The ride-sharing companies have both suspended services in Austin from today after failing to convince voters they should be allowed to regulate themselves. They are to follow through on their announcement after 56 percent of Austin voters voted against Proposition 1. Specifically, drivers for the companies will have to eventually undergo background checks with fingerprints, display the company they are driving for in their vehicles, and won’t be able to stop in traffic lanes to pick up and drop off passengers. Other cities have backed off similar rules after Uber and Lyft stopped operating there, and it may be possible to reach a compromise on how to make sure Austin drivers are reliable and responsible.
Advertisement
“Disappointment does not begin to describe about how we feel about shutting down operations in Austin”, Chris Nakutis, general manager of Uber in Austin, said in a released statement.
Business is booming for ride-sharing companies but they face tricky regulatory issues in cities around the world.
The group fighting against Uber and Lyft said the large amounts of money spent on the case shows that the corporations care more about their profits than the safety of their customers.
“Even if the companies pull out on the operations side, I believe on the political side they will continue having discussions with the city council, but in the end, we’ve got to reach some middle ground”, said Greg Cesar, City Council Member. Uber has previously threatened to withdraw from Houston over that ordinance.
As of January, privately held Lyft was valued at around $5.5 billion, and Uber at around a whopping .6 billion. And now, the company’s background checks only go back seven years and do not include fingerprinting-which shows if a person was ever arrested, and is a routine requirement of taxi drivers and limousine services throughout the country.
The failure of the measure means that voters wanted stronger oversight for the companies including fingerprints and background checks. As a result, it says it hopes a “pause” in operations will show it is taking a stand in defense of app-based ridesharing.
Advertisement
The Austin election marked the first time a major USA city has put the regulations to a vote. But as you’ve heard before, we simply can not operate under the City’s new rules.
