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Lots of money being spent on the Austin Uber/Lyft ordinance referendum

Wow.

Uber

David Butts, meet Goliath.

Campaign finance reports filed Thursday for Austin’s ride-hailing services election show a beyond-massive lead in money for Ridesharing Works for Austin, the Uber- and Lyft-backed political action committee supporting a proposed ordinance that would become law if Proposition 1 passes on May 7.

Ridesharing Works reported that between Jan. 1 and March 28 it raised $788,750 in cash contributions and received $1.38 million in in-kind contributions, all of it from Uber and Lyft. The report says the committee spent $781,251 during that period, the bulk of it on Block by Block, a Washington company that conducted the petition drive that led to the May 7 election.

But that understates the costs already incurred. The in-kind contributions — huge consulting fees paid directly by Uber and Lyft as well as lodging, travel and staff time from both companies — were all expended before March 28 as well.

That means that, with more than five weeks left in the campaign, Uber and Lyft have already plowed $2.16 million into the Prop. 1 campaign. That already dwarfs the $1.2 million Mayor Steve Adler spent to get elected in 2014, up to now the gold standard for spending in an Austin municipal election.

The primary group opposing Prop. 1 reported raising and spending less than $15,000. Butts — a consultant who spent Thursday afternoon hammering in yard signs for the Our City, Our Safety, Our Choice political action committee — said he hopes to raise $100,000 by May 7, less than 5 percent of what the other side has spent already.

Lyft

[…]

Chelsea Wilson, a Lyft spokeswoman, said in an emailed statement that the heavy spending is necessary to avoid voter confusion about what is at stake.

“Unfortunately, the ballot language voters will see on May 7th is extremely misleading,” Wilson said, “and we will continue working to ensure that people have all the facts about this election.”

Uber contributed $387,750 in cash and made about $905,000 of in-kind contributions, including more than $450,000 on “consultant fees for campaign strategy.” Lyft made $401,000 in cash donations and nearly $475,000 of in-kind contributions.

Butts said that what Uber and Lyft are putting into the election indicates a lack of confidence that the public supports their cause.

“They see their own polls, and it obviously can’t be that great,” Butts said.

Our City, Our Safety, Our Choice reported just $12,459 in cash and in-kind contributions, and $8,560 in loans, all of that from Butts and Dean Rindy, another political consultant working to defeat Proposition 1.

That sure is a lot of money for any kind of municipal election, and that’s not even counting the cost of conducting the election, which the Trib pegs at $500K. Uber and Lyft drew a line in the sand here, so it’s not a surprise that they’re going all out to win. I’m sure they’d prefer to operate in Austin, which is as amenable a market for their services that they’re likely to find in the state, and they would like even more to make an example of it. If they get what they want here, that gives them a fair amount of leverage in other cities. Losing would also be a pretty big disaster for them. I keep thinking this issue is going to come up again in Houston one way or another. The chances of that a much greater if Uber and Lyft win this fight.

If I were in Austin, I would likely vote against this referendum. I don’t like the idea of companies overriding the normal legislative process like this, and as I’ve repeatedly said here, I disagree that including fingerprint checks is an unreasonable burden on Uber and Lyft. The existence of Get Me, which offers similar ride for hire service and which has said they will comply with fingerprint requirements, is evidence of that. That said, the void that Uber and Lyft would leave in Austin is non-trivial. Austin On Your Feet explains why tat city’s situation pre-Uber and Lyft was so ripe for disruption.

1 THE CITY (STILL) LIMITS THE NUMBER OF TAXIS
Finding a taxi in Austin when you needed one was hard. At 2:00 AM on Friday and Saturday nights (closing time for bars), throngs of downtown revelers used to line up desperately searching for cabs. Many folks had to wait until the first wave of cabs had already driven to the suburbs and back. Others gave up and either drove home intoxicated, took unpaid rides from strangers, or hired unlicensed cabs. Since Uber and Lyft have arrived, the number of people offering rides for money and the number of paid rides have both risen dramatically, showing that the demand was always there, but couldn’t be provided for with the limited number of taxis the city permitted.

2 THE CITY (STILL) FORBIDS TAXIS FROM PRICING APPROPRIATELY
Uber and Lyft vary their prices for a variety of reasons. They use sales and first-ride discounts to promote their services; they use temporary price hikes to motivate drivers to get on the road at times of high demand. Given the city-mandated taxi shortage, taxi companies could have used similar tactics to build ridership at down times and motivate all their drivers to drive at times of highest demand. Except the city doesn’t allow taxicabs to change their prices except by act of City Council. The tools that Uber uses to provide reliable service aren’t available to taxis.

3 THE CITY (STILL) LIMITS THE NUMBER OF TAXI COMPANIES
Ever wonder why, when riders and drivers both complain vigorously about the existing taxi companies, no other company came into existence and tried to lure drivers away to work for them instead? After all, Uber and Lyft are constantly fighting for each others’ drivers. The city only grants franchise agreements to three companies and limits the number of drivers for each, so they have no incentive to compete for drivers. As a member of my neighborhood association, I’ve met with people looking to start a new taxi company. Unfortunately, all their time was spent on the politics of convincing City Council members to allow them to serve customers rather than the actual logistics of serving customers. Starting a business is hard enough; starting a business that requires political approval before you are allowed to operate is a step too far for most people.

4 THE CITY (STILL) FORBIDS OTHER COMPANIES FROM OFFERING ANYTHING THAT EVEN VAGUELY RESEMBLES A TAXI RIDE
With the city-mandated taxi shortage, you might expect people to get more rides from slightly differentiated services like prearranged ride companies (called limousine service, but not limited to stretch limos). However, the city code includes many rules with no conceivable consumer benefit. For example, limo services are forbidden from charging less than $55/hour, must wait half an hour before providing service, and must keep trip tickets proving both of those facts.

That’s a terrible status quo, and as someone who supports efforts to enable people to live without (or with fewer) cars, having convenient options like Uber and Lyft are necessary. I don’t envy anyone the decision they have to make for this. Mike Dahmus and Austin Teacher Dad, both of whom will vote for Prop 1 but for different reasons, have more.

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7 Comments

  1. M1EK says:

    Thanks for the link.

    GetMe smells like a con job. They won’t reveal their CEO and their driver sign-ups were very very sketchy. At best, they’re likely to be overwhelmed.

    Cabs ruined the effort to write new rules in 2014 – see my post for details from somebody on that task force who went in presuming Uber would be the more difficult partner. They are enjoying the fruits of regulatory capture.

  2. Ginger says:

    I’m not comfortable with the cab situation in Austin, but the amount of money Lyft and Uber are spending to write our laws directly is really bothering me. What I really think we need is to push for light rail and other forms of mass transit improvement, and screw all this car culture stuff, but I’m a dreamer, as you know.

  3. Joel says:

    this is a no brainer. austin, of all places, should stand up to corporate attempts to co-opt our city’s governance.

    if we need more cabs, then austin should allow more cabs. we certainly don’t need to open up our kids to being driven around by murderers and rapists in order to “solve” that problem.

  4. Joshua ben bullard says:

    To date -because of mayor Sylvester turner every houstonian is forced by Houston law to pay an additional 28% to one of Twp men -a-travis kallinik(owns uber) or big taxi man,but the city of Houston will.not allow citizens to hire their driver direct,you must give 28 % additional-the citizens could keep their 28% and still hire the same driver put Turner continues to behold to Houston big taxi man (who just so happens to be the biggest taxi medallion holder in -Austin and San Antonio ,hmm,why would mayor turner force all houstonians to pay this man an extra 28% every time you hire a taxi or uber$$$$$$$$$$¢$$$$$$$$$$$-bingo-jackpot,turner took hundreds of thousands of dollars from both family’s ofhoustons big taxi medallion holders (a taxi medallion system that houstonians no longer support and are rejecting by the millions,houstonians dont need limited market entry for their taxis ,they want safety but won’t pay for a limited market any longer ,Sylvester turner should sign an executive order abolishing all limits on market entry on taxi cabs just like he allows with uber.end the taxi medallion=freehouston

  5. voter_worker says:

    Gosh, corporations attempting to buy elections. Except Uber is a good corporation, like Alphabet, Amazon and Apple, amiright?

  6. C.L. says:

    First, I’m not so sure Uber or Lyft drivers are more prone to being murders and rapists than are ‘regular’ taxi drivers.

    @Joshua… we get it, Josh. You have an issue with the taxi system in Texas…and perhaps with the Mayor… and perhaps with Travis Kallinik… but certainly with grammar.

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