-hailing apps, among other measures — unless another election is held.

I don’t care about any of the legalistic argle-bargle here. I just have one simple question: Is there a sentient human being anywhere on the planet who was unaware during the leadup to this election that a Yes vote on Prop 1 is what Uber and Lyft wanted, and that a No vote on Prop 1 is what Uber and Lyft did not want? The millions of dollars that Uber and Lyft spent on this election – which by the way included a number of phony claims about Prop 1 – all carried the message of “vote Yes on Prop 1”. That in a nutshell is what this race was about, and as such it is all anyone needed to know. If this lawsuit goes anywhere, it will be an utter travesty.

Yeah, we’re still talking about the Austin rideshare referendum

The tech community was as divided as everyone else.


Joshua Baer, founder of Capital Factory, the downtown technology incubator, has been a critic of the proposed regulations. He said he believes the vote sent signals that Austin is hostile to startups.

“Losing Uber and Lyft is a major setback to our reputation as an innovative city and technology hub that is already impacting decisions made by venture capitalists and Fortune 500 executives,” Baer said Monday. “It’s critical that the tech community and City Council come together… before our reputation is damaged further.”

But others scoffed at the notion that the Prop 1 vote could do any long-term damage to Austin’s entrepreneurial reputation. Austin economist Brian Kelsey said the vote is unlikely to have negative ripple effects on startups.

“Prop. 1 may be a setback in how the outside world views our seriousness in local policy making, but branding Austin as ‘anti-innovation” is ludicrous,’ ” Kelsey said. ” If the existence of two ride-sharing companies locally has an impact on your business model, then I’d say Prop. 1 should probably be the least of your concerns.”


Initially, many tech workers and entrepreneurs said they thought the vote would get industry support because of general opposition to more regulation of emerging technology business models.

But they now say Uber and Lyft’s aggressive marketing tactics derailed the discussion.

“I think it backfired in the tech community,” said Austin entrepreneur Richard Bagdonas, who supported the proposition. “I have talked to many people who said ‘I’m pro-Uber and pro-Lyft, but the number of flyers, calls and texts I received pushed me over the edge.’ ”



Turnout for Prop 1 was dominated by “traditional” voters who reliably show up to vote in state and local elections, Littlefield said. Early voting data showed that 70 percent of the Prop 1 voters were these traditional voters, [Baer] said.

“I’ve seen it time and time again,” he said. “There are people who will vote in May elections and there are people that no matter how vitally important the results of the May election are to their own personal interests, they simply do not vote.”

Political experts said Uber and Lyft underestimated whether support for their service translated into votes.

Take David Goss. He’s a 40-year-old systems engineer for EMC Corp. in Austin. He regularly uses Uber when he’s going downtown for drinks and needs a sober ride home. On paper, Goss sounds like he would be for Prop 1.

But Goss said he voted against the measure. “I do love Uber, I use it all the time,” Goss said. But he said he wasn’t in favor with just letting Uber and Lyft write their own regulations.

“I definitely felt that there was some middle ground, we needed to find a way to ensure the rides were safe and make sure the employees were treated fairly,” he said.

Austin marketing veteran and entrepreneur Josh Jones-Dilworth, who opposed the proposition, said he watched as the discussion — and tech workers’ opinions — morphed.

“It started as a safety issue, and then it became an innovation issue, and then evolved into a corporate bullying issue,” Jones-Dilworth said. “It’s a complex issue, and there was never a consensus. I know a lot of people who changed their mind. And I know a lot of people who stayed on the sidelines because they thought this was a no-win situation.”

David Broockman, a business professor at Stanford University and an Austin native, said startups like Uber and Lyft view themselves as the underdog taking on an established industry: taxis.

“In Silicon Valley there is a tendency to view startups as David against Goliath,” he said, but that doesn’t always translate outside the Bay area, he said, where they are viewed instead as the Goliaths.

Hard to be the David when you’re backed by a few billion dollars in market valuation. For all that people like Uber and Lyft’s service, this election has shown us that liking only goes so far. I’d like to think that they will consider whether they should maybe change their approach a bit, to be more conciliatory and open to compromise, but so far there’s no indication of that. Perhaps we’ll see that when the inevitable statewide regulation bill comes up in the Lege. For all the bluster from some Republicans following Saturday’s vote, the passage of such a bill is not a slam dunk. It’s still the case that collaboration gets you farther in the Capitol than a bludgeon.

In the meantime, more players are hitting the scene.

While Uber has grown into a global behemoth by deploying many thousands of independent contractors, many of those drivers aren’t happy. New ride-sharing startup Juno–which has so far only launched in stealth mode in New York City–will try to make those drivers into its secret weapon.

Talmon Marco, former cofounder and CEO of messaging app Viber (which sold to Rakuten for $900 million in 2014), confirmed to FORBES that he is behind Juno, and promised that the new service under development “will have multiple capabilities that will differentiate it from other such services.”

But likely its biggest differentiator will be driver relations. While Uber has demonstrated its willingness to anger drivers by slashing prices and commissions over the last few years, Juno plans to take only a 10% commission from drivers. And it claims to have “reserved” 50% of its founding shares for drivers.

“At the heart of Juno is a belief that it’s time for a ride sharing service that treated drivers right,” Marco tells FORBES. “It’s time for an ethical, socially responsible ride sharing service. And that’s what we are doing.”

Sounds promising. As I said yesterday, the best thing that could come out of the Austin referendum is for multiple new rideshare services to emerge and find purchase. I mean, if part of the problem with traditional cab companies was that they were shielded by regulations from facing a competitive market, then surely we don’t want Uber and Lyft to be the only game in town for rideshare, right? A competitive market implies the need for competitors, after all. There would be a certain justice in all this if Uber and Lyft’s self-imposed departure from Austin helps enable those competitors. Chris Tomlinson, who has a few choice words for how Uber and Lyft treat drivers, and Roy have more.

Uber and Lyft do what they said they would

They’ve cut and run.


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.”



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.”

Let’s be clear about one thing: Uber and Lyft were not forced to leave Austin. The rejection of Prop 1 simply means that the city’s existing rideshare ordinance – which as I understand it has not actually begun requiring fingerprint checks yet – remains in place. Uber and Lyft chose to leave rather than operate under those conditions, as Uber has done for the past year and a half in Houston and as both of them have done for longer than that in New York. Nothing about the Prop 1 vote requires them to leave. It is entirely their choice. There has always been room for further discussion on this, though it’s hard to do so when the first move is to go to DefCon 5. But despite all the rhetoric and millions of dollars flushed down the pockets of political consultant and media buyers, it’s not too late to start talking.

What should happen now, then?

Fingerprint-based background checks aren’t great. The FBI’s database is known to be flawed with outdated and inaccurate information. It’s kind of like taking your shoes off before you get on an airplane—it provides the feeling of security while also inconveniencing a bunch of people for show. Still, it might turn out to be the best option—more on that in a second—but as the city considers what regulations are in everybody’s best interest, now that it has ensured that it has a full complement of options at its disposal, it should be looking beyond fingerprinting.

Isn’t Austin stuck with fingerprinting now that people voted down Prop 1?

Nope. If Prop 1 would have passed, the city would have been prohibited from passing fingerprint-based regulations. But now the city is allowed to create whatever regulations it deems appropriate. City council can—and should–be looking to tweak the current ordinance with one that, for example, doesn’t prove discriminatory against drivers of color the way that fingerprint checks do. Although we doubt that Uber and Lyft are particularly passionate about that issue when it doesn’t directly concern them, the Austin chapter of the NAACP and the Urban League certainly are, and the objections they raised deserve to be considered and taken into account.

So what sort of background check should Lyft and Uber do?

That’s the zillion dollar question here. The problem is that most jobs have a process that screens out people who raise red flags. For most companies, you go through an interview, meet the people you’ll be working for, and get offered the chance to interact with the public based on the judgment of someone who is responsible for making sure that the company is represented well. (Depending on the job, it can also come with more formal background checks.) Because the “hiring” process for Lyft and Uber is more of a “sign up” process, the system relies on computer checks to do all of that work. That’s going to result in a process that has definite flaws—and it’s going to take creativity beyond just “run a fingerprint check” to address them. What that specifically looks like is hard to say, but between Austin’s leaders and Lyft and Uber, you’d think there would be enough brainpower to consider some viable options.


So what would make Uber and Lyft come back to the table, if they can just lobby for new rules in the legislature in 2017?

A couple of things: One, they don’t want to give up market share if a competitor picks up steam here over the next year. Two, it’s hard to keep growing a company that’s opted out of too many markets. Investors who see that Lyft doesn’t operate in Austin or Houston, and who know that they may have to make some threats about leaving L.A., have to give some thought to the growth potential of the company.

So what’s the best case scenario here for everybody?

Smart regulations that don’t rely on fingerprinting would be a good place to start. Austin should want Uber and Lyft operating in the city. Uber and Lyft should want to operate in Austin. Austin should want to create regulations that keep people with a history of DWI arrests, or violence against women, or other red flags like that, from driving people around for money—but it shouldn’t enforce regulations that would, say, keep drivers of color (who are disproportionately arrested for minor infractions that don’t put passengers at risk) from working. That system may not exist yet, but creating it ought to be a priority for everybody.

More than anything, a lot of ego is gonna need to be checked. The people who fought against Prop 1, which had a sort of David and Goliath quality to it, need to recognize that the support they received on Saturday was at least as much of a response to the tone of the campaign Uber and Lyft were running as it was a show of support for the specifics of the current regulations. Drawing a hard line around those specific regulations just because they won the vote would be a short-sighted, wrongheaded move.

Uber and Lyft, meanwhile, definitely need to approach Austin City Council with some humility, and consider not just what makes it easiest for them to add drivers to their ranks, but also that there are legitimate safety issues at stake here that the current regulations fail to address.

As Vox points out, Uber in particular has a choice to make about its public image. At the very least, I don’t think this debacle helped them with that. It would be nice if they came up with a solution – even a suggestion – that was more than “trust us, our process is all you’ll ever need, and if you don’t like it we’ll come after your ass”.

As far as the statewide regulation possibility goes, this is a reminder that there are never any guarantees in the Lege.

The chairman of the House Transportation Committee on Monday said that he prefers cities to set the rules for Uber, Lyft and other ride-hailing companies, even after a municipal vote in Austin has prompted new calls for the state to step in.

Rep. Joe Pickett, D-El Paso, said he’s “more interested in what the public thinks” — and that “they spoke in Austin.” Voters there on Saturday rejected a measure to get rid of the city’s current ride-sharing rules, which will require fingerprint-based background checks.

Some Republicans say the election — and the decision by Uber and Lyft to now leave Austin — shows the need for the state to pass industry-friendly rules. That group grew on Monday to include Sen. Robert Nichols, who chairs the Senate Transportation Committee.

But Pickett didn’t join the dog pile.

If the Legislature were to get involved, Pickett said, it should be through a broad discussion about all car-for-hire models, including taxicabs and limos. And if there are statewide rules, he said, fingerprint-based background checks should be part of the agenda.

“Still, the best would be to let the local municipalities decide,” said Pickett, who stressed that he supports all the ride-hailing options, including Uber and Lyft.


On Monday, Nichols, the Senate Transportation chairman, said in a written statement that “it is important to create consistency with a statewide policy to ensure all requirements for Transportation Network Companies are uniform across the state.”

“It can be difficult for these types of companies to operate when there are different ordinances in cities that are adjacent to each other,” said Nichols, a Jacksonville Republican.

That’s the first we’ve heard from Sen. Nichols since his comment in January that seemed to support a fingerprint requirement in any statewide bill. This story notes that Rep. Chris Paddie’s bill from last session eventually had a fingerprint requirement in it before it passed out of the House committee. We’re a long way from any bills being introduced, and I fully expect this to be a headline fight next year, but all I’m saying is that the signals are mixed right now about what such a bill might wind up looking like. Don’t take any bets on it just yet.

One more thing, from that Statesman story:

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.


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.

By far, the best thing that could happen as a result of this, regardless of what goes on next year in the Lege, is for multiple viable competitors to Uber and Lyft emerge. I mean, isn’t that how a free market is supposed to operate? Let a thousand flowers bloom now that the field has been abandoned by the top predators. We all win in that scenario.

More on the Austin rideshare referendum

The fallout continues to fall.


Austin voters on Saturday decisively rejected Uber and Lyft’s $8.6 million bid to overturn the city’s rules for ride-hailing apps, bringing a stunning conclusion to the most expensive campaign in city history.

The failure of Proposition 1 brought new threats that the ride-hailing giants would retreat from Austin as the neighborhood and labor groups that defeated them on a shoestring budget celebrated.

“Uber, I think, decided they were going to make Austin an example to the nation,” said longtime political consultant David Butts, who led the massively outspent anti-Prop 1 campaign, Our City, Our Safety, Our Choice. “And Austin made Uber an example to the nation.”


Following the results Saturday night, Lyft reiterated its threat to terminate service in the city as of 5 a.m. Monday.

“Lyft and Austin are a perfect match and we want to stay in the city,” said Lyft spokeswoman Chelsea Wilson, in a statement. “Unfortunately, the rules passed by City Council don’t allow true ridesharing to operate.”

That came just hours after Uber finally put a date and time to its pullout threat: 8 a.m. Monday.

“Disappointment does not begin to describe how we feel about shutting down operations in Austin,” Uber Austin general manager Chris Nakutis said in an emailed statement. He added: “We hope the City Council will reconsider their ordinance so we can work together to make the streets of Austin a safer place for everyone.”

Austin Mayor Steve Adler, who had urged voters to reject Prop 1 with the hopes of getting Lyft and Uber back to the negotiating table, held out hopes for more talks.

“We’re at a place right now where we welcome Uber and Lyft to stay in the community, and I hope that they’ll continue to talk with me,” Adler said Saturday night. “We need TNCs (transportation network companies) in this community so we have mobility choices, but how we’re going to do that and who we do that with, obviously, at this point, is something that we need to work on and work out.”

My opinion continues to be that while Uber and Lyft are nice to have, the city of Austin did quite nicely without them for a long time. It will find a way to carry on if they leave. And while the concept of transportation network companies is a good one, there’s no law saying it has to be those two providing the service. To me, a fine outcome of their departure will be for another company to take advantage of the opportunity to emerge in a market that isn’t dominated by a couple of operators who care primarily about crafting an advantage for themselves.

All of this has to make you wonder. Why is fingerprinting such a line in the sand? I can see the argument about it limiting the pool of drivers in a needlessly broad way, and I can see the argument that it’s a burden on those who wish to drive. In either of these cases, there is a sympathetic story to be told, and surely a lot of consensus for finding improvements to the process. Surely launching a multi-million dollar effort to repeal an ordinance that went through the normal lawmaking process, after trying unsuccessfully to recall the Council member who led the process to pass that ordinance, is the last arrow in one’s quiver, nor the first thing you try. So why was this a hill that both companies were so willing to messily and expensively die on? Well, here’s one possible reason for that.


The San Francisco and Los Angeles district attorneys have accused Uber of failing to uncover serious crimes on the records of some drivers allowed to operate in the two cities. The attorneys said they discovered 25 drivers in the two cities whose criminal records had gone undetected, and at least some records included felonies. Notably, one of the drivers whose criminal record went undetected was a convicted murderer who spent 26 years behind bars.

The discovery would appear to put pressure on Uber to adopt a more thorough background check process in order to stay in consumers’ good graces. But there’s more at stake here: If the company does adopt more rigorous background checks, which could include fingerprinting, drivers seeking classification as employees could try to use the move as evidence they are indeed employees and not private contractors, says one labor attorney.

The issue at hand is how much control Uber exercises over its drivers, according to Aimee E. Delaney, leader of the
 Labor & Employment Practice Group at the Chicago headquarters of Hinshaw & Culbertson LLP. Generally speaking, evidence of an employer attempting to control a person’s behavior can be used to determine that the worker is an employee.

One question that can help determine if someone is an employee is “Does the company control or have the right to control what the worker does and how the worker does his or her job?” according to the IRS website. So theoretically, asking someone to take an extra step to show they are qualified to do the work could constitute a form of control. The IRS admits however, “There is no ‘magic’ or set number of factors that ‘makes’ the worker an employee or an independent contractor” when it comes to control.

“I sympathize with where they are at because I think they are in a difficult position,” Delaney says of Uber, adding that the company has to “walk kind of a fine line.”

If the company simply ran background check materials through an additional database, that probably wouldn’t feed the case of drivers seeking employee classification. But if Uber puts a new requirement on drivers to be fingerprinted, that might come up in such a labor dispute.

Delaney, who represents employers in labor arbitrations, says that while fingerprinting wouldn’t necesarily provide enough fodder to nudge drivers into classifications as employees, she imagines it’s an idea that has crossed the minds of Uber’s legal team.

That makes a lot of sense, no? It’s all about protecting the business model, which depends on the labor being as low-cost as possible. At least until such time as driverless cars become available and make the whole thing moot.

What may also be moot is having this argument at a municipal level. The next step of this battle has already begun.

Today, Senator Charles Schwertner, MD (R-Georgetown) announced he will file a bill in the upcoming legislative session designed to establish consistent and predictable statewide regulation of ridesharing services like Uber and Lyft, also known as transportation networking companies (TNCs). The 85th Session of the Texas Legislature convenes in January 2017.

“It has become increasingly clear that Texas’ ridesharing companies can no longer operate effectively through a patchwork of inconsistent and anti-competitive regulations,” said Schwertner. “Any legitimate safety or liability concern regarding ridesharing clearly deserves to be addressed, and I welcome all parties to engage productively in that discussion. But as a state with a long tradition of supporting the free market, Texas should not accept transparent, union-driven efforts to create new barriers to entry for the sole purpose of stifling innovation and eliminating competition.”


The issues surrounding ridesharing have also had a significant economic impact on the citizens of Senate District 5, including approximately 40,000 Austin residents living in Williamson County. As a source of employment, ridesharing provides fulltime or supplemental income for over 5,000 Uber or Lyft drivers living in Williamson County, and countless other residents of north Austin, Cedar Park, Round Rock, and Georgetown depend on ridesharing services to commute to work, travel to the airport, or get home safely from downtown.

“I’ve heard from dozens of constituents in my district, including many Austin residents, who depend on either the service or revenue that ridesharing provides,” said Schwertner. “People are free to select whatever method of transportation they prefer, but we shouldn’t be trying to restrict the options available to our citizens when it comes to addressing our transportation needs.”

Yes, I’m sure the anti-Prop 1 forces, which were outspent by more than fifty to one, were in the thrall of Big Taxi. You do you, Senator. I’d advise you to have a statement about economic impact ready for your constituents when that driverless rideshare car initiative comes to Texas. Getting back to the main issue here for a moment, I will note again that Sen. Robert Nichols, the chair of the Senate Transportation Committee, was last quoted saying that a statewide law should have a fingerprint component in it. Whether that’s still his position now, or will be after Uber and Lyft back a dump truck of lobbyist money into his office, remains to be seen. For what it’s worth, the Council members in Houston who have expressed an opinion so far have all been 1) Republican, and 2) in favor of fingerprinting. So this fight next year may be more multi-dimensional than it first appears. Ben Wear, who has a really good take on this, the Observer, and the Rivard Report have more.

Austin rideshare referendum goes down



Preliminary election day results in Austin show 56 percent of voters against Proposition 1, a ride-hailing ordinance supported by Uber and Lyft. With 76.76 percent reporting, 13,957 have voted against the ordinance and 10,901 have voted for.

These numbers mirror early voting results, where of the 54,759 ballots cast, 30,683 (about 56 percent) voted against the ordinance and 24,076 voted for. Early voting for Proposition 1 started April 25 and closed on Tuesday.



Both Uber and Lyft said they plan to cease their Austin operations if the election does not go in their favor. Austin Mayor Steve Adler said he hopes to sit down with Uber and Lyft following the election.

“The people have spoken tonight loud and clear,” he said in a statement Saturday. “Uber and Lyft are welcome to stay in Austin, and I invite them to the table regardless. Austin is an innovative and creative city, and we’ll need to be at our most creative and innovative now.”

Rick Claypool, research director for Public Citizen, a consumer watchdog group, said the clash in Austin is unique because the city’s special election is the first time a proposal backed by Uber has actually gone to voters. Claypool said the city will serve as an “object lesson” for other cities and could cause a “chilling effect” for those considering regulations.

“Likewise, there are probably going to be cities that go out of their way to sort of lower the floor of requirements for companies,” Claypool said. “They’ll say, ‘Come here, we’re Uber-friendly. We won’t make you do those things that those uncooperative places make you do.'”

The election night returns are here. Don’t be misled by the “213 of 229 Precincts Reporting” note, it said that from the beginning and I suspect it was just an oversight. I gave up refreshing the main election returns page at about 10 PM; the most recent update at that time was from 9:46. It’s just a matter of the final margin.

You know how I felt about this. Whether Uber and Lyft follow through on their threat to leave or not was unknown at the time I wrote this. We’ll find out soon enough. I’m glad that this multi-million dollar attempt to hijack the local government process failed. I hope Uber and Lyft learn something from this. I have no doubt that there’s room for compromise and improvement in the process, but that requires a willingness to negotiate in good faith, and not come in with a bulldozer and a bottomless pit of cash to force what you want. If they decide to leave Austin and Uber pulls out of Houston, that will be too bad, but they’re the ones who sent the ultimatum. They went all in and they lost, by a lot. Will they double down or will they dial it back and try a different approach? Like I said, we’ll know soon enough. The Austin Chronicle and the Statesman have more.

What Council members think about the Uber threat

I was scrolling through Facebook and came upon this post from CM Michael Kubosh:

Mayor Turner wants UBER to stay, but they must follow the city’s ordinance that requires a CRIMINAL BACKGROUND CHECK and FINGERPRINTS. Council Member Michael Kubosh said that all public service drivers for buses, cabs, train, limos, shuttles and jitneys require the same CRIMINAL BACKGROUND CHECK and FINGERPRINTS. They must follow the rules. They came to Houston during the 2014 Rodeo operating illegally and the City Council changed the Ordinance to make room for their business model. NOW LOOK WHAT THEY ARE WANTING.

Which got me to wondering about other Council members and what they thought. Of the five Council members that voted against the original ordinance in 2014, four remain on Council: Kubosh, Jack Christie, Jerry Davis, and Mike Laster. I went looking, via Google, Facebook, and Twitter, to see who else has had something to say.

And the answer is, most of them have not said anything as yet. One who has is Brenda Stardig, who is the Chair of the Public Safety committee:

CM Dave Martin was quoted in one of the stories I blogged about after Uber issued its ultimatum:

“If you don’t want to follow the rules we all agreed to, have a good opportunity in another city,” District E Councilman David Martin said. “But we cannot be blackmailed when it comes to public safety.”

And that’s pretty much it for actual opinions. The only other Council member to say something was Greg Travis:

Mayor Sylvester Turner wants uber to stay in Houston, but wants the company to operate under the same rules as other transportation companies. Uber wants to eliminate regulation for its drivers to have city fingerprint check. Rather, uber wants to use its own background check. Mayor says uber’s background check inadequate. Your thoughts?

Comments on that post ran more in Uber’s favor than against, for what it’s worth. Also for what it’s worth. all four of these Council members – Kubosh, Martin, Stardig, and Travis – are Republicans; so is Jack Christie among the No votes from 2014, while Davis and Laster are Dems. I mention that mostly to note that if Uber is trying to make a free-market/deregulation argument, it’s not working on the kind of people you’d think it might work on. This discussion is just getting started, and Lord knows Uber is willing and able to dump a ton of resources into winning it, so this is hardly a final whip count. But clearly, Uber has some ground to make up to win this one.

Austin Uber referendum update

There’s still a crapload of money being spent by Uber and Lyft to win this thing.


In the last month, Ridesharing Works for Austin – the PAC established by transportation network companies Uber and Lyft – raised $4.9 million and spent $4.6 million promoting Prop. 1, the TNC-supported ride-hailing ordinance. With another million in the pipeline, that brings to $8.1 million the TNC’s intend to spend for the May 7 election.

That was the headline news contained in Friday’s “8-day-out” reports filed with the Austin City Clerk. By contrast, Prop. 1 opposition group Our City, Our Safety, Our Choice raised $88,000 over the last month (spending $68,000), bringing the group’s fundraising to $100,000 for the campaign thus far.

According to the Austin American-Statesman, RWA reported an additional $1 million contribution from Uber just before the filing deadline, for a total of $8.1 million. In case your calculator is overheated, that’s more than an 80 to 1 advantage to the Uber and Lyft resources, and a staggering record for money spent in an Austin city election – the previous standard was $1.2 million spent by Mayor Steve Adler in his 2014 campaign. Even the generally stoic Statesman transportation reporter Ben Wear began a Friday Tweet on the Uber and Lyft spending, “Mother of God” and ended: “Mind=boggled.”

Click over to see details on how all that money was sloshed around. I’d have to go back and do the math, but $8.1 million rivals what all of Houston’s Mayoral candidates raised last year; it’s almost certainly more if you take out self-funding. To put it mildly, that’s an awful lot of money to spend on a local election. But of course, it’s not just about Austin.


Let’s put that figure in context. Not only is $8.1 million nearly seven times the most expensive municipal election in Austin’s history—the 2014 campaign of Austin Mayor Steve Adler, who set a new benchmark in political spending just two years ago—but it’s also over a million dollars more than Ted Cruz spent in his 2012 Senate campaign to beat then-Lieutenant Governor David Dewhurst. This is where we are with Prop 1, a municipal election about a very narrowly tailored piece of the city code that applies strictly to ridesharing services is costing more than a successful U.S. Senate campaign.

That is, er, friggin’ crazy, but it also helps reveal the stakes here. That money could certainly pay for a whole lot of fingerprint background checks that Uber and Lyft say are such an onerous burden (202,500 of them, to be exact, at $40 a pop), but it’s not really about whether fingerprinting is too expensive of a process to keep Uber and Lyft profitable. The campaign, ultimately, is a matter of principle for the companies—and they’re not just spending the money to win in Austin, they’re spending the money to show other cities considering similar regulations that they’re in it to win it.

The “yes on Prop 1” forces—that is, the Uber and Lyft side of the battle—have outspent their opponents at a rate of 81:1. (That crushes the argument that the regulations were initially passed by city council as the result of campaign contributions from the taxi lobby—if Austin’s city council was bought and paid for for a few grand, Uber and Lyft clearly slept on a great chance for bargain shopping.) That’s a huge amount for an election in Austin, but it could be worth it to send a message to Los Angeles, Miami, Atlanta, Denver, and other cities contemplating a fingerprinting requirement that this isn’t a fight worth picking.

The fact that the fight over Prop 1 isn’t strictly about Austin is clear in other ways too. Opponents of the recall campaign note that, when fingerprinting requirements went into effect in Houston, Uber continued to operate in that city. So if they didn’t follow through in Houston, why would Austin be any different? That argument is harder to make now than it was just a week ago: Uber announced on Wednesday that it was considering leaving Houston if the fingerprint regulations there aren’t overturned. That threat comes without a specific timetable, but the timing of the announcement—just as the “Uber will leave Austin if the regulation passes” argument needed some more urgency—suggests that the strategy here is a lot more than local.

All of that is fascinating, but ultimately, the expenditures, lobbying, messaging, and gamesmanship at work here are only part of the puzzle. Is all of this enough to get people to actually vote?

Early voting totals have been quite robust in Austin. As the TM Daily Post notes, given the unanimous opposition to Prop 1 among the reliable-voter factions, some of that money Uber and Lyft have spent has been to bring out the less-likely voters, whom they hope are in their corner. They’re getting the turnout; whether those voters are indeed on their side, and if there’s enough of them, remains to be seen. Whatever happens in Austin, Houston is next in the spotlight. The Chron urges Mayor Turner to stand strong.

For too long, Houston’s ride-for-hire business was dominated by a taxi cartel that used restrictive ordinances to keep out competition. Uber’s arrival smashed that status quo and brought Houstonians a quicker, cleaner and cheaper free-market alternative to rickety taxis.

Sure, Uber willfully disobeyed local laws and used every trick in the book to put political pressure on City Hall, but it was worth it so that Houstonians wouldn’t have to wait two hours to learn that a cab wasn’t coming. In the end, City Hall hammered out a deal to remove the regulatory barriers that prohibited Uber from entering the market.

But apparently that wasn’t enough. Now, as Turner and council tackle a budget crisis, a pension mess and all the fallout of recent floods, Uber expects them to drop everything and put its bizarrely specific pet issue on the immediate agenda.

Don’t let them take you on a ride, Mayor Turner. Don’t give in to their threats.

In the world of political carrots and sticks, Uber deserves a good bop on the nose for its tone-deaf and entitled attitude towards our city.

As I said before, that will be easier to do if the Austin referendum goes down. I’ll post results on Sunday.

Finally, I received the following press release from Uber in my mailbox yesterday morning:

As the Houston City Council considers revising the City’s ridesharing ordinance, a poll commissioned by Uber indicates that the vast majority of Houstonians support modernizing the outdated rules.

In the past nine months, a growing number of Texas cities have adopted new ridesharing regulations that uphold strong safety standards while also preserving economic opportunity for Texans. According to a survey conducted by We Ask America, 73 percent of Houstonians support changing the rules to make them more in line with the rest of the state.

The poll also revealed that 72 percent of Houstonians believe people are less likely to drink and drive since Uber and other ridesharing services launched.

The survey was conducted of 1,015 likely voters in Houston using live interviewers from both landlines and cellphones. The margin of error was ±3.0 percent.

Sounds impressive! Here’s a copy of the basic poll data. The question about changing the ordinance reads thusly:

Houston has more regulations on ridesharing services than any other city in Texas, which has forced some companies to cease operations. Would you support the City of Houston adopting new rules that are more like other Texas cities to increase access to safe rides?

Response           Percentage

Supports changing      72.51%

Oppose changing        12.81%

Not sure               14.68%

Crosstabs are here. I daresay that one could garner a different percentage with an alternate but equally accurate question about the issue. It’s a good starting point for Uber, but it’s just that, a starting point. How the issue is presented matters greatly, and it’s why I called the forthcoming fight over Uber and Houston’s current ordinance a public relations fight. The side that gets to define the question to be answered is the side that will win. BOR has more.

GetMe waits in the wings

No matter what happens with the rideshare repeal referendum in Austin, there will be at least one vehicle for hire company in the capital city.

Early voting is underway in Austin on Proposition 1, where residents will decide which regulations the city should adopt for vehicle-for-hire companies like Uber and Lyft.

Both companies have pledged to leave the city if the proposed ordinance is not adopted — a claim they’ve made good on in three Texas cities this year. But at least one ride-hailing company insists it can fill the gap Uber and Lyft would leave behind.

“We’re not going to be the donkey or the elephant,” said Jonathan Laramy, the chief experience officer for Get Me LLC, which the company has stylized as getme. “We’re here to stay. Vote Prop. 1, vote Prop. 2 – we don’t care.”


Laramy said getme — which currently operates in Austin, Dallas, Houston and Las Vegas — is willing to adhere to any local regulations, as long as the process for obtaining fingerprint-based background checks is “fast, easy and cost effective.”

“We’re a good corporate citizen,” Laramy said, adding that the company is willing to collaborate with cities on their regulations.

While his company is still working out the specifics, Laramy said that “at some point, we will fingerprint all of our drivers” — even in cities without a requirement.

If Austin voters do not approve the proposed ordinance, Uber and Lyft have said they will leave the city — although The Daily Dot reported last week that Uber fully intends to stay, regardless of the outcome of the election. If the companies leave, Laramy said getme would be prepared to process a potential influx of driver applications.

“We have a platform where we could actually — and we already have this in place and ready to go — sign up conceivably 5,000 drivers in a month, if not more,” Laramy said. He would not elaborate on specifics of the plan, but he said it involved “using information that’s already been done and then verifying and showing us that.”

After starting up in Dallas in February 2015, getme recently relocated its headquarters to Austin. Laramy said it has more than 10,000 drivers across the four cities where it operates, more than 2,000 of whom are in Houston. The company boasts 6 corporate employees and a handful of contractors, making it a significantly smaller operation than ride-hailing giants Uber and Lyft.

Laramy says the company soon plans to offer services in Los Angeles, Denver, Chicago and Atlanta. In Texas, he said, the company is launching operations in Galveston next week and Corpus Christi this summer.

This follows Uber’s cessation of operations in Galveston and Corpus Christi earlier this year after both cities adopted fingerprint background check requirements. Laramy said getme’s interest in both cities was unrelated to Uber’s actions and that they had planned to launch in both locations well before Uber left.

“You can’t get home if you take a ride down there,” said Laramy, describing someone looking to travel between Houston and Galveston using getme. “It’s silly not to have both cities.”

See here and here for more on GetMe, which will likely get a little extra exposure here in Houston now as well. That Daily Dot report seems thinly sourced and contradicts everything we’ve heard so far, but who knows. Regardless of the outcome on May 7, I suspect there will be more than a few people in Austin looking for an alternative to Uber and Lyft, so whether they clear out or not, this is a smart move on GetMe’s part. Has anyone out there used them?

More on the Uber ultimatum

Initial reaction is not terribly receptive.


Ride-hailing giant Uber threatened Wednesday to stop operating in Houston unless city leaders amend local regulations the company said are making it tough for them to recruit drivers.

The ultimatum, the latest skirmish in what has been a contentious relationship between Uber and the city since it started operating here two years ago, drew a strong rebuke from city leaders.

“This is just not how we do business in Houston,” said Mayor Sylvester Turner, who added the city “will not compromise on public safety.”


The Uber announcement, which officials viewed as a threat to meet the company’s demands or lose the service, was met with frustration by city leaders, some of whom have grown increasingly exasperated by the tumult.

“If you don’t want to follow the rules we all agreed to, have a good opportunity in another city,” District E Councilman David Martin said. “But we cannot be blackmailed when it comes to public safety.”


Uber and its supporters argue that part-time driving for the company helps people make money while keeping rates for riders cheap.

The company in its report said drivers take an average of four months to sign up with Uber and complete the city permitting process. Houston officials said the longest a driver has waited is two months, and that the average time to clear the regulations is 11 days. About 47 percent of drivers received a license within a week, officials said.

“What they are putting out is factually incorrect,” Turner said, adding that he thought the company’s motive is to put pressure on politicians to capitulate.

See here for the background. I didn’t expect Uber’s announcement to be greeted warmly, but I am a bit surprised that no one stepped forward to defend them, or at least to criticize the fingerprint policy, in the story. CM Martin’s comment is of particular interest, since Uber’s main allies on Prop 1 in Austin are a couple of conservative Republican Council members there. I’ve look around at other coverage but have not seen any other reactions from Council members. I will be very interested to see who, if anyone, is in Uber’s corner on this. It was one thing to advocate for allowing Uber to operate here. This is a whole ‘nother level, and unless a Council member comes under pressure from constituents, it’s rather a large stretch.

The Press brings up another aspect of this fight.

Notwithstanding the curious timing (voters in Austin will decide May 7 whether to keep similar regulations; early voting for the ballot measure started this week), it’s hard to know what to make of Uber’s claims. Officials with the City of Houston insist that, by pretty much any trackable measure, Uber has been a resounding success here. The city’s Administration and Regulatory Affairs department says that every month it sees an increase in drivers who want a license to drive for the company. And, according to city officials, judging by the company’s revenue in Houston (under the regulations passed in 2014, Uber pays 2 percent of gross bookings to the city), Uber is doing quite well.

It seems there’s either fundamental difference of interpretation or someone’s not telling the whole truth. We’d love to get to the bottom of this, but here’s the problem: Uber has sued to block the city from releasing pretty much any internal data that could show whether Houston’s regulations have been a success or unreasonable burden for rideshares.

Lara Cottingham, deputy assistant director of the city’s Administration and Regulatory Affairs department, insists that Uber has had an undeniably good run here since the city began enforcing its rules for licensing drivers for so-called transportation network companies (or TNCs) like Uber, limo services and taxi companies. “The number of drivers is increasing, their revenue is increasing, everything seems to be working out for them very, very well,” Cottingham told us. “But because Uber sued us to stop us from releasing [those numbers], I can’t tell you how successful they are.”


While Uber claims it takes drivers on average four months to get a city license, Cottingham says that’s just not the case. She says that according to a survey the city conducted this spring (which, of course, she can’t release because of Uber’s lawsuit), nearly half of all drivers got their license within a week of applying – almost all (about 84 percent) had al license within three weeks of applying, she claims. Whatever the case, Uber’s Meridia said in the letter to city leaders yesterday that demand in Houston “continues to grow approximately twice as fast as our ability to onboard qualified drivers.”

Cottingham says the city has streamlined the process as much as possible, but what Uber’s really asking for – axing the city’s additional background check provision – isn’t an option.

KTRK also noted that some of the facts in dispute cannot be checked on either end. That makes this more of a PR battle than anything else. Do people, who clearly like using Uber’s service, side with them against the city and buy into the argument that needless regulation is making it impossible to operate? Or do they see the fingerprint requirement as a basic safety measure, which Uber should have no issue with complying? That seems to me to be the basic outline of the dispute, and it’s why I’m so interested in who Uber’s proxies will be in the fight. I’m sure Mayor Turner’s response to this has been along the lines of “I don’t need this $#!+ right now”. Who will be on his side? BOR has more.

Uber says it will leave Houston if it does not change its fingerprinting requirement

I called it.


Uber announced Wednesday that the company plans to cease operations in Houston if the city council does not repeal its existing regulations relating to vehicle-for-hire companies.

Houston is one of two cities in the country where Uber continues to operate despite a local requirement that its drivers undergo fingerprint-based background checks. Uber has recently left three cities in Texas for approving similar regulations and has threatened to do the same in Austin.

The company’s main competitor, Lyft, pulled out of Houston over a year ago in response to the new rules requiring its drivers to undergo fingerprint-based background checks. Uber had continued to operate in the city while publicly criticizing the regulation as burdensome.

“We have worked hard and taken extraordinary steps to help guide drivers through the current process in Houston,” said Uber General Manager Sarfraz Maredia in a letter to Houston City Council on Wednesday. “However, a year and a half later, it is clear the regulations are simply not working for the people of this city.”

Uber also released a report Wednesday detailing, “The Cost of Houston’s Ridesharing Regulations.” The report claims Houston’s regulations have led to a decrease in Uber drivers and in turn, “fewer safe rides.”

Here’s Uber’s press release, their letter to Council, and the report mentioned in the story. Before I get into any details, here are some further news bits. First, from the initial Chron story.

No departure date has been set, Uber spokeswoman Debbee Hancock said.

“We have not set a specific deadline,” she said. “We want to work with the city to develop regulations that work for riders, drivers and the entire community. We understand this process may take a few months.


Meanwhile use of Uber in Houston surges, something both sides have said bolsters their case. The city argues use means Uber is profitable even with the regulations, though the company says they stifle supply of drivers.

From the Statesman:

The company does not disclose to the media or public how many drivers it has working in Houston, and it obtained a court order preventing city of Houston officials from releasing that information. (Lyft does not operate in Houston.)

The report released Wednesday by Uber includes a chart purporting to show drivers-per-million residents in Houston, Austin and Los Angeles, and the chart is presented in such a way as to imply that Austin (with no fingerprinting required until Feb. 28) has many more drivers per million residents.

But the chart has no numbers listed on its vertical scale of drivers per million residents, rendering it qualitative in nature, not quantitative. Given that and the company’s refusal to release driver figures, it is impossible to confirm the company’s claims about driver supply there.

The letter and report do not mention that Houston has a process under which a driver can get a 30-day “provisional” license without first going through fingerprinting. But according to Uber, a Houston driver, even to get that provisional license, must complete a physical, take a drug test, appear at Houston municipal court to get a check of outstanding criminal warrants, buy a fire extinguisher for the car, get his or her car inspected by a city inspector and get an Uber identifying marker for the car.

From the Houston Business Journal:

According to the letter and a corresponding report on Uber’s Houston operations, 59 percent of its Houston fleet drives less than 10 hours a week. That’s compared to 79 percent of drivers in Austin, and 77 percent in Houston’s outer limits. Uber argues that for these part-time drivers, the regulations are too oppressive and prevents new drivers from signing up.

Mayor Turner held a press conference yesterday at 4 to give his reaction. The Chron story that contained it was updated too late for me to see it last night, so I’ll do another piece tomorrow to discuss that. Click2Houston reports him saying he was “surprised” and that when he had last spoken to Uber reps a few months ago they gave no indication they were dissatisfied; I received another statement from Uber later in the day that takes issue with that, but I’ll get to all that tomorrow. The one thing that surprises me about this is that Uber announced it before the results of the Austin referendum are known. I had assumed they’d wait and pounce if they were successful in repealing Austin’s ordinance; if they failed, I figured they’d still make some move in Houston, but they might be more circumspect about it. Winning the referendum in Austin gives them leverage, which I strongly suspect is part of the point. Maybe this is a show of confidence on their part, maybe it’s just bravado, or maybe this was the plan all along. Who knows?

There are three logical ways Houston can go with this:

1. Do what Uber wants, which would surely have the effect of bringing Lyft back as well. That would not be my first choice, but if Prop 1 passes in Austin, there may be a lot of sentiment here for that.

2. Stand pat and let Uber do what it’s going to do. Get Me is operating in town, so it’s not like there’s no vehicle for hire alternative. One could argue that Uber’s abandonment of many Texas cities, potentially including Austin, would pave the way for another competitor to arise. The demand clearly exists for this service, and opportunities like this don’t come along every day. This is a better strategy if Prop 1 fails, and the bigger the margin the better. It also assumes a commitment to ensuring that no legislation that pre-empts local rideshare ordinances gets passed in the 2017 Legislature.

3. Try to negotiate a compromise. I still kind of like Austin Mayor Adler’s proposal for voluntary fingerprinting, which then becomes part of a driver’s profile and which customers can request. Let’s see what the free market has to say about that, shall we? There are certainly other possibilities, and again, this is likely to be more feasible if Prop 1 goes down.

Anyway. I don’t know as I write this what Mayor Turner had to say beyond his surprise, nor do I know what the prevailing opinion on Council is. Whatever the case, I’m sure this will be a big part of the discussion over the next few months, which I’m sure is exactly what the Mayor wanted given the forthcoming budget battle, the ongoing flood cleanup, the continuing search for an HPD chief, and everything else on his agenda. Well timed, Uber.

Endorsement watch: Against Prop 1

The Statesman urges a vote against the divisive referendum to repeal Austin’s ordinance regulating transit network companies like Uber and Lyft.


Voting against Prop. 1 is the best way to ensure that Lyft, Uber and other ride-hailing service drivers, undergo the most thorough criminal background checks endorsed by law enforcement: fingerprint checks. By contrast, Lyft and Uber are demanding name-based background checks. Prop. 1 would accomplish that by eliminating fingerprint checks. But you won’t see or hear mention of “fingerprint checks” in ads or fliers Uber and Lyft are floating.

You also won’t hear or see an equally important issue at stake in the May 7 election: Whether it should be corporations or Austin’s elected leaders that write the rules for doing business in the city. That power, in our view, should remain in the hands of the democratically elected officials who represent Austin residents — not private companies with deep pockets. Voting against Prop. 1, crafted by Lyft and Uber, keeps that authority with Austin’s elected City Council.

On those terms, the question on the ballot is relatively simple, but the issues are being cleverly camouflaged in the high-dollar ad campaign being waged by Lyft and Uber through the companies’ political action committee, Ridesharing Works for Austin. Lyft and Uber contributed $2.2 million to the group — an unprecedented amount for an Austin election. The primary group opposing Prop. 1, Our City, Our Safety, Our Choice, reported raising and spending less than $15,000.



Over the past months, Lyft and Uber have used various messaging to drive support for their Prop. 1. Initially, the companies threatened to bolt if the City Council required fingerprint checks. Then they said approving Prop. 1, which eliminates fingerprint checks, would keep the companies operating in the city.

Their step away from that message might signal that the public favors fingerprint-based background checks or is divided over that point. Either would be risky for Prop. 1.

Certainly a city like Austin needs as many transportation options as possible, so if Lyft and Uber left it would greatly diminish the ability of Austin residents to move around in an increasingly congested city. And no one denies that Lyft and Uber contribute to public safety in taking drunk drivers off the road. That is why we urged the City Council to compromise with Lyft and Uber through incentives or other voluntary measures to get drivers to undergo fingerprint checks — rather than requirements.

The council could modify its current ordinance to work toward that goal. But if voters approve Prop. 1, fingerprint checks will be eliminated and Lyft and Uber will have little — if any — incentive to compromise.

For all of those reasons, as well as the other safety requirements that would be eliminated by tossing out the current ordinance and replacing it with Prop. 1, Austin residents should reject Prop 1.

See here for some background. I basically agree with everything the Statesman editorial board says and would vote No if I were in Austin. I also continue to believe that if Prop 1 passes, it’s just a matter of time before Uber takes action to eliminate Houston’s fingerprint requirements. I would very much rather not see it come to that.

In his email newsletter, Ed Sills of the AFL-CIO echoes some of these concerns and provides a bit of on-the-ground reporting:

My family has come to cherish and dread (“dreadish”?) the half-dozen calls from “Research Center” each day over the last few weeks. My wife made it clear to the Uber folks that we are unalterably AGAINST the ordinance, but evidently they noticed there are four voters in our household, so we seem to be getting four times the calls. My personal technique in answering these calls is to count to two during the delay and hang up at the moment a live voice comes on. I figure the more time they spend trying to contact a household where they are about to go 0-4, the less time they can spend talking to people who are gullible enough to believe the lies spewed in this Rich Uncle Pennybags campaign.

I have never done a block-walk as overwhelmingly locked in as the one my daughter and I went on Saturday in the Highland neighborhood in Austin, and I have walked some great progressive neighborhoods in contested elections. Nor have I ever previously experienced multiple situations in which folks were staring daggers at us until they realized we were in agreement – and then greeted us as old friends and took signs. (At one point, I told my daughter to go talk to a 78-year-old woman – her first solo encounter on a block-walk – while I knocked the house across the street. “You can probably outrun her if you have to,” I explained. When I stole a glance, the woman was practically giving Graciela a hug.)

I have never before done a block-walk in which all I had to say to get a commitment was, “Don’t you hate those ads on television?” And people still held forth on the merits about why they can’t stand what Uber and Lyft are doing.

Thank goodness I didn’t have to explain every nuance of the ordinance approved by the Austin City Council, which sets standards for fingerprint checks, fees to be collected from ride-share companies, etc. People understand the proposed ordinance written by Uber and Lyft relaxes the background check standard and lowers the fees the companies have to pay. But this is one of those rare political situations in which while the details may matter, all you absolutely have to know is that the proposal at hand is, well, Horse Feathers. (Trust me, Groucho Marx lovers, you want to click on this link.)

A large majority of voters we spoke to get that a fundamental principle is in play. If Uber and Lyft can spend millions to write their own ordinance in Austin, they will be trying the same thing next in Houston, which adopted strong fingerprinting requirements for drivers. And regardless of how that goes, Uber and Lyft will be at the forefront of the right-wing move in the Texas Legislature to take away the ability of local governments to make progress not just on ride-share regulation, but on wages, discrimination and work rules. A success by Uber and Lyft would launch a parade of corporations that would weigh options and budget millions more to overturn local laws that offend them.

The try-anything attitude among supporters of Prop 1 has continued. The Austin Chronicle reported that the U.S. Chamber of Commerce warned Austin may jeopardize its “Smart City” initiative if voters turn down the Uber/Lyft ordinance rewrite. Apparently the bald-faced lie in the pro-Prop 1 ads that Austin taxpayers would suddenly be on the hook for fingerprint checks if they vote “no” wasn’t working.

This election is about a larger issue – the ability of local voters to control their local destiny.

Sills notes that this is no prediction of victory, and that turnout in an oddball special election is paramount. It’s all about who shows up. I for one would rather live in a world where this sort of thing fails. I hope I have enough company in that regard.

An outside view on Uber in Houston

The Statesman looks at how Austin’s fight with Uber and Lyft over fingerprint requirements compares with other cities in Texas, including Houston.


Officials in Houston said they decided early on that their city, despite having almost 2,500 licensed taxis, could benefit from the emerging ride-hailing industry. So they approached Uber and Lyft a few years ago and began to try to work out a framework for operations there.

That stringent framework, including a requirement for fingerprinting, drug testing, physicals and vehicle inspections, passed the Houston City Council in August 2014, just two months after Uber and Lyft had more or less barged into Austin and set off a furor by operating in defiance of city law. At first, Houston officials say, Uber officials had nothing but praise for the new law and worked with Houston to set up procedures and a facility for licensing of ride-hailing drivers.

Lyft, however, left town. That company operates in only one place that requires fingerprinting: New York City.

The Houston law took effect in November 2014, and the city’s permitting center in downtown Houston, along with a temporary off-site location to handle an initial rush of drivers, began operations, said Lara Cottingham, Houston’s assistant director of administrative and regulatory affairs.

Drivers can get a 30-day provisional permit without fingerprinting, Cottingham said, although they do need to undergo the physical, drug test and a check for active criminal warrants. Then, within that month, the drivers would have to be fingerprinted and pass the background check to get a two-year ride-hailing license.

Getting a provisional license at the agency’s Houston office, can take as little as 20 minutes, Cottingham said. The process of being fingerprinted and getting background results from the FBI, which can be done during those 30 days after the applicant is already driving, can take three to five days, she said.

Uber spokeswoman Jenn Mullin contends that jumping through those hoops can take several weeks and that it has been a noticeable deterrent to becoming a driver for the company. That, in turn, has increased waiting times for rides well beyond the average 3-minute wait that Uber customers see in Austin, she said.

But testing this assertion is difficult. Mullin declined to provide driver or wait time figures in Houston. And the company has resisted, through the courts, any attempts by the press and public to find out how many drivers have Houston-issued ride-hailing permits.

When Uber lobbyist Adam Blinick testified in December before the Austin City Council, [Austin City Council Member Ann] Kitchen asked him why the company was resisting fingerprinting in Austin but operated with it in Houston.

“Houston has been a very difficult city for us to operate in,” Blinick said. “It requires a lot of resources. It does not scale to a good quality of service.”

So, Kitchen asked, would Uber be leaving Houston anytime soon?

“I’m not in a position to answer that tonight,” Blinick said.

That’s a question I’ve been pondering too, as you know. I feel like if Uber and Lyft win this election in August, the issue will come up again in Houston whether Mayor Turner and Council want it to or not. The article also looks at the experiences in San Antonio and Midland, where Uber backed out after an agreement had been hammered out, so go read the whole thing.

Get Me goes to Galveston

Swooping in to fill the gap left by Uber’s departure.

Galveston is close to getting app-based transportation back.

Get Me, a Dallas-based company that started serving Houston in October, has submitted an application with Galveston to provide ride services on the island, city spokeswoman Kala McCain said Monday.

Galveston has not had any competition to cabs since Uber – the most popular ride-hailing service – left the city over its decision in February to regulate the company exactly as it does taxi firms. The loss of Uber was predicted to mostly hit tourists, especially the cruise lines.

Get Me, which provides both ride and delivery services via smartphone app, has started Galveston’s application process, McCain said. Licensing is a multi-step process that includes providing detailed insurance and licensing information.

“It is my understanding everything is going well,” McCain said, saying the company could be operating in a matter of a few weeks.

Get Me is a new entrant on the scene, operating in a handful of places so far. Galveston was recently dumped by Uber, so this is an opportunity for them to come in and have this market to themselves. They have said that they will comply with municipal ordinances that mandate fingerprinting as part of the background check process for drivers, so that opportunity for them is potentially lucrative, especially if Austin rejects that referendum to repeal its ordinance. Has anyone used Get Me? I’m curious what you think, in particular how the experience compares with Uber and Lyft.

Lots of money being spent on the Austin Uber/Lyft ordinance referendum



David Butts, meet Goliath.

Campaign finance reports filed Thursday for Austin’s ride-hailing services election show a beyond-massive lead in money for Ridesharing Works for Austin, the Uber- and Lyft-backed political action committee supporting a proposed ordinance that would become law if Proposition 1 passes on May 7.

Ridesharing Works reported that between Jan. 1 and March 28 it raised $788,750 in cash contributions and received $1.38 million in in-kind contributions, all of it from Uber and Lyft. The report says the committee spent $781,251 during that period, the bulk of it on Block by Block, a Washington company that conducted the petition drive that led to the May 7 election.

But that understates the costs already incurred. The in-kind contributions — huge consulting fees paid directly by Uber and Lyft as well as lodging, travel and staff time from both companies — were all expended before March 28 as well.

That means that, with more than five weeks left in the campaign, Uber and Lyft have already plowed $2.16 million into the Prop. 1 campaign. That already dwarfs the $1.2 million Mayor Steve Adler spent to get elected in 2014, up to now the gold standard for spending in an Austin municipal election.

The primary group opposing Prop. 1 reported raising and spending less than $15,000. Butts — a consultant who spent Thursday afternoon hammering in yard signs for the Our City, Our Safety, Our Choice political action committee — said he hopes to raise $100,000 by May 7, less than 5 percent of what the other side has spent already.



Chelsea Wilson, a Lyft spokeswoman, said in an emailed statement that the heavy spending is necessary to avoid voter confusion about what is at stake.

“Unfortunately, the ballot language voters will see on May 7th is extremely misleading,” Wilson said, “and we will continue working to ensure that people have all the facts about this election.”

Uber contributed $387,750 in cash and made about $905,000 of in-kind contributions, including more than $450,000 on “consultant fees for campaign strategy.” Lyft made $401,000 in cash donations and nearly $475,000 of in-kind contributions.

Butts said that what Uber and Lyft are putting into the election indicates a lack of confidence that the public supports their cause.

“They see their own polls, and it obviously can’t be that great,” Butts said.

Our City, Our Safety, Our Choice reported just $12,459 in cash and in-kind contributions, and $8,560 in loans, all of that from Butts and Dean Rindy, another political consultant working to defeat Proposition 1.

That sure is a lot of money for any kind of municipal election, and that’s not even counting the cost of conducting the election, which the Trib pegs at $500K. Uber and Lyft drew a line in the sand here, so it’s not a surprise that they’re going all out to win. I’m sure they’d prefer to operate in Austin, which is as amenable a market for their services that they’re likely to find in the state, and they would like even more to make an example of it. If they get what they want here, that gives them a fair amount of leverage in other cities. Losing would also be a pretty big disaster for them. I keep thinking this issue is going to come up again in Houston one way or another. The chances of that a much greater if Uber and Lyft win this fight.

If I were in Austin, I would likely vote against this referendum. I don’t like the idea of companies overriding the normal legislative process like this, and as I’ve repeatedly said here, I disagree that including fingerprint checks is an unreasonable burden on Uber and Lyft. The existence of Get Me, which offers similar ride for hire service and which has said they will comply with fingerprint requirements, is evidence of that. That said, the void that Uber and Lyft would leave in Austin is non-trivial. Austin On Your Feet explains why tat city’s situation pre-Uber and Lyft was so ripe for disruption.

Finding a taxi in Austin when you needed one was hard. At 2:00 AM on Friday and Saturday nights (closing time for bars), throngs of downtown revelers used to line up desperately searching for cabs. Many folks had to wait until the first wave of cabs had already driven to the suburbs and back. Others gave up and either drove home intoxicated, took unpaid rides from strangers, or hired unlicensed cabs. Since Uber and Lyft have arrived, the number of people offering rides for money and the number of paid rides have both risen dramatically, showing that the demand was always there, but couldn’t be provided for with the limited number of taxis the city permitted.

Uber and Lyft vary their prices for a variety of reasons. They use sales and first-ride discounts to promote their services; they use temporary price hikes to motivate drivers to get on the road at times of high demand. Given the city-mandated taxi shortage, taxi companies could have used similar tactics to build ridership at down times and motivate all their drivers to drive at times of highest demand. Except the city doesn’t allow taxicabs to change their prices except by act of City Council. The tools that Uber uses to provide reliable service aren’t available to taxis.

Ever wonder why, when riders and drivers both complain vigorously about the existing taxi companies, no other company came into existence and tried to lure drivers away to work for them instead? After all, Uber and Lyft are constantly fighting for each others’ drivers. The city only grants franchise agreements to three companies and limits the number of drivers for each, so they have no incentive to compete for drivers. As a member of my neighborhood association, I’ve met with people looking to start a new taxi company. Unfortunately, all their time was spent on the politics of convincing City Council members to allow them to serve customers rather than the actual logistics of serving customers. Starting a business is hard enough; starting a business that requires political approval before you are allowed to operate is a step too far for most people.

With the city-mandated taxi shortage, you might expect people to get more rides from slightly differentiated services like prearranged ride companies (called limousine service, but not limited to stretch limos). However, the city code includes many rules with no conceivable consumer benefit. For example, limo services are forbidden from charging less than $55/hour, must wait half an hour before providing service, and must keep trip tickets proving both of those facts.

That’s a terrible status quo, and as someone who supports efforts to enable people to live without (or with fewer) cars, having convenient options like Uber and Lyft are necessary. I don’t envy anyone the decision they have to make for this. Mike Dahmus and Austin Teacher Dad, both of whom will vote for Prop 1 but for different reasons, have more.

Uber settles California fingerprints lawsuit

Noted for the record.


Ride-hailing company Uber will pay at least $10 million to settle allegations by California prosecutors that it misled passengers about the quality of its driver background checks.

The settlement was signed Thursday in San Francisco, where Uber is based and where the district attorney led a lawsuit that said Uber falsely claimed its criminal screening of would-be drivers was the most comprehensive available.

San Francisco and Los Angeles prosecutors sued in 2014, saying Uber’s background checks were inferior to what taxi drivers undergo because they did not include fingerprint checks for past convictions. Instead, Uber’s process relies on a name search of other criminal databases and motor vehicle department files going back seven years.

Uber has defended the safety of its service amid a steady stream of allegations that its drivers have assaulted passengers, or, in the case of a driver in Michigan earlier this year, killed people. The app lets passengers share their location in real time, Uber points out, and the person who booked the ride is required to rate the driver after each trip, helping weed out unsavory characters.

Under the settlement, Uber agreed to pay $10 million within 60 days. If the company does not comply with the terms over the next two years, Uber would have to pay an additional $15 million, prosecutors said.

Uber did not admit wrongdoing, as is standard for such settlements, and said it already has made many changes prosecutors sought.

For example, Uber stopped claiming its background checks were “industry leading” when it settled a separate case brought by riders. Under that $28.5 million settlement reached in February, Uber also renamed its “safe ride fee” as a “booking fee.”

Prosecutors ratcheted up pressure on the company in August, expanding the lawsuit with claims that Uber failed to uncover the criminal records of 25 California drivers, including several registered sex offenders and a convicted murderer.

This has been a hobbyhorse of mine for awhile as you know. I’ll stipulate that fingerprint background checks aren’t the be-all and end-all. Fingerprinting has its flaws, and not everyone who would be flagged by such a check represents a real threat. Ideally, there ought to be a risk assessment aspect to this, to separate the truly dangerous people from those who just need to explain themselves. The point I have been making is that I don’t believe Uber’s process is sufficient, and there’s plenty of evidence to suggest they could do a better job of it. I believe that task needs to be done by someone else, as I just don’t believe that it’s something Uber truly takes seriously. At some level, why should they put more effort and resources into doing background checks than they have to? They can always fall back on the claim that the drivers aren’t actually their employees, so they’re not really responsible for what they do. Sure that may eventually catch up to them, but when you’re valued at $60 billion or so, you’ve got a pretty big cushion.

Honestly, if making fingerprint background checks mandatory is a bridge too far, then I like the compromise idea floated by Austin Mayor Steve Adler: Let the drivers undergo such a check voluntarily, and make whether or not they have done so a part of their driver profile. Let Uber and Lyft customer specify that they want a driver who has undergone this extra level of scrutiny. Anyone want to bet against the proposition that the free market will overwhelmingly prefer to be driven by this latter group? CNN, the Mercury News, the LA Times, and the NYT have more.

Lubbock to consider rideshare ordinance

You know what that means.


Uber drivers may soon be required to have background checks and operational permits in the city of Lubbock, a move that in the past has prompted the company to pull out of some Texas cities.

Uber is a technology company that provides a mobile phone app connecting riders with drivers. The company launched in Lubbock in late June 2014. With Uber’s app, riders can ask a driver to pick them up and take them where they need to go, with all transactions done over the phone.

Councilwoman Karen Gibson has been working with city staff to update the city code of ordinances to account for ride-sharing companies like Uber and Lyft, which she said have been operating illegally in the city since their inception.

It’s an issue officials at Lubbock Preston Smith International Airport say they also hope to tackle, as Uber drivers currently aren’t being asked to follow the same rules as licensed cab and limo services, said Kelly Campbell, administrative director at the airport.

After multiple discussions since stakeholders — including representatives from Uber, local taxi companies, police and city officials — first met in July 2014, Gibson said she intends to introduce an amending ordinance at the second City Council meeting in April that puts similar restrictions on transportation network companies as to those already placed on local taxi and limo companies.

“It’s more of a blanket ordinance that encompasses everybody. If they want to operate under that blanket, they will be able to operate here,” she said. “This is necessary for public safety. We live in a college town, we’ve got moms and dads in Dallas sending their daughter here and they expect us to make sure it’s safe.”


The city’s code states taxi and limo drivers must apply for an operator’s permit, furnish the city a sufficient performance bond, make sure the car is inspected, have a background check and minimum liability insurance of $50,000.

The amended ordinance will place transportation network companies like Uber and Lyft under the same guidelines as the other businesses.

“We’ve been following everything from coast to coast that’s been going on with these new market models,” Harris said. “We’re trying to find out a good way to address those types of industries within our code and allow them to operate, basically, legally.”

A spokesperson for Uber declined to comment to A-J Media until the company is able to review the ordinance.

But looking at cities that have passed similar regulations, Uber’s typical response has simply been to leave.

See here and here for more on the places Uber has recently abandoned. Of interest here is that the word “fingerprint” doesn’t appear anywhere in this story. That’s been a point of conflict in other cities, but it’s not the only one. In the first link from that previous sentence, I solicited a statement from Uber that said they had “made the difficult decision to cease operations in every city that has adopted new laws that require similarly​ duplicative r​egulations on drivers”, which was a reference to the Houston ordinance. They cited “Beaumont, San Marcos, College Station, and Abilene” as the cities they want others to emulate. That doesn’t sound like what Lubbock is doing, so we can expect Uber to respond as they have in cities like Corpus, which is to say they will close up shop. (Though now apparently COrpus is reconsidering.] We’ll see how it goes.

Supreme Court declines to intervene in Austin Uber referendum

Who knew they could do that?


The Texas Supreme Court on Monday declined to order the Austin City Council to rewrite the ballot language on the proposed ride-hailing ordinance that will go before voters May 7.

Austin music manager Samantha Phelps, working in conjunction with Uber, last week filed a petition for a writ of mandamus, asking the court to require new ballot wording because the council-approved language “is purposefully skewed to persuade the public to vote against the proposition.”

The city said the language was factual and not misleading, and that for a court to require new wording, Phelps would have to prove the City Council took an “arbitrary and unreasonable” action. Though the council approved the language in February, Phelps waited until just before Travis County was set to lock down the ballot language to file her petition, the city said.

The court issued an order denying the petition but did not release an opinion Monday.

“We made every effort to make sure the ballot language fairly represented the petition, so today the Supreme Court denied Uber’s attempt to overturn that language and affirms what we did,” Council Member Ann Kitchen said.


Austin elections attorney Buck Wood said there is no way to appeal the court’s order, as it is “purely a state law matter” and not a federal issue. Wood said he was not surprised by the decision.

“I suspect the lateness of it probably swayed some votes,” Wood said, noting that it took “three weeks” for the petition to be filed.

See here for the background. An Uber spokesperson is quoted in the story saying that the court’s order “was not a ruling on the merits of the ballot language”, which says to me that there may yet be further litigation if the referendum does no pass. Isn’t this fun? The Trib and the AusChron have more.

Uber to abandon Corpus Christi

Another one bites the dust.


In what has become a familiar move for Uber, the vehicle-for-hire company announced Wednesday it will cease operations in Corpus Christi, pointing to “unnecessary” regulations recently adopted by the city.

Corpus Christi’s City Council approved new regulations this week that would require app-based vehicle-for-hire drivers to undergo a fingerprint background check, a requirement Uber has resisted in most markets. The company plans to end services in Corpus Christi on Sunday, two hours before the new law goes into affect, according to the Corpus Christi Caller Times.

“The proposed ordinance would require drivers to complete unnecessary and duplicative steps that make it difficult for them to earn extra money and hurt our ability to ensure that riders have access to reliable and affordable transportation,” Sarfraz Maredia, Uber’s general manager in South and East Texas, wrote in a letter to Corpus Christi’s city council on March 4.

Corpus Christi will be the third city Uber has left this year in response to local laws. In February, the company ceased operations in Galveston and Midland after the cities voted to enact background-check requirements.


Despite Uber’s disdain for mandatory fingerprint-based background checks, the company has continued to operate in Houston, where drivers are required to undergo those background checks.

Corpus Christi Mayor Nelda Martinez said she feels Uber is more lax when it comes to accepting regulations in larger cities. Houston is Texas’ largest city with over 2 million residents. Corpus Christi, with a population of around 316,000, is the eighth largest city in Texas.

“It is unfortunate that they believe that comprehensive background checks with fingerprints and safety in smaller cities are less important,” she said Wednesday. “We have been working with them since the fall of 2014 and what makes me most sad about them leaving Corpus Christi is that they are leaving loyal customers and drivers who depend on them.”

Martinez said she would welcome the company back in the future, but would “absolutely not” consider softening the ordinance.

So the pattern is pretty clear here – your city can have fingerprint checks, or it can have Uber, but not both. Unless your city is Houston, apparently. But how long will that be the case? With that in mind, I sent the following questions to Uber spokesperson Debbee Hancock:

1. Is it now Uber’s policy to no longer operate in cities that require fingerprint checks?

2. Does this mean that Uber plans to pull out of Houston? if not, then how does Uber respond to Corpus Mayor Martinez’s statement that “Uber is more lax when it comes to accepting regulations in larger cities”?

And the answers I received:

We know from our experience in Houston that these rules can have a devastating impact on our ability to provide the experience that drivers and riders have come to love and expect. ​Since then, we have made the difficult decision to cease operations in every city that has adopted new laws that require similarly​ duplicative r​egulations on drivers.

We have also made a major shift in our expansion strategy.​ At the beginning of 2014, the only people in Texas that had access to Uber were the people of Dallas. With a goal of making transportation as reliable as running water, we rapidly expanded our operations across the state. Today, millions of Texans in more than a dozen cities can open the app to request a ride.​ ​

Most cities have rapidly embraced this innovative transportation option. In fact, multiple cities where we did not already operate, such as San Marcos and Beaumont, invited us to launch by​ proactively​ adopting pro-ridesharing regulations. We have limited our expansion plan to cities that adopt similar regulations as Beaumont, San Marcos, College Station, and Abilene.

We have been monitoring the impact these regulations are having on riders and drivers, and we’re concerned by the trends we see (barriers to entry for drivers, longer wait times, fewer available rides late at night when people need it most , etc.). It is no surprise that these regulations don’t work for ridesharing since they were designed for the taxicab industry long before this technology existed. It is our hope that we can work with the City to modernize the process so we can continue to operate in Houston.

So there you have it. I’m just speculating here, but if the Austin rideshare referendum passes, I won’t be surprised if we see some action in Houston afterward.

Turner names interim HPD chief

Congratulations, Chief Montalvo.

Mayor Sylvester Turner has tapped 36-year Houston Police Department veteran Martha Montalvo to lead the department while his team conducts a nationwide search for a new permanent chief.

Montalvo, 56, has served as chief of staff to outgoing Chief Charles McClelland and has held the rank of executive assistant chief since 2004, the first Hispanic woman to serve in that capacity in HPD history. On Thursday, she became the department’s first Hispanic chief.

“Chief Montalvo has a wealth of experience that will serve the department and the citizens of Houston well,” Turner said.

“She also understands that all city departments will need to share the sacrifice in balancing the budget for the coming fiscal year. I look forward to working with her on solutions that will generate the cost savings we need without impacting the police protections our citizens deserve,” Turner added.


Montalvo said the announcement was an emotional moment for her, recognizing that she has become the first Hispanic chief in the department’s history.

“The message I want to get across is that the opportunities exist if you work hard, and just don’t give up,” she said. “It’s possible. The department in 35 years has changed quite a lot, and I’m an example of that.”


A native of Ecuador who immigrated to Houston with her parents at age 5, Montalvo was raised on the city’s east side, became a United States citizen at 18 and entered the police academy in 1980.

She has worked in the patrol, communications, training, jail and homicide divisions, and was promoted to assistant chief in 1998 and executive assistant chief in 2004.

Montalvo oversaw the implementation and operation of red-light cameras, which voters banned by referendum in 2010. She developed the Crime Analysis System Enhancement, an information system containing mapping software with crime and prevention applications.

Montalvo also was responsible for overseeing the department’s troubled fingerprint analysis lab from 2004 to 2008.

Audits showed HPD failed to update equipment, provide adequate training or communicate effectively with lab staff, leading to a 2009 scandal over workers making technical errors in analyzing prints; three employees were put on leave and one resigned, and consultants were hired to take the lab over.

That last bit is a tad disquieting. I can’t say I followed that story, so I don’t know how the blame for that was apportioned. In any event, the story indicates that while Mayor Turner has a national search going on for a new chief (with no specific deadline for naming one), he is supposedly leaning towards choosing from within, so Chief Montalvo would seem to have the inside track. We’ll see when the search team presents its recommendations. Best of luck in your new gig, Chief Montalvo. The Mayor’s press release is here, and the Press has more.

Austin will vote on rideshare ordinance revision

The month of May just got a lot more interesting.


Let the people choose how to regulate Uber and Lyft, a divided Austin City Council decided late Thursday.

The council, on a 2-8-1 vote, declined to adopt an ordinance underlying a petition drive that organizers said gathered more than 65,000 signatures. Under city rules about petition initiatives, that means that the city must hold an election on that ordinance May 7.

Council Members Sheri Gallo and Ellen Troxclair voted to adopt the ordinance, put forward through the petition drive earlier this year. Council Member Don Zimmerman, although he supports the ordinance and signed the petition, abstained. The election, the Austin city clerk estimated, will cost the city between $500,000 and $900,000, depending on whether some local school districts choose to hold elections at the same time.

The choice in May for voters will be between the petition ordinance, similar to Austin’s ride-hailing law that has been in place since October 2014, or, in effect, one passed by the City Council in December that in a year’s time would require virtually all drivers for Lyft and Uber to have passed fingerprint-based criminal background checks. The petition ordinance specifically says that drivers will not be subject to fingerprinting, instead undergoing the company background checks that are based on identifying documents like driver’s licenses and Social Security numbers.

The choice also, if the companies are to be believed, will be between having or not having Uber and Lyft operating in Austin. That would leave only GetMe, a small Austin-based company new to the peer-to-peer transportation business, to offer app-based rides here. That company has said it will abide by the city’s December law, which will go into effect Feb. 28.

A “yes” vote by the public May 7 would wipe out that ordinance.

“It’s going to be an expensive fight,” said Tom “Smitty” Smith, executive director of Public Citizen in Austin. “But sometimes you have to stand up to the bullies.”


The council, on a 4-7 vote, also rejected an alternative ordinance put forward by Mayor Steve Adler that would have been similar to petition ordinance, but would have required transportation network companies to pay the city 2 percent of its annual revenues to fund an incentive program for drivers to be fingerprinted.

See here and here for the background. Given all the noise that Uber and to a somewhat lesser extent Lyft are making in other cities that have tried to pass ordinances that regulate vehicles for hire, even ones that didn’t require fingerprints, this election is going to set a precedent. If Uber and Lyft get what they want in Austin, I feel confident they’ll try to do the same in other cities. If not, I don’t expect them to stop trying, but they’ll have to rethink their approach. Either way, the case for statewide regulation, in particular statewide regulation that requires fingerprint checks, takes another step forward.