Uber and Lyft plan to turn their apps off in Austin on Monday now that they have lost a multi-million dollar campaign effort to reverse stricter regulations approved by the city council in December.
With all 88,168 votes — or 17.3 percent of registered voters — counted, 55.8 percent of voters opposed the Proposition 1 ballot question, which sought to reinstate the less strict regulations that Uber and Lyft operated under between 2014 and early 2016. Despite a flood of ads on TV, radio and other media, the Ridesharing Works for Austin campaign, funded exclusively by Uber and Lyft, had 44.2 percent of the vote.
Early voting turnout was strong in the election, with nearly 10 percent of roughly 509,000 eligible voters. And those votes mostly opposed Prop 1, with 56 percent opposing the measure and 44 percent in favor. That result held Saturday night in the final Travis County vote tally.
The results don’t require Uber and Lyft to leave Austin. But the companies have left other cities that required drivers to submit to fingerprint-based background checks, including San Antonio, Galveston, Corpus Christi and Midland.
Lyft has vowed to turn its app off at 5 a.m. Monday, while Uber told its customers it will cease operations at 8 a.m. Monday.
That leaves Get Me as the only major app-based ride-hailing service in Austin. The company has said it will rapidly sign up new drivers in hopes of fulfilling Austin’s demand, which had led to about 10,000 Uber and Lyft drivers servicing the city. But questions remain about whether the service will be able to handle the types of volumes that Uber and Lyft have had in the city, especially during major events like SXSW and ACL Festival.
Here are a few reactions from the Austin tech community and others who voiced opinions on Twitter after early voting results came in.
The people have spoken clearly tonight. Uber & Lyft are welcome to stay & I invite them to the table regardless. (1/2)
— Mayor Steve Adler (@MayorAdler) May 8, 2016
Next time I’m raising money in Silicon Valley I’ll have to answer “why is Austin so backwards?” Uphill battle already. Even worse now #Prop1
— Evan Baehr (@evanbaehr) May 8, 2016
If #Prop1 fails, Uber & Lyft will pull out and there will be a transportation crisis and massive pressure to compromise and bring them back.
— Joshua Baer (@JoshuaBaer) May 7, 2016
— Mike Maples (@m2jr) May 8, 2016
— Eugene Sepulveda (@EugeneAustin) May 8, 2016
— Cristina Parker (@cristiparker) May 8, 2016
— C.K. Chin (@seekaychin) May 8, 2016
— David Wyatt (@wyattbrand) May 8, 2016
Nothing but sadness for Austin tonight. Saw it coming. But a giant leap backward nonetheless.
— Mike Maples (@m2jr) May 8, 2016
— Paul O’Brien (@seobrien) May 8, 2016
“We hope they won’t leave, clearly this is a lucrative market,” Austin City Council Member Kathie Tovo told the Austin American-Statesman. “There’s no need for them to pull out on Monday.”
But in statements issued after the results were in, both companies affirmed they will leave Austin.
“Unfortunately, the rules passed by City Council don’t allow true ridesharing to operate,” wrote Lyft in a blog post. “Instead, they make it harder for part-time drivers, the heart of Lyft’s peer-to-peer model, to get on the road and harder for passengers to get a ride.”
Uber emailed a statement to reporters, affirming their decision to shut down as of Monday and expressing hope for a compromise with city officials. Uber says it will continue to operate in the greater Austin area, including Williamson, Travis (excluding Austin), Hayes and Bexar Counties.
The election has been watched nationwide as city and state governments consider new rules for Uber-style ride services, and it could be a pivotal election for Uber and Lyft as they battle to preserve their business against efforts to limit it with regulation.
If history is a guide, the companies will likely continue to pressure the Austin City Council — and the city’s residents — to back regulations that are more favorable to the companies. After San Antonio’s city council approved fingerprint-based checks and the company’s left, the council reconsidered its move and made fingerprints voluntary. Then, the companies returned.
Throughout the debate, Uber and Lyft have said that fingerprints slow down their driver sign-up process, which is critical to having enough drivers available to quickly respond to ride requests. That’s because many people cycle in and out of driving for the companies when they get new jobs or have saved up some supplemental income to reach their financial goals.
Ultimately, it appears that the aggressive and sometimes misleading campaign tactics that were bankrolled with more than $8 million from Uber and Lyft ran counter to the way Austin culture and politics work. The city’s powerful Democratic establishment opposed the measure, largely because it was seen as an overreach by multi-billion dollar companies that disagreed with a regulation approved by a mostly Democratic city council.
The confusing ballot language, which was approved by the city council, may have also played a role. Here’s what was on the ballot.
“Shall the City Code be amended to repeal City Ordinance No. 20151217-075 relating to Transportation Network Companies; and replace with an ordinance that would repeal and prohibit required fingerprinting, repeal the requirement to identify the vehicle with a distinctive emblem, repeal the prohibition against loading and unloading passengers in a travel lane, and require other regulations for Transportation Network Companies?”
The large early turnout, likely stoked by hundreds of media buys and text messages funded by Uber and Lyft, could be a sign that the historically large $8 million-plus the companies have poured into the campaigns is paying off. But it could also signal a passionate turnout by those who think the unicorn companies have overstepped by flooding the city with campaign ads and threatening to abandon the city over a seemingly small issue, having drivers submit fingerprints to the city and FBI for background checks.
Saturday’s election marked the end of a two-year controversy over how ride-hailing services are regulated in Austin. The city’s tech community largely supported Uber and Lyft in their fight to stave off new regulations.
Here’s a Timeline of This Debacle
- May 29, 2014 – Lyft launches in Austin.
- June 4, 2014 – Uber launches in Austin. Says “we want to be sure that we’re working with the city, not against it.”
- October 27, 2014 – Austin City Council legalizes Uber and Lyft.
- October 27, 2014 – The Statesman reports that top executives at cab companies have put more than $54K into city council campaigns.
- April 28, 2015 – Uber and Lyft sign 6-month deal to serve Austin Bergstrom International Airport
- May 15, 2014 – City council forms group to study ride-sharing services and come up with recommendations for operating legally in Austin.
- September 2, 2015 – City council resumes discussion over rules for TNC companies, proposing $1 per rider fee and fingerprint checks.
- October 6, 2015 – David Plouffe, formerly President Obama’s 2008 campaign manager, announces study results addressing Uber’s impact in Austin.
- November 5, 2015 – Austin Inno reports councilwoman Ann Kitchen, head of the mobility committee received 20% of her campaign donations from taxi companies.
- November 5, 2015 – Uber launches Kitchen’s Uber – a horse and buggy service aimed at Councilwoman Ann Kitchen, head of the transportation committee.
- December 14, 2015 – KUTreports that seven cases of sexual assault were filed against Uber and Lyft drivers in 2015.
- December 18, 2015 – Austin City Council votes to require all TNC drivers to pass a fingerprint background check, require company identifiers and outlaw stopping in travel lanes.
- December 28, 2015 – Political action committee Ridesharing Works for Austinis formed to promote petition drive to force an election to reverse city council’s ruling.
- January 13, 2016 – A coalition of club owners hold a rally supporting Ridesharing Works for Austin.
- January 15, 2016 – Ridesharing Works for Austin gathers support from Engage ATX, NetChoice and the Old Austin Neighborhood Association to extend their reach.
- January 18, 2016 – Mayor Adler proposes “Thumbs Up for Austin,” an incentive-based alternative to city council that shows whether a driver has undergone a fingerprint-based check inside of the ride-hailing companies’ smartphone apps
- January 19, 2016 – Ridesharing Works for Austin announces they received 65,103 signatures, passing the 20,000 signature threshold to force a vote.
- January 25, 2016 – Uber and Lyft respond to the mayor’s proposal and do not endorse the Thumbs Up! app as a viable solution.
- January 29, 2016 – Capital Factory and Mayor Adler team up to create a working prototype for the Thumbs Up! app.
- February 11, 2016 – City Council moves to take TNC debate to a vote.
- February 23, 2016 – Anti-Prop 1 PAC Our City, Our Safety, Our Choice forms and launches website.
- March 10, 2016 – Uber presses Texas Supreme Court to rewrite Austin’s May 7ballot language.
- March 18, 2016 – Travis County Democratic Party opposes Prop 1.
- April 26, 216 – Austin Chamber of Commerce backs Uber and Lyft in favor of Prop 1
- April 27, 2016 – Taylor Kitsch joins Uber and Lyft rally in favor of Prop 1.
- April 29, 2016 – Campaign finance report shows Ridesharing Work for Austin raised about $8M.
And a lot happened just before Election Day.
Here’s a quick rundown:
- Austin police shared new DUI crash stats with the Statesman, and it looks like Uber and Lyft may not have had as much of an impact as previously thought. But there’s still some, and anytime DUIs are going down in a city growing this fast, it’s a good thing.
- Meanwhile, Mothers Against Drunk Driving came out in support of Prop 1. “By providing our communities with an alternative – like ridesharing – to get home safely after a night out on the town, we’re confident DUI arrests, and drunk-driving related crashes can be lowered in Austin,” they said in an open letter.
- Uber is getting sued for an alleged FTC violation for sending out text messages encouraging folks to vote for Prop 1.
- Lyft told its drivers that if Prop 1 fails, they’ll turn off the app at 5 a.m. Monday.
- Uber told its customers that it will cease operations at 8 a.m. Monday if Prop 1 fails.