Uber and Lyft pull out of Austin after locals vote against self-regulation

Ride-sharing services Uber and Lyft are suspending operations in Austin, Texas, after the city’s voters rejected a proposal that would have allowed the companies to self-regulate their drivers.

Instead, the voters upheld stricter regulations that the city council passed in December: ride-sharing drivers are required to pass fingerprint-based background checks, clearly mark their cars with the ride-sharing company’s logo, and not pick up or drop off their passengers in certain lanes of the city’s streets.

Uber and Lyft wanted those regulations to be repealed, and if Proposition 1, which went to the polls on Saturday, had passed, they would have had their way. Instead, despite combined spending of nearly $9m against opposition of just over $100,000, voters rejected the proposition 56–44.

In a statement, Lyft said: “Lyft and Austin are a perfect match and we want to stay in the city. Unfortunately, the rules passed by City Council don’t allow true ride sharing to operate. 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. Because of this, we have to take a stand for a long-term path forward that lets ride sharing continue to grow across the country, and will pause operations in Austin on Monday, 9 Ma.”

Uber confirmed to USA Today that it too would be ceasing operations in the city on Monday. “Disappointment does not begin to describe how we feel about shutting down operations in Austin,” Chris Nakutis, Uber’s Austin general manager, told the paper. “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.”

Both companies used a roster of lobbying tactics which have served them well in other jurisdictions, calling on their rider base to support them in the polls and warning that a loss may result in the end of services in the city. Uber texted riders personally asking them to vote for Prop 1, while Lyft even offered free trips to polling locations during early voting.

User’s tactics had served it well in the company’s last major political tussle, taking on the New York City mayor, Bill de Blasio, in summer 2015. De Blasio had planned to place caps on Uber’s fleet in the city, but was forced to step back in the face of vociferous opposition: Uber successfully painted the mayor as “a career politician beholden to the yellow taxi cartel”, according to the New York Observer, who opposed the technological efforts to bring reliable private transport to minorities in the suburbs.

Uber and Lyft have also become adept at playing municipalities off against each other, praising those which adopt regulations supportive of ride-sharing firms and mocking those who oppose the firms as “backwards”.

That playbook didn’t work in Austin. In the run-up to the initial regulations which proposition 1 was intended to repeal, Uber offered horse and cart rides, arguing that the council’s plan “would require Uber driver partners to undergo the same background requirements of horse and carriage operators in Austin”.

Voters didn’t bite, and now Uber and Lyft face a new difficulty: with the companies out of the city, could Austin become a beacon for other councils considering fighting back against ride-sharing operators?

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