Ride-hauling firms set to return to Austin

Ride-hauling firms set to return to Austin

(FILES): This file photo taken on March 10, 2016 shows a man checking a vehicle at the first of Uber's 'Work On Demand' recruitment events where they hope to sign 12,000 new driver-partners, in South Los Angeles Ride-sharing services Uber and Lyft are set to quit the Texas city of Austin after voters said fingerprinting should be part of driver background checks, reports said. The companies had poured $8.6 million into a campaign to keep fingerprinting, which can be expensive and time-consuming, out of driver checks. The vote came after the City Council passed an ordinance in December that, among other rules for ride-sharing companies, required their drivers to undergo fingerprint-based background checks by February 1, 2017. Uber and Lyft announced after the results of Saturday's vote that they were set to suspend operations in Austin, the capital city of Texas, on the morning of May 9, 2016. / AFP PHOTO / Mark RalstonMARK RALSTON/AFP/Getty Images ORG XMIT: Uber, Lyf ORIG FILE ID: 551679877

AUSTIN — Uber and Lyft – the ride-hailing behemoths embattled in this city – may soon be returning to the Texas capital.

Texas lawmakers this week passed a bill that puts regulation of the ride-hailing companies into state hands, overriding municipal rules. Uber and Lyft unplugged from Austin last year after a contentious local referendum where voters chose stricter background checks for the firms' drivers.

But that battle – one of the stiffest faced by the companies – will be nullified as soon as Gov. Greg Abbott signs the statewide bill into law. The Texas governor has signaled his willingness to do so. “Buckle up,” he tweeted Wednesday. “Coming soon.”

The move was applauded by ride-hailing backers who say Austin’s ordinance forced the popular companies to flee one of the most tech-centered cities in the country. Uber officials indicated they were ready to return to Austin and other cities that had strict rules governing ride-hailing companies.

“We look forward to making Uber available in more cities across Texas and continuing to serve drivers, riders, and the communities in which they live,” Sarfraz Maredia, general manager for Uber Texas, said in a statement.

But some worried that Austin’s hard-fought battle against the corporations would now go to waste and pointed to a broader issue of state-versus-local control. Austin's clash with Uber and Lyft was closely watched nationally because other cities had similar issues with the firms' insistence to self-regulate, said Josh Jones-Dilworth, an Austin-based tech entpreneur and investor who was on a city task force to try to get the companies to stay. "I’m disappointed," he said. "I believe in self-governance at a local level."

Though dismayed, Jones-Dilworth said he wasn't surprised by state lawmakers' desicion to take up the matter. "Uber found a far more friendly listener in our state legislature," he said.

The conflict in Austin began in 2015, when city leaders passed an ordinance requiring ride-hailing drivers be fingerprinted. Uber and Lyft threatened to leave town and gathered 65,000 signatures to put the issue to a vote. Depsite the firms' spending $8 million to sway voters, the referndum failed, mandating fingerprint background checks for all ride-hailing drivers. Uber and Lyft apps in Austin went dark the next day.

The statewide bill removes the fingerprinting requirements, a major sticking point for the companies, allowing the companies to do their own name-based background checks on drivers. It overrides any municipal ride-hailing ordinances and puts regulation under control of the Texas Department of Licensing and Regulation. Background checks on drivers would be mostly up to the companies.

After Uber and Lyft left, other ride-hailing companies began operating in the city, fulfilling the fingerprinting background checks of drivers and filling in voids left by the firms' departure. One of the new companies, RideAustin, a non-profit created in the wake of last year’s ride-hailing clash, indicated this week it may have to close if Uber and Lyft come in and start undercutting prices.

Austin Mayor Steve Adler also voiced his displeasure in the new bill. “I’m disappointed that the legislature chose to nullify the bedrock principles of self-governance and limited government by imposing regulations on our city over the objection of Austin voters,” he said in a statement.



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