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Austin residents the latest victim of the Uber (ridesharing) regulation saga

This weekend marked an important moment in the ongoing saga between ridesharing and city regulation, right here in The American Genius’ backyard of Austin, TX. It’s a familiar story in the ongoing discussion of the place of Uber and Lyft in cities across the world.

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Uber, Lyft suspend operations in Austin after Prop 1 fails

This weekend marked an important moment in the ongoing saga between ridesharing and city regulation, right here in The American Genius’ backyard of Austin, TX. It’s a familiar story in the ongoing discussion of the place of ride-sharing in cities across the world.

Frankly, the outcome isn’t exactly positive. However, we can still learn from this instance and find ways to press on to a better tomorrow.


Here’s the gist of what just went down

City Council passed an ordinance requiring Uber and Lyft to obtain fingerprint-based background checks for all drivers. In response, a pro-ridesharing political activist group successfully petitioned for Austin to vote on Proposition 1. This proposed addendum to the ordinances would allow Uber and Lyft to run their background checks through their current third-party partners. Both companies claim their background checks are comprehensive as is, allowing them to safely employ enough drivers to best serve Austin’s market.

This weekend, the city voted against Proposition 1, 56 to 42. And on Monday, keeping good on previous promises, Uber and Lyft pulled their business from Austin. Now, about 10,000 drivers are out of work. Residents and tourists lost a transportation option sorely needed in a congested city with few efficient transportation alternatives.

So, how do we end up in a situation where Austin residents drew such a short straw?

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A city campaigning for safety overextends their reach

While the City of Austin championed the need for safety when it came to ridesharing, opponents found plenty of flaws within that message.

There’s the issue of how much safer a fingerprint background check can be. Almost a third of Austin taxi and chauffeur drivers who tried to sign up for Uber failed their background check. That shouldn’t be possible, right?

What about the safety concerns of drunk driving? In Austin, such incidences dropped by 12 percent in the time since Uber and Lyft entered the market.

Finally, ask any Austin resident, and they will tell you that public transit still has a long way to go to serve the city’s needs. Our single rail line mostly runs on commuter hours, and it only serves a few northern neighborhoods. Anybody south of downtown must use the bus, and their frequent stops make it very difficult to get anywhere quickly. Unlike a city like New York or Chicago, ride sharing in Austin is a near-essential alternative.

But the root issue with the city’s focus on safety is that plenty of residents don’t agree with it. While a 56-to-44 defeat is politically decisive, it still shows a large consumer base who accepts the Uber and Lyft model for what it is. At the end of the day, those who don’t like it still had the option of taking cabs or using a ridesharing service that does comply with more extensive background checks.

Instead of leaving that choice up to the consumer, the government decided to homogenize the services in the name of controlling the “safety” of the process.

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Companies campaigning for consumer choice don’t seem concerned about their customers

Uber (and to a lesser extent, Lyft), found business success and controversy by upending traditional regulations to reach markets hungry for their service. Austin was no different. However, that attitude now looks more self-interested than anything else.

In the Prop 1 election, these companies bankrolled 8.6 million dollars in campaign spending, the most ever spent on a city political campaign. People rightfully point out Uber could have covered the regulation costs at a fraction of their campaign spending. Furthermore, while, both companies quickly pointed out the cost to taxpayers of the fingerprint background checks, their political maneuvering brought on this special election that cost taxpayers $650,000, according to the Statesman.

Taking all of this in a context where ridesharing companies are fighting similar regulations in other major cities, and you can see a picture of a company trying to use Austin as an example.

Frankly, after all the other strong-arming, it’s hard not to see their decision to leave town as another bullying tactic, one that signals their belief in their way or the highway.

That also makes it feel plausible that those who voted against Prop 1 may have taken more issue with Uber’s tactics than the issue of safety itself. For these voters, a vote of “no” is about standing up to the bully, regardless of the underlying issue.

The solution: Be the bigger person

Consider the following sentiment by Joshua Baer, over on

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” I’ve seen a number of people on social media attacking the Mayor or individual council members and I really discourage that. I know you’re angry — but let’s focus on the issues and not question other people’s intentions.

While the city council’s campaigning created its own brand of animosity, we can’t let those emotions cloud the discussion going forward. We must be a positive yet assertive voice for what we as consumers will and will not tolerate. That goes for both government regulation and corporate behavior.

To do any of that, we must start by being present in the process. Turnout for this measure was 17 percent of registered voters. Even worse is how Uber’s target audience, the young adults aged 23-35, likely turned out even worse.

So, call your representative. Get registered to vote; the issue may come up again in state legislation. Join some activist groups. Or learn more about public service through running for a position or participating in a forum like Leadership Austin (thanks to Joshua for these suggestions).

While you’re at it, support the ridesharing companies that still run in town. If the market and free choice should dictate what consumers want, show the city and these other companies what kind of business you want to support.

When we are proactive consumers and proactive participants in government, we can help craft the kind of progressive change where we, the citizens, come out on top.


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Written By

Born in Boston and raised in California, Connor arrived in Texas for college and was (lovingly) ensnared by southern hospitality and copious helpings of queso. As an SEO professional, he lives and breathes online marketing and its impact on businesses. His loves include disc-related sports, a pint of a top-notch craft beer, historical non-fiction novels, and Austin's live music scene.



  1. Mabus

    May 13, 2016 at 11:37 am

    Article forgets the key issue: Progressive governance. With such government (on local or higher level) come inevitable consequences. Progressive government aims to dictate to the citizenry “a proper way of life” through the over-regulated society. At the same time that over-regulation enables Progressive Government to increase power over individuals and businesses. For the same reason the Progressive Federal Government can kill say, coal industry (which may be your preference) Progressive Government at Austin can kill Uber/Lyft (which you may NOT like). Elect people who want to dictate your way of life and you’ll inevitably get Governmental intrusion in your life. Sooner or later. Even if they are seemingly in ideological sync with you.
    In this case, Progressive Austin Government wants to do what every progressive Government claims it wants: to make your life safer by regulation. Be it limit on soda size in NYC or something that impacts your life more – under the safety (read “safety”) everything goes. Particularly against such “wild” (for Progressive Govt) industry as Uber/Lyft. Government wants control over them and by trivial regulation they did it. Question that article asks “is security advantage real” is pointless in this case. Security is excuse. Aim is CONTROL and you keep electing Progressives, you’ll get more and more CONTROL over your life. Inevitably. That is the self perpetuating nature of Progressivism. Their control will not and can’t stop only at the issues you agree with.

  2. Jon

    May 28, 2016 at 5:35 am

    Yeah, what Mabus said.

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