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What’s the roadmap for ridesharing regulations look like?

This is going to be a challenge, no matter how you feel about it.

Uber

Several state legislators have made it clear they’re eager to take control of rules for ride-hailing companies in Texas, shifting power from individual cities to the state. But with six months until the next legislative session, there’s no clear consensus on how exactly to go about it.

The Legislature has tried before — and failed — to come up with statewide regulations sought by industry heavyweights Uber and Lyft to free them from conflicting local rules.

But the recent decision by voters in Austin — the conservative state’s liberal capital — to reject rules sought by the ride-hailing giants has been a rallying cry for lawmakers.

“We don’t live in a democracy,” said. Sen. Don Huffines, R-Dallas. “All the authority cities have comes from the Legislature. They exist by the mercy of the Legislature. So we have a distinct role in overseeing all political subdivisions that we create, and we’ve got to make sure that they don’t trample economic liberty, personal liberty and freedoms.”

After the Austin election, Huffines immediately called for state regulations, or what he called “deregulations,” and was unconcerned with overriding the will of local voters.

Lyft

“People get riled up, and they pick up their pitchforks and they run to the ballot box or they run to the barn and tar and feather or lynch someone,” he said. “We have rules of law relating to protecting the views of the minority.”

Huffines wasn’t the only state legislator whose ears perked up at news that Austin voters upheld city rules for ride-hailing companies over those backed by Uber and Lyft. His Senate colleague, Georgetown Republican Charles Schwertner, also pledged to draft legislation.

“We’re exploring all options,” Schwertner said. “There’s the background check and then there’s fingerprinting, those are two separate issues. There’s competing discussions … I personally have not made any decisions as to what is the best statutory language to put in the bill.”

[…]

For Schwertner, the layered concerns of ride-hailing companies, drivers, riders and municipalities indicate that statewide regulations would be the best route forward.

“I think the safety issue in my mind is paramount,” he said, pointing to concerns with drunk driving. “[There is] the mobility issue, economic issue — it’s multi-tiered. It’s not just a local control versus state regulation issue. It’s all those things. When you look at the totality of the concerns, it favors statewide, uniform, consistent and fair regulation.”

I’m glad to hear that from Sen. Schwertner, since his initial statements following the rejection of Prop 1 were mostly bombast. I’m still not convinced that the Legislature needs to step in on what has traditionally been a local issue, but if we can have a reasonably serious discussion about what we want ridesharing regulations to accomplish, and if we can get Uber and Lyft to be more forthcoming with their data, then this could be a positive experience. My personal preference, if this must happen, is for the state to provide a minimum set of standards that cities and counties are then allowed to add onto as they see fit. And if we really care about having a free market and not just a greased skid for the two major players, then let’s be sure to not impede the new players who are trying to fill the niche that Uber and Lyft voluntarily left behind.

On the matter of overriding municipal ordinances, that appears to now be on the table:

After a visit Wednesday from top Uber brass, Texas state Rep. Joe Pickett, D-El Paso, appeared to soften his position against a possible statewide bill that would replace city ordinances regulating rideshare companies.

As the chairman of the House Transportation Committee, Pickett’s position on the matter is crucial. Any bill regulating how companies such as Uber screen their drivers likely would be assigned to his committee, where Pickett would have power to block them.

[…]

Immediately after [the Austin Prop 1 rideshare vote], two Republican lawmakers said they would introduce bills in the 2017 legislative session that would overturn fingerprint requirements in Austin and Houston. Pickett said he would oppose such bills since they would thwart the will of local voters.

However, the El Paso lawmaker this week said there might be some room for compromise.

Houston Chronicle business columnist Chris Tomlinson in May speculated that the real reason Uber and Lyft are opposed to fingerprinting drivers is that their turnover rate is so high that many drivers won’t wait the 10 or so days it takes for the checks to be completed.

An Uber spokeswoman Thursday did not respond directly when asked if that is the case.

But Pickett said that on Wednesday he discussed a compromise with Uber brass that might solve that problem. Under it, riders could specifically request drivers who had undergone fingerprint-based FBI background checks.

“I told them that on the surface, it seemed like a hybrid that could work,” Pickett said.

Pickett goes on to say that he’d want to see if this idea is acceptable to cities and his colleagues first. It’s also not clear if Uber and Lyft would go for this; the basic idea has been floated in Austin with no apparent interest. There’s still a lot of moving parts here, and it’s not clear what if anything will be the consensus position, or at least the position that a majority will approve.

On a side note, good Lord is Don Huffines an idiot. Please, Dallas Democrats, find someone who can run against him in 2018. I know that’s an off-year and all, but his district isn’t that red. Even in the dumpster fire of 2014, SD16 was what passes for competitive, with Greg Abbott leading Wendy Davis by a 57.5-41.0 margin; not close, obviously, but slightly less Republican than the state as a whole. Please find a decent candidate and put some money into that race. Surely we can do better than this.

What a free market in ridesharing looks like

It looks like Austin right now.

Uber

When Uber and Lyft left Austin last month, they thought they were sending a message to the Austin City Council and other local governments looking to regulate them. Instead, their departure may pave the way for a revamp of ride-hailing in Austin that could draw the notice of other cities.

At least six new companies have launched in Austin, all emerging from the ashes of the Proposition 1 election that left the capital city without the two industry giants in vehicle-for-hire apps, which are also sometimes referred to as transportation networking companies.

“What [Uber and Lyft] have left us with appears to be the only open TNC market in a major city in the world, maybe,” said Austin Mayor Steve Adler. “In the marketplace, when you have a monopoly, or in our case a duopoly, that leaves town, what you would expect to see in the market is innovation and competition. And that’s what we’re now seeing happening in Austin.”

[…]

While other companies offering similar services had operated alongside Uber and Lyft, none had seen anywhere near the same level of success. An estimated 10,000 drivers found themselves out of work after the two companies ceased operations.

Newer faces have quickly flooded the market. There’s Arcade City, getme and Fare. There’s also Fasten, Wingz, zTrip and RideAustin. And InstaRyde will have its official Austin launch later this week.

Many of these companies, most of which have business models similar to those of Uber and Lyft, are still finding their footing, rushing to get drivers on the road and apps on Austinites’ phones in the race to emerge as the face of peer-to-peer transactions in the city. Some sprouted roots in Austin before Uber and Lyft left but have seen a recent boost in business.

Yet all of these firms still operate in the shadow of the two ride-hailing giants, struggling to distance themselves from their competitors while still offering comparable services. Even now, it’s unclear if any of these new companies will be able to offer the same level of coverage or see similar success.

[…]

Despite the turmoil from the election, Adler said he stands by the council’s decisions, even as the fallout has captured national attention.

“I have talked to mayors from around the country about this issue,” Adler said. “My position on this is that cities need to be as innovative and creative as are the industries and businesses and economies that it intersects with … There’s a suggestion that what’s happened here demonstrates that Austin is not an innovative city, and I don’t think what happened here indicates that at all … Austin is where ideas go to become real.”

Adler said it was unclear what the ride-hailing environment will look like down the line, but he said he is certain there will be “choices operating at scale in the city.”

The future could depend on whether the Legislature decides to take action on the issue next year. Immediately following the departures of Uber and Lyft, Sen. Charles Schwertner, R-Georgetown, said he will file legislation on the issue next session that emphasized a free market. Other GOP lawmakers expressed similar concerns on social media after the election.

Adler said while statewide regulation is “certainly an option” the Legislature can use, the atmosphere in Austin has already significantly shifted since the election.

“I think that when some of the legislators initially spoke, it was uncertain as to whether or not Austin had adopted something that would prevent the market to function,” Adler said. “I would say the evidence at this point would at least suggest that the market is working well.”

There’s little the Legislature can do until the 2017 session, but the House Committee on Business and Industry is holding an interim hearing on Wednesday to discuss “how Texas can support shared economy growth in the state.” Uber General Manager Sarfraz Maredia has been invited to testify.

In the meantime, the future of Austin ride-hailing will be determined by the market, Adler said, “as opposed to government deciding.”

Boy, wouldn’t that be a kick in the pants? I wonder if Sen. Schwertner and his Republican colleagues will recognize it if it is happening. I’ve been harping on all this for awhile, so I’ll try to restrain myself here. I don’t expect all these companies to be successful – frankly, if one or two of them make it, that will be great. Austin represents a unique opportunity for these companies. Let’s see what they can do.

Former drivers sue Uber and Lyft over leaving Austin

This ought to be interesting.

Uber

A pair of former drivers for Uber and Lyft filed dual class action lawsuits Thursday against the ride-hailing companies over their abrupt exit last month from the Austin market.

The lawsuits, filed in the U.S. District Court in the Northern District of California, claim that Uber and Lyft violated the federal Worker Adjustment, Retraining and Notification Act when they pulled out of Austin in May because they failed to properly notify their employees. Uber and Lyft have long maintained that their drivers are independent contractors and not employees.

[…]

Lyft

Todd Johnston, the driver behind the suit against Uber, drove for the company since May 2015 while David Thornton, the driver on the Lyft suit, drove for Lyft since October 2015. According to the suits, Johnson and Thornton, along with other Austin ride-hailing drivers, “lost their jobs” after the companies left Austin.

“Lost in the political theater surrounding the Uber and Lyft versus Austin City Council battle was the real-world effect on the thousands of Austinites who suddenly lost their incomes when Uber and Lyft abandoned Austin,” said Michael Slack, an attorney for Johnston and Thornton.

The federal notification act cited in the suits requires employers to notify their employees before any mass layoffs or the closure of a “facility” or “operating unit.”

I Am Not A Lawyer, so I have no idea if this suit has any merit or not. We do know, as the story says, that Uber and Lyft are very adamant about the whole worker-classification thing, so you can be sure that will be a key to their argument against the plaintiffs. How successful they are, and how successful the plaintiffs are at getting terms like “facility” to be interpreted in their favor, will determine how far this gets. Any actual attorneys want to comment on this?

First rideshare legislative hearing

There will be a lot more where this came from.

Uber

Representatives from Uber and Lyft urged lawmakers to adopt statewide regulations for the ride-hailing industry during a Texas Capitol hearing on Wednesday, citing what they called burdensome local ordinances that have driven them to leave Austin and other Texas cities.

The companies fielded pointed questions from members of the House Committee on Business and Industry about safety concerns and how local regulations, like those in Austin, impact their operations.

“I think we first need to recognize the obvious – technology is changing our lives,” said Committee Chairman René Oliveira, D- Brownsville, at the start of the hearing. “These changes are going to be very profound; you’ve already seen that in Austin … but this is not just an Austin, Travis County issue.”

Currently, regulations for ride-hailing companies are handled on a city-by-city basis. The Legislature discussed potential regulations during the 2015 session, but those bills failed to gain any traction. Now, several months ahead of the next session, lawmakers are revisiting the issue after Austin citizens voted in May to keep in place a requirement for ride-hailing drivers to undergo fingerprint-based background checks.

[…]

Lyft

Oliveira said while he tends to favor local control, “there are some issues that demand state intervention.”

“I am neutral on this issue,” he said. “What I am concerned about is finding out the necessary facts to determine – is this an issue that the state of Texas should get involved in or is it an issue of local control?”

During the hearing, he asked both [Rena Davis, a public policy manager for Lyft] and Sarfraz Maredia, the general manager for Uber in Texas, if they had data to support claims that they offer safer rides than taxis. Neither Davis nor Maredia provided specific numbers, to the frustration of the committee.

“I can’t believe [Lyft] or Uber doesn’t have data that we could look at that involves drivers and what the incident rate is,” Oliveira said, referring to the number of violent encounters between drivers and riders.

Both Maredia and Davis assured the panel they would provide lawmakers more information.

So let’s talk about regulations and transparency. After that post was publushed, Uber pointed me to this safety report on their website that goes over their criteria for background checks and what causes a potential driver to be eliminated. I appreciate the feedback and commend them for making that public. I also have this memo from Sarfraz Maredia on Uber’s safety procedures, as well as Maredia’s written testimony to the committee. A lot of what’s in those documents are things we have heard before from Uber, though perhaps not as much lately as the argument has largely defaulted to “do it our way or we’ll leave and then you’ll be sorry”. The thing is, I think Uber and Lyft could have done a lot better in Austin if they had focused on the things they do for customer safety instead of bludgeoning everyone to death with nonstop misleading ads and automated text messages. They could still gain some ground, in Houston and in Austin if they want to, by going back to that emphasis on their methodology and by being forthcoming with their data to back up their claims. Show us the numbers, on how many drivers they reject and for what reasons, compared to the cities, and how many incidents per capita there are in cities that do it their way versus cities that impose “unnecessary” regs on them, however they want to define that. If the cities in question can’t or won’t provide adequate data to allow them to make the comparisons, then so much the better for them and their argument that the cities are making them jump through hoops for no good cause. And if some of the numbers don’t show them in as positive a light as they’d like, be honest about it and see what can be done to improve. These guys say they’re bold innovators leading the way to a better future, well then do the math and show us the analytics to prove it. I promise to keep an open mind.

Since the Austin election and Uber and Lyft’s departure, startups and smaller ride-hailing companies have swarmed the city and its newly open market.

One company that has seen success in the capital city is getme, which has offered rides since December. The company’s founder, Michael Gaubert, told lawmakers Wednesday the company opposes statewide regulation of fingerprint background checks .

“The notion that there should be a state law ban on fingerprinting is not the correct way to go on this,” said Gaubert, who was joined at the hearing by former Dallas Cowboys player Michael Irvin, who he described as a close friend.

But lawmakers seemed committed to pursuing some sort of regulation next session, particularly Rep. Jason Villalba, R-Dallas, who cited concerns with the “patchwork quilt” of regulations across the state.

“It may not get to the governor,” he said of potential legislation, “but we’re going to try something.”

It would be nice to think that the Lege will look at the data and put forth reasonable proposals to address what can be done while allowing cities to take the steps they need to get the service they want. I doubt that’s what will happen, but it would be nice to think. Trail Blazers has more.

What do we really want from rideshare regulations?

From Medium:

Uber

To help ensure people have a fair chance at earning a living, Uber’s screening process embraces protections codified in the Fair Credit Reporting Act and other similar laws, ensuring lookback periods are reasonable and arrests without convictions or charges are not considered, among other indicators. We have said time and again that fingerprinting may not be the best way to determine whether or not someone is qualified and able to provide a safe and reliable ride. Further, there’s no evidence to suggest it would improve safety for passengers and it has costs to privacy that other approaches to background checks do not.

We believe the right path forward is to continue to improve the level of transparency and accountability that’s built-into our service and the processes available for screening drivers. Instead of relying solely on flawed databases that are known to have information gaps, our technology makes it possible to focus on safety before, during and after every trip.

When so many people’s lives are deeply affected by their inclusion in a potentially faulty database, it’s important that the public has the time and ability to analyze what’s in it and how it’s being used. We hope the DOJ and FBI not only grant these groups’ well-warranted request for an additional 30 days to comment on its proposal but also, consider the quality of the database and whether or not people should know how it may affect their lives.

From Jay Aiyer, in the Chronicle:

Historically, taxis have been one of the most heavily regulated local industries. City governments have restricted everything from the number of taxi licenses issued to whether a driver can use a cellphone while operating a vehicle. The list can be quite long and intrusive. Ride-sharing companies often argue that these regulations are unnecessary. After all, no other industry is subject to this level of restriction. Municipalities place no restrictions on the number of fast-food restaurants, nor do they require background checks for cable employees entering people’s homes. So why vehicles-for-hire?

The simple reason is the quasi-public function they serve. While private businesses, vehicles-for-hire serve a distinct public transportation function that is unique and still necessary in our society. They are an extension of the city in welcoming visitors, transporters of last resort for transit-dependent populations, and a critical safety valve for impaired drivers. They are simply not the same as a fast-food franchise or the cable company. They are a critical part of a community’s transportation network.

If we accept the need for some restrictions, the obvious question is: what kind? Public safety, access protections and insurance requirements seem obvious. We have a high expectation of safety and security when using a vehicle-for-hire, and having fingerprint-based criminal background checks to determine basic eligibility to drive is important. But even those restrictions should be relatively limited.

While we can agree we don’t want those convicted of serious crimes driving, we need to be more flexible to allow individuals who have paid their debt to society to be employed. Similarly, having broad insurance requirements is a critical need to ensure general public safety and avert catastrophic medical costs. We can’t have accidents with uninsured passengers or drivers. Finally, there should be no debate over the need to protect access to transit services. All people, regardless of neighborhood, should have access to vehicle-for-hire services.

So let’s talk about fingerprints for a minute here. Everyone agrees that there are some people we would rather not have driving cars we pay to ride in. We do background checks, which include checks of criminal records, to try to identify these people that we want to exclude. Fingerprints are an obvious entry point to this data. I presume there are others, for if not then I’m honestly unsure how Uber and Lyft can claim to check these records, but assuming there are then the argument we’ve been having is mostly about whether this is the most effective way of looking at arrest and conviction information.

The discussion we should be having comes back to that question about who we want to keep out of the driver’s seat. Ideally, that should involve a risk assessment of some kind. Not all criminal records are created equal. Violent crimes are a big red flag, but it’s also reasonable – our national conversation about drug reform notwithstanding – to prefer to not have people with drug convictions serve as drivers. There’s also a difference between being arrested and being convicted, and between recent arrests and those that happened ten, twenty, thirty years ago. How do we assess this information and come to reasonable, consistent decisions about who we grant permits to and who we refuse them to? And if we’re going to argue about what if any role fingerprints should have in this process, then it would greatly help to know how Uber and Lyft arrive at their conclusions about those who apply with them. What are their criteria for determining who’s in and who’s out? If they want us to trust them, we need to know that.

As I say, this is the discussion we should be having. It’s hard to do in an environment where a key stakeholder refuses to engage beyond “let us do it our way or we’re outta here”, but that’s where we are. To be sure, the current process mandated by the city could be improved, to make it more convenient and less time-consuming for would-be drivers. I don’t know the specifics so I’ll skip the part where I make suggestions, but I’m sure if Uber or anyone else wanted to make their own to the city, they would be amenable to them. It would help if Uber backed down from the ultimatum first, of course. You know, as a show of good faith. I for one would like to see Uber and Lyft and some other competitors operate in Houston. I’d also like for us to come to a consensus about who we do and don’t want doing the driving. I feel like if we can do this, the rest will follow. Who’s with me?

In the meantime, the State House Committee on Business and Industry is holding a hearing in Austin on Wednesday at 10 AM to discuss the sharing economy. Uber General Manager Sarfraz Maredia has been asked to testify, as have representatives from Houston and Dallas. A livestream of the hearing can be seen here. I’ll be very interested to see the reporting on this.

RideAustin

Another new player gets set to enter the Austin rideshare market.

Adding to the growing number of ride-hailing options in Austin since Uber and Lyft’s wholesale evacuation, a new nonprofit, community-based app called RideAustin was introduced today at the Alamo Drafthouse on South Lamar.

The app is being described as “innovative,” as well as made “by Austin, for Austin,” according to Joe Deshotel, RideAustin’s PR representative.

The initiative is a collaboration of Austin-based tech entrepreneurs and community leaders, for service that “[brings] the community together to build local solutions for Austin’s ridesharing future.” Formed as a nonprofit, and led by billionaire Austin tech giant and Trilogy founder Joe Liemandt and Crossover founder Andy Tryba, RideAustin’s overarching goal to become a “community asset,” per Deshotel, begins with uniting tech advancement with social responsibility.

Only two weeks in the making – Deshotel himself joined the group a week ago – the app joins Get Me, zTrip, Wingz, and still-in-the-works Warp Ridesharing. The RideAustin app will go live for iPhone users this morning, with service starting in June. (The Android version of the app is also expected to roll out in June.) Prospective drivers can start the on-boarding process, and get themselves scheduled for fingerprinting.

Blue-sky success would involve a smooth scale out from its initial services areas: the Austin-Bergstrom International Airport and the Downtown area, for which exact parameters haven’t been set. Not having “to worry about shareholders” as a nonprofit, it “will allow drivers to earn more [RideAustin will take a smaller than industry-standard commission] and riders pay less while helping local charities.”

Initial ride pricing itself is unknown, but unlikely to be as low as Uber and Lyft, at least to start. As reported previously, the best current option, Get Me, has been struggling with driver/rider matches, often forcing riders to wait longer than 10 minutes – Uber took an average of three minutes – and pay significantly higher prices.

Two unique RideAustin app features include a fare roundup option and “optional surge pricing,” says Deshotel. The fare roundup feature would allow riders round their fares up to the next dollar over the fare, to be given to a choice of as-yet-determined charities.

The more interesting (and potentially problematic) feature, optional surge pricing, would allow riders to opt-in to surges, allowing them first ride at premium cost. Riders electing not to opt-in, or financially unable to do so, will remain in driver queues, placed behind those accepting surge pricing. Though RideAustin is surely a business in all contexts, even with its additional aims at targeting the underserved and disabled, locating balance will be paramount, and could throw its first-look presentation as community-facing into immediate question.

Having this be a nonprofit is an interesting variation, and while I’m not exactly sure how well that will work, I see no reason why it can’t work. The point is that we should all hope that at least a couple of these new ventures find success, which they are then able to bring to other cities. I’ve heard an awful lot about the “free market” in ridesharing over the past several months, but the truth is that the rideshare market was and currently is entirely dominated by two enormous firms. That’s a “competitive” market in the same way that the broadband and cable/satellite TV markets are competitive. Surely that’s not what we really want here, right? I’ll say again, the single best outcome here is for multiple viable alternatives to Uber and Lyft to emerge. That would be good for riders, good for drivers, and good for city governments that don’t want to be held hostage by a couple of would-be monopolists. The Statesman and Buzzfeed have more.

San Antonio to re-revisit its rideshare requirements

Just when you thought it was all over

Uber

With Transportation Network Company (TNC) tension looming from Austin and Houston, the City of San Antonio is preparing its push to renegotiate with ride-hailing companies such as Uber and Lyft. And one of the officials taking the lead on the talks believes they’ll be a model for other municipalities to follow.

“It’s important that we move forward and set the example. And I think we’re about to for the entire state and possibly the entire country,” said City Councilman Roberto Treviño at a meeting of the City Council Governance Committee. Treviño has spearheaded much of the City’s negotiations with TNCs.

Lyft and Uber left San Antonio in March 2015, after City Council mandated that drivers undergo fingerprint background checks. After a spring and summer without the services, a 9-month pilot compromise was struck to bring them back: The checks were made voluntary, with the City footing the bill for those who wished to undergo them. If a driver submitted to a fingerprint background check, they’d receive a special designation on the app’s screen.

The deal was portrayed as a win for consumer choice and TNCs alike. But few drivers have undergone the voluntary checks. There’s also no way to specifically hail a driver with a fingerprint background check, so passengers who want one must repeatedly hail a ride, then cancel it until they’re picked up by a fingerprinted driver.

Councilman Joe Krier said he hadn’t heard of “a single … bad experience with Uber or Lyft” from constituents. But Councilman Mike Gallagher expressed concerns over if citizens understood how to identify whether a driver has passed the fingerprint check.

“I almost wonder if we need to strengthen the ordinance with something that says ‘Caution: Driver has not passed fingerprint background check,'” Gallagher said.

See here for the background. If you live in San Antonio, there are a couple of public meetings scheduled to discuss this; see the link at the top for more details. One such meeting has already happened, and there’s also an online survey you can participate in. The operating agreements with Uber, Lyft, and GetMe expire in the next few months, with the GetMe one the lasting until October, but it looks like they will all be allowed to go through then. For all the sturm und drang in Austin, I’d say this is the situation to watch. if SA and the TNCs can come up with an agreement that is broadly acceptable to all, including the cab companies, then that could serve as a starting point for Austin and Houston, if they are inclined to redo their own ordinances. If not, well, that will add to the impetus for the Lege to butt in. We’ll see how it goes. Texas Public Radio, San Antonio Magazine, and the San Antonio Business Journal have more.

Abbott comments on Austin rideshare referendum

Sort of.

Uber

Gov. Greg Abbott said Monday the fight is not finished when it comes to regulations in Austin that have driven ride-hailing companies out of the state capital.

“The issue’s not over,” Abbott said in an interview on CNBC. “Republicans in the Texas Legislature have already raised proposals coming up in the next session to override the Austin vote.”

Pressed on whether ride-hailing companies Lyft or Uber would return to Austin, Abbott said: “I’d just say the game is not over. It’s halftime, and we’ll see what happens in the second half.”

Lyft

[…]

In the CNBC interview, Abbott was read a tweet from venture capitalist Paul Graham that said “Austin has zero chance of being a serious startup hub without Uber and Lyft.” Abbott denied that, saying the city is “already a dynamic startup hub.”

“That process has already left the barn, as we say in the state of Texas, and there’s nothing that will slow it down,” Abbott said. “And the dynamics that’s causing Austin to be a startup hub are already in place and will not be diminished by” the Proposition 1 vote.

As we know, legislation has already been proposed to enact statewide ridesharing regulations, though whether such a bill (if it passed in the first place) would include fingerprinting requirements or not remains an open question. Normally, one doesn’t have to parse Greg Abbott’s words closely, but I can’t tell from this story where he really stands. Is this a priority for him? Is he anti-fingerprints? Unclear at this time. I’m not sure if that’s because Republicans are not of one mind when it comes to fingerprinting, and Abbott wants to see how the wind is blowing before he commits himself, or if it was just a vague question asked by an idiot CNBC host that wasn’t designed to elicit a specific answer. In any event, Abbott and Dan Patrick don’t have to single this out as a priority to get a bill to pass, but if they do it increases the likelihood of it happening.

Lawsuit filed over Uber/Lyft referendum language

Oh, for crying out loud.

Uber

Attorney Martin Harry filed a lawsuit — a draft of it was obtained by the American-Statesman — in Travis County state district court late Tuesday contesting the election’s outcome, alleging that the city violated election law by combining what should have been two ballot questions into one.

“I don’t think the voters knew what they were voting on,” said Harry, who is representing himself in the case.

He said voters should have been asked first whether they would like to keep or reject the city’s controversial 2015 ordinance and then whether they accepted Uber and Lyft’s replacement language. He also alleges that the ballot language drafted by the city staff did not match the instructions given by the City Council.

“While we are disappointed to be involved in litigation regarding last week’s election, and would rather be working with companies to help them provide safe and efficient transportation services, we are prepared to defend the lawsuit,” city Law Department spokesman Bryce Bencivengo said.

Lyft

The lawsuit left Austin-based election lawyer Buck Wood stunned.

“I truly have never seen anything like this in my 40-plus years of doing election law,” said Wood, who reviewed a copy of the draft complaint for the Statesman. “I don’t think the court has any jurisdiction to throw it out on the ballot language.”

He added, “I don’t think he’s got a lawsuit here.”

Harry’s lawsuit asks a court to block the city from enforcing the ordinance that the City Council approved in December — which requires fingerprint-based background checks of drivers with ride-hailing apps, among other measures — unless another election is held.

I don’t care about any of the legalistic argle-bargle here. I just have one simple question: Is there a sentient human being anywhere on the planet who was unaware during the leadup to this election that a Yes vote on Prop 1 is what Uber and Lyft wanted, and that a No vote on Prop 1 is what Uber and Lyft did not want? The millions of dollars that Uber and Lyft spent on this election – which by the way included a number of phony claims about Prop 1 – all carried the message of “vote Yes on Prop 1”. That in a nutshell is what this race was about, and as such it is all anyone needed to know. If this lawsuit goes anywhere, it will be an utter travesty.

Yeah, we’re still talking about the Austin rideshare referendum

The tech community was as divided as everyone else.

Uber

Joshua Baer, founder of Capital Factory, the downtown technology incubator, has been a critic of the proposed regulations. He said he believes the vote sent signals that Austin is hostile to startups.

“Losing Uber and Lyft is a major setback to our reputation as an innovative city and technology hub that is already impacting decisions made by venture capitalists and Fortune 500 executives,” Baer said Monday. “It’s critical that the tech community and City Council come together… before our reputation is damaged further.”

But others scoffed at the notion that the Prop 1 vote could do any long-term damage to Austin’s entrepreneurial reputation. Austin economist Brian Kelsey said the vote is unlikely to have negative ripple effects on startups.

“Prop. 1 may be a setback in how the outside world views our seriousness in local policy making, but branding Austin as ‘anti-innovation” is ludicrous,’ ” Kelsey said. ” If the existence of two ride-sharing companies locally has an impact on your business model, then I’d say Prop. 1 should probably be the least of your concerns.”

[…]

Initially, many tech workers and entrepreneurs said they thought the vote would get industry support because of general opposition to more regulation of emerging technology business models.

But they now say Uber and Lyft’s aggressive marketing tactics derailed the discussion.

“I think it backfired in the tech community,” said Austin entrepreneur Richard Bagdonas, who supported the proposition. “I have talked to many people who said ‘I’m pro-Uber and pro-Lyft, but the number of flyers, calls and texts I received pushed me over the edge.’ ”

Lyft

[…]

Turnout for Prop 1 was dominated by “traditional” voters who reliably show up to vote in state and local elections, Littlefield said. Early voting data showed that 70 percent of the Prop 1 voters were these traditional voters, [Baer] said.

“I’ve seen it time and time again,” he said. “There are people who will vote in May elections and there are people that no matter how vitally important the results of the May election are to their own personal interests, they simply do not vote.”

Political experts said Uber and Lyft underestimated whether support for their service translated into votes.

Take David Goss. He’s a 40-year-old systems engineer for EMC Corp. in Austin. He regularly uses Uber when he’s going downtown for drinks and needs a sober ride home. On paper, Goss sounds like he would be for Prop 1.

But Goss said he voted against the measure. “I do love Uber, I use it all the time,” Goss said. But he said he wasn’t in favor with just letting Uber and Lyft write their own regulations.

“I definitely felt that there was some middle ground, we needed to find a way to ensure the rides were safe and make sure the employees were treated fairly,” he said.

Austin marketing veteran and entrepreneur Josh Jones-Dilworth, who opposed the proposition, said he watched as the discussion — and tech workers’ opinions — morphed.

“It started as a safety issue, and then it became an innovation issue, and then evolved into a corporate bullying issue,” Jones-Dilworth said. “It’s a complex issue, and there was never a consensus. I know a lot of people who changed their mind. And I know a lot of people who stayed on the sidelines because they thought this was a no-win situation.”

David Broockman, a business professor at Stanford University and an Austin native, said startups like Uber and Lyft view themselves as the underdog taking on an established industry: taxis.

“In Silicon Valley there is a tendency to view startups as David against Goliath,” he said, but that doesn’t always translate outside the Bay area, he said, where they are viewed instead as the Goliaths.

Hard to be the David when you’re backed by a few billion dollars in market valuation. For all that people like Uber and Lyft’s service, this election has shown us that liking only goes so far. I’d like to think that they will consider whether they should maybe change their approach a bit, to be more conciliatory and open to compromise, but so far there’s no indication of that. Perhaps we’ll see that when the inevitable statewide regulation bill comes up in the Lege. For all the bluster from some Republicans following Saturday’s vote, the passage of such a bill is not a slam dunk. It’s still the case that collaboration gets you farther in the Capitol than a bludgeon.

In the meantime, more players are hitting the scene.

While Uber has grown into a global behemoth by deploying many thousands of independent contractors, many of those drivers aren’t happy. New ride-sharing startup Juno–which has so far only launched in stealth mode in New York City–will try to make those drivers into its secret weapon.

Talmon Marco, former cofounder and CEO of messaging app Viber (which sold to Rakuten for $900 million in 2014), confirmed to FORBES that he is behind Juno, and promised that the new service under development “will have multiple capabilities that will differentiate it from other such services.”

But likely its biggest differentiator will be driver relations. While Uber has demonstrated its willingness to anger drivers by slashing prices and commissions over the last few years, Juno plans to take only a 10% commission from drivers. And it claims to have “reserved” 50% of its founding shares for drivers.

“At the heart of Juno is a belief that it’s time for a ride sharing service that treated drivers right,” Marco tells FORBES. “It’s time for an ethical, socially responsible ride sharing service. And that’s what we are doing.”

Sounds promising. As I said yesterday, the best thing that could come out of the Austin referendum is for multiple new rideshare services to emerge and find purchase. I mean, if part of the problem with traditional cab companies was that they were shielded by regulations from facing a competitive market, then surely we don’t want Uber and Lyft to be the only game in town for rideshare, right? A competitive market implies the need for competitors, after all. There would be a certain justice in all this if Uber and Lyft’s self-imposed departure from Austin helps enable those competitors. Chris Tomlinson, who has a few choice words for how Uber and Lyft treat drivers, and Roy have more.

Are driverless cars ready or not?

GM and Lyft think theirs are pretty close.

Lyft

General Motors Co. and Lyft Inc. within a year will begin testing a fleet of self-driving Chevrolet Bolt electric taxis on public roads, a move central to the companies’ joint efforts to challenge Silicon Valley giants in the battle to reshape the auto industry.

The plan is being hatched a few months after GM invested $500 million in Lyft, a ride-hailing company whose services rival Uber Technologies Inc. The program will rely on technology being acquired as part of GM’s separate $1 billion planned purchase of San Francisco-based Cruise Automation Inc., a developer of autonomous-driving technology.

Details of the autonomous-taxi testing program are still being worked out, according to a Lyft executive, but it will include customers in a yet-to-be disclosed city. Customers will have the opportunity to opt in or out of the pilot when hailing a Lyft car from the company’s mobile app.

[…]

The new effort is directed mostly at challenging Alphabet and Uber. The Google self-driving car program has gained a sizable lead over conventional auto makers via testing in California and other states, and it received an additional boost this week through a minivan-supply agreement with Fiat Chrysler Automobiles NV. Uber, much bigger than Lyft, has its own self-driving research center in Pittsburgh and is preparing to usher autonomous vehicles in to its fleet by 2020.

I alluded to this yesterday. My reaction remains: Next year? Really? That’s pretty darned aggressive. It’s also pretty interesting considering that the people who are making driverless cars have been suggesting that we should maybe slow our roll a little.

Engineers, safety advocates and even automakers have a safety message for federal regulators eager to get self-driving cars on the road: slow down.

Fully self-driving cars may be the future of the automotive industry, but they aren’t yet up to the demands of real-world driving, several people told the National Highway Traffic Safety Administration during a public meeting Friday.

A slower, more deliberative approach may be needed instead of the agency’s rapid timetable for producing guidance for deploying the vehicles, according to an auto industry trade association.

[…]

A General Motors official recently told a Senate committee that the automaker expects to deploy self-driving cars within a few years through a partnership with the ride-sharing service Lyft. Google, a pioneer in the development of self-driving cars, is pushing Congress to give the NHTSA new powers to grant it special, expedited permission to sell cars without steering wheels or pedals.

But many of those who addressed the meeting, the first of two the agency has scheduled as it works on the guidelines, described a host of situations that self-driving cars still can’t handle:

—Poorly marked pavement, including parking lots and driveways, could foil the technology, which relies on clear lane markings.

—Bad weather can interfere with vehicle sensors.

—Self-driving cars can’t take directions from a policeman.

—Inconsistent traffic-control devices such as horizontal versus lateral traffic lights.

Until the technology has advanced beyond the point where ordinary conditions are problematic, “it is dangerous, impractical and a major threat to the public health, safety and welfare to deploy them,” said Mark Golden, executive director of the National Society of Professional Engineers.

There have been thousands of “disengagements” reported in road tests of self-driving cars in which the vehicles automatically turned control over to a human being, said John Simpson, privacy project director of Consumer Watchdog.

“Self-driving cars simply aren’t ready to safely manage too many routine traffic situations without human intervention,” he said.

There’s also the concern that driverless cars, which by definition will be connected to the Internet, will be vulnerable to malware. We’re not at a point where today’s cars can be successfully hijacked, as dramatized on a recent episode of Elementary, but it is something the industry is gaming out now. The larger point here is that our driverless car future may be farther off than we think. Or maybe it’s closer than we think. We’ll see how that taxi pilot goes.

One more thing:

Executives at Lyft and Uber have said one of the top hurdles to their success is navigating a patchwork of regulations that govern the use of autonomous vehicles and liabilities. In an effort to ease regulatory concerns, Lyft will start with autonomous cars that have drivers in the cockpit ready to intervene—but the driver is expected to eventually be obsolete.

“We will want to vet the autonomous tech between Cruise, GM and ourselves and slowly introduce this into markets,” Taggart Matthiesen, Lyft’s product director, said in an interview. That will “ensure that cities would have full understanding of what we are trying to do here.”

Well, at least we won’t be fighting about fingerprints any more. I shudder to think how much money will be dumped into those lobbying – and possibly electioneering – efforts.

Uber and Lyft do what they said they would

They’ve cut and run.

Uber

Uber and Lyft made good on their threat to end Austin service Monday, pulling out two days after voters rejected their $9.1 million bid to overturn the city’s rules for ride-hailing companies.

Their departure came despite offers from Mayor Steve Adler to return to the table to negotiate a compromise. Meanwhile, smaller ride-hailing firms tried to press their newfound advantage.

“If they’re saying the election results mean they had to leave town, maybe they shouldn’t have asked for the election,” said Jason Stanford, Adler’s spokesman.

“The mayor’s been very clear,” Stanford added. “They are welcome to stay, and he invites them to the table, regardless of what they choose to do at this point.”

[…]

Lyft

In notices posted on their apps Monday, both Uber and Lyft blamed their pullout on the City Council’s rules, making no mention of the failed ballot measure to overturn them.

“Due to City Council action, Lyft cannot operate in Austin,” Lyft’s statement read. “Contact your City Council member now to tell them you want Lyft back.”

Uber’s statement was similar: “Due to regulations passed by City Council, Uber is no longer available within Austin city limits. We hope to resume operations under modern ridesharing regulations in the near future.”

Let’s be clear about one thing: Uber and Lyft were not forced to leave Austin. The rejection of Prop 1 simply means that the city’s existing rideshare ordinance – which as I understand it has not actually begun requiring fingerprint checks yet – remains in place. Uber and Lyft chose to leave rather than operate under those conditions, as Uber has done for the past year and a half in Houston and as both of them have done for longer than that in New York. Nothing about the Prop 1 vote requires them to leave. It is entirely their choice. There has always been room for further discussion on this, though it’s hard to do so when the first move is to go to DefCon 5. But despite all the rhetoric and millions of dollars flushed down the pockets of political consultant and media buyers, it’s not too late to start talking.

What should happen now, then?

Fingerprint-based background checks aren’t great. The FBI’s database is known to be flawed with outdated and inaccurate information. It’s kind of like taking your shoes off before you get on an airplane—it provides the feeling of security while also inconveniencing a bunch of people for show. Still, it might turn out to be the best option—more on that in a second—but as the city considers what regulations are in everybody’s best interest, now that it has ensured that it has a full complement of options at its disposal, it should be looking beyond fingerprinting.

Isn’t Austin stuck with fingerprinting now that people voted down Prop 1?

Nope. If Prop 1 would have passed, the city would have been prohibited from passing fingerprint-based regulations. But now the city is allowed to create whatever regulations it deems appropriate. City council can—and should–be looking to tweak the current ordinance with one that, for example, doesn’t prove discriminatory against drivers of color the way that fingerprint checks do. Although we doubt that Uber and Lyft are particularly passionate about that issue when it doesn’t directly concern them, the Austin chapter of the NAACP and the Urban League certainly are, and the objections they raised deserve to be considered and taken into account.

So what sort of background check should Lyft and Uber do?

That’s the zillion dollar question here. The problem is that most jobs have a process that screens out people who raise red flags. For most companies, you go through an interview, meet the people you’ll be working for, and get offered the chance to interact with the public based on the judgment of someone who is responsible for making sure that the company is represented well. (Depending on the job, it can also come with more formal background checks.) Because the “hiring” process for Lyft and Uber is more of a “sign up” process, the system relies on computer checks to do all of that work. That’s going to result in a process that has definite flaws—and it’s going to take creativity beyond just “run a fingerprint check” to address them. What that specifically looks like is hard to say, but between Austin’s leaders and Lyft and Uber, you’d think there would be enough brainpower to consider some viable options.

[…]

So what would make Uber and Lyft come back to the table, if they can just lobby for new rules in the legislature in 2017?

A couple of things: One, they don’t want to give up market share if a competitor picks up steam here over the next year. Two, it’s hard to keep growing a company that’s opted out of too many markets. Investors who see that Lyft doesn’t operate in Austin or Houston, and who know that they may have to make some threats about leaving L.A., have to give some thought to the growth potential of the company.

So what’s the best case scenario here for everybody?

Smart regulations that don’t rely on fingerprinting would be a good place to start. Austin should want Uber and Lyft operating in the city. Uber and Lyft should want to operate in Austin. Austin should want to create regulations that keep people with a history of DWI arrests, or violence against women, or other red flags like that, from driving people around for money—but it shouldn’t enforce regulations that would, say, keep drivers of color (who are disproportionately arrested for minor infractions that don’t put passengers at risk) from working. That system may not exist yet, but creating it ought to be a priority for everybody.

More than anything, a lot of ego is gonna need to be checked. The people who fought against Prop 1, which had a sort of David and Goliath quality to it, need to recognize that the support they received on Saturday was at least as much of a response to the tone of the campaign Uber and Lyft were running as it was a show of support for the specifics of the current regulations. Drawing a hard line around those specific regulations just because they won the vote would be a short-sighted, wrongheaded move.

Uber and Lyft, meanwhile, definitely need to approach Austin City Council with some humility, and consider not just what makes it easiest for them to add drivers to their ranks, but also that there are legitimate safety issues at stake here that the current regulations fail to address.

As Vox points out, Uber in particular has a choice to make about its public image. At the very least, I don’t think this debacle helped them with that. It would be nice if they came up with a solution – even a suggestion – that was more than “trust us, our process is all you’ll ever need, and if you don’t like it we’ll come after your ass”.

As far as the statewide regulation possibility goes, this is a reminder that there are never any guarantees in the Lege.

The chairman of the House Transportation Committee on Monday said that he prefers cities to set the rules for Uber, Lyft and other ride-hailing companies, even after a municipal vote in Austin has prompted new calls for the state to step in.

Rep. Joe Pickett, D-El Paso, said he’s “more interested in what the public thinks” — and that “they spoke in Austin.” Voters there on Saturday rejected a measure to get rid of the city’s current ride-sharing rules, which will require fingerprint-based background checks.

Some Republicans say the election — and the decision by Uber and Lyft to now leave Austin — shows the need for the state to pass industry-friendly rules. That group grew on Monday to include Sen. Robert Nichols, who chairs the Senate Transportation Committee.

But Pickett didn’t join the dog pile.

If the Legislature were to get involved, Pickett said, it should be through a broad discussion about all car-for-hire models, including taxicabs and limos. And if there are statewide rules, he said, fingerprint-based background checks should be part of the agenda.

“Still, the best would be to let the local municipalities decide,” said Pickett, who stressed that he supports all the ride-hailing options, including Uber and Lyft.

[…]

On Monday, Nichols, the Senate Transportation chairman, said in a written statement that “it is important to create consistency with a statewide policy to ensure all requirements for Transportation Network Companies are uniform across the state.”

“It can be difficult for these types of companies to operate when there are different ordinances in cities that are adjacent to each other,” said Nichols, a Jacksonville Republican.

That’s the first we’ve heard from Sen. Nichols since his comment in January that seemed to support a fingerprint requirement in any statewide bill. This story notes that Rep. Chris Paddie’s bill from last session eventually had a fingerprint requirement in it before it passed out of the House committee. We’re a long way from any bills being introduced, and I fully expect this to be a headline fight next year, but all I’m saying is that the signals are mixed right now about what such a bill might wind up looking like. Don’t take any bets on it just yet.

One more thing, from that Statesman story:

Still, the exit of Lyft and Uber from Austin created an opening for GetMe, a small Texas-born ride-hailing upstart.

“GetMe is seeing an unprecedented spike in driver sign-ups, uploads of the app and transactions on the app,” said Jon Laramy, a company co-founder. “I applaud the city of Austin for standing up for, and listening to, the citizens.”

The service had 350 active drivers in the city as of Friday and another 1,600 in the process of joining up, Laramy added, a number that he expects to grow.

[…]

GetMe isn’t alone in the Austin market. San Francisco-based Wingz is primarily an airport shuttle service but plans to expand its “private car service” in the next month, the company’s CEO said Monday.

Another company called zTrip offers a variety of services, including airport vans, limousines and a Williamson County cab service and also is eyeing quick growth, owner Billy Carter said Monday. A third upstart service, Phoenix-based Fare, told the Statesman it’s interested in Austin.

By far, the best thing that could happen as a result of this, regardless of what goes on next year in the Lege, is for multiple viable competitors to Uber and Lyft emerge. I mean, isn’t that how a free market is supposed to operate? Let a thousand flowers bloom now that the field has been abandoned by the top predators. We all win in that scenario.

More on the Austin rideshare referendum

The fallout continues to fall.

Uber

Austin voters on Saturday decisively rejected Uber and Lyft’s $8.6 million bid to overturn the city’s rules for ride-hailing apps, bringing a stunning conclusion to the most expensive campaign in city history.

The failure of Proposition 1 brought new threats that the ride-hailing giants would retreat from Austin as the neighborhood and labor groups that defeated them on a shoestring budget celebrated.

“Uber, I think, decided they were going to make Austin an example to the nation,” said longtime political consultant David Butts, who led the massively outspent anti-Prop 1 campaign, Our City, Our Safety, Our Choice. “And Austin made Uber an example to the nation.”

[…]

Following the results Saturday night, Lyft reiterated its threat to terminate service in the city as of 5 a.m. Monday.

“Lyft and Austin are a perfect match and we want to stay in the city,” said Lyft spokeswoman Chelsea Wilson, in a statement. “Unfortunately, the rules passed by City Council don’t allow true ridesharing to operate.”

That came just hours after Uber finally put a date and time to its pullout threat: 8 a.m. Monday.

“Disappointment does not begin to describe how we feel about shutting down operations in Austin,” Uber Austin general manager Chris Nakutis said in an emailed statement. He added: “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.”

Austin Mayor Steve Adler, who had urged voters to reject Prop 1 with the hopes of getting Lyft and Uber back to the negotiating table, held out hopes for more talks.

“We’re at a place right now where we welcome Uber and Lyft to stay in the community, and I hope that they’ll continue to talk with me,” Adler said Saturday night. “We need TNCs (transportation network companies) in this community so we have mobility choices, but how we’re going to do that and who we do that with, obviously, at this point, is something that we need to work on and work out.”

My opinion continues to be that while Uber and Lyft are nice to have, the city of Austin did quite nicely without them for a long time. It will find a way to carry on if they leave. And while the concept of transportation network companies is a good one, there’s no law saying it has to be those two providing the service. To me, a fine outcome of their departure will be for another company to take advantage of the opportunity to emerge in a market that isn’t dominated by a couple of operators who care primarily about crafting an advantage for themselves.

All of this has to make you wonder. Why is fingerprinting such a line in the sand? I can see the argument about it limiting the pool of drivers in a needlessly broad way, and I can see the argument that it’s a burden on those who wish to drive. In either of these cases, there is a sympathetic story to be told, and surely a lot of consensus for finding improvements to the process. Surely launching a multi-million dollar effort to repeal an ordinance that went through the normal lawmaking process, after trying unsuccessfully to recall the Council member who led the process to pass that ordinance, is the last arrow in one’s quiver, nor the first thing you try. So why was this a hill that both companies were so willing to messily and expensively die on? Well, here’s one possible reason for that.

Lyft

The San Francisco and Los Angeles district attorneys have accused Uber of failing to uncover serious crimes on the records of some drivers allowed to operate in the two cities. The attorneys said they discovered 25 drivers in the two cities whose criminal records had gone undetected, and at least some records included felonies. Notably, one of the drivers whose criminal record went undetected was a convicted murderer who spent 26 years behind bars.

The discovery would appear to put pressure on Uber to adopt a more thorough background check process in order to stay in consumers’ good graces. But there’s more at stake here: If the company does adopt more rigorous background checks, which could include fingerprinting, drivers seeking classification as employees could try to use the move as evidence they are indeed employees and not private contractors, says one labor attorney.

The issue at hand is how much control Uber exercises over its drivers, according to Aimee E. Delaney, leader of the
 Labor & Employment Practice Group at the Chicago headquarters of Hinshaw & Culbertson LLP. Generally speaking, evidence of an employer attempting to control a person’s behavior can be used to determine that the worker is an employee.

One question that can help determine if someone is an employee is “Does the company control or have the right to control what the worker does and how the worker does his or her job?” according to the IRS website. So theoretically, asking someone to take an extra step to show they are qualified to do the work could constitute a form of control. The IRS admits however, “There is no ‘magic’ or set number of factors that ‘makes’ the worker an employee or an independent contractor” when it comes to control.

“I sympathize with where they are at because I think they are in a difficult position,” Delaney says of Uber, adding that the company has to “walk kind of a fine line.”

If the company simply ran background check materials through an additional database, that probably wouldn’t feed the case of drivers seeking employee classification. But if Uber puts a new requirement on drivers to be fingerprinted, that might come up in such a labor dispute.

Delaney, who represents employers in labor arbitrations, says that while fingerprinting wouldn’t necesarily provide enough fodder to nudge drivers into classifications as employees, she imagines it’s an idea that has crossed the minds of Uber’s legal team.

That makes a lot of sense, no? It’s all about protecting the business model, which depends on the labor being as low-cost as possible. At least until such time as driverless cars become available and make the whole thing moot.

What may also be moot is having this argument at a municipal level. The next step of this battle has already begun.

Today, Senator Charles Schwertner, MD (R-Georgetown) announced he will file a bill in the upcoming legislative session designed to establish consistent and predictable statewide regulation of ridesharing services like Uber and Lyft, also known as transportation networking companies (TNCs). The 85th Session of the Texas Legislature convenes in January 2017.

“It has become increasingly clear that Texas’ ridesharing companies can no longer operate effectively through a patchwork of inconsistent and anti-competitive regulations,” said Schwertner. “Any legitimate safety or liability concern regarding ridesharing clearly deserves to be addressed, and I welcome all parties to engage productively in that discussion. But as a state with a long tradition of supporting the free market, Texas should not accept transparent, union-driven efforts to create new barriers to entry for the sole purpose of stifling innovation and eliminating competition.”

[…]

The issues surrounding ridesharing have also had a significant economic impact on the citizens of Senate District 5, including approximately 40,000 Austin residents living in Williamson County. As a source of employment, ridesharing provides fulltime or supplemental income for over 5,000 Uber or Lyft drivers living in Williamson County, and countless other residents of north Austin, Cedar Park, Round Rock, and Georgetown depend on ridesharing services to commute to work, travel to the airport, or get home safely from downtown.

“I’ve heard from dozens of constituents in my district, including many Austin residents, who depend on either the service or revenue that ridesharing provides,” said Schwertner. “People are free to select whatever method of transportation they prefer, but we shouldn’t be trying to restrict the options available to our citizens when it comes to addressing our transportation needs.”

Yes, I’m sure the anti-Prop 1 forces, which were outspent by more than fifty to one, were in the thrall of Big Taxi. You do you, Senator. I’d advise you to have a statement about economic impact ready for your constituents when that driverless rideshare car initiative comes to Texas. Getting back to the main issue here for a moment, I will note again that Sen. Robert Nichols, the chair of the Senate Transportation Committee, was last quoted saying that a statewide law should have a fingerprint component in it. Whether that’s still his position now, or will be after Uber and Lyft back a dump truck of lobbyist money into his office, remains to be seen. For what it’s worth, the Council members in Houston who have expressed an opinion so far have all been 1) Republican, and 2) in favor of fingerprinting. So this fight next year may be more multi-dimensional than it first appears. Ben Wear, who has a really good take on this, the Observer, and the Rivard Report have more.

Austin rideshare referendum goes down

Boom.

Uber

Preliminary election day results in Austin show 56 percent of voters against Proposition 1, a ride-hailing ordinance supported by Uber and Lyft. With 76.76 percent reporting, 13,957 have voted against the ordinance and 10,901 have voted for.

These numbers mirror early voting results, where of the 54,759 ballots cast, 30,683 (about 56 percent) voted against the ordinance and 24,076 voted for. Early voting for Proposition 1 started April 25 and closed on Tuesday.

[…]

Lyft

Both Uber and Lyft said they plan to cease their Austin operations if the election does not go in their favor. Austin Mayor Steve Adler said he hopes to sit down with Uber and Lyft following the election.

“The people have spoken tonight loud and clear,” he said in a statement Saturday. “Uber and Lyft are welcome to stay in Austin, and I invite them to the table regardless. Austin is an innovative and creative city, and we’ll need to be at our most creative and innovative now.”

Rick Claypool, research director for Public Citizen, a consumer watchdog group, said the clash in Austin is unique because the city’s special election is the first time a proposal backed by Uber has actually gone to voters. Claypool said the city will serve as an “object lesson” for other cities and could cause a “chilling effect” for those considering regulations.

“Likewise, there are probably going to be cities that go out of their way to sort of lower the floor of requirements for companies,” Claypool said. “They’ll say, ‘Come here, we’re Uber-friendly. We won’t make you do those things that those uncooperative places make you do.'”

The election night returns are here. Don’t be misled by the “213 of 229 Precincts Reporting” note, it said that from the beginning and I suspect it was just an oversight. I gave up refreshing the main election returns page at about 10 PM; the most recent update at that time was from 9:46. It’s just a matter of the final margin.

You know how I felt about this. Whether Uber and Lyft follow through on their threat to leave or not was unknown at the time I wrote this. We’ll find out soon enough. I’m glad that this multi-million dollar attempt to hijack the local government process failed. I hope Uber and Lyft learn something from this. I have no doubt that there’s room for compromise and improvement in the process, but that requires a willingness to negotiate in good faith, and not come in with a bulldozer and a bottomless pit of cash to force what you want. If they decide to leave Austin and Uber pulls out of Houston, that will be too bad, but they’re the ones who sent the ultimatum. They went all in and they lost, by a lot. Will they double down or will they dial it back and try a different approach? Like I said, we’ll know soon enough. The Austin Chronicle and the Statesman have more.

What Council members think about the Uber threat

I was scrolling through Facebook and came upon this post from CM Michael Kubosh:

Mayor Turner wants UBER to stay, but they must follow the city’s ordinance that requires a CRIMINAL BACKGROUND CHECK and FINGERPRINTS. Council Member Michael Kubosh said that all public service drivers for buses, cabs, train, limos, shuttles and jitneys require the same CRIMINAL BACKGROUND CHECK and FINGERPRINTS. They must follow the rules. They came to Houston during the 2014 Rodeo operating illegally and the City Council changed the Ordinance to make room for their business model. NOW LOOK WHAT THEY ARE WANTING.

Which got me to wondering about other Council members and what they thought. Of the five Council members that voted against the original ordinance in 2014, four remain on Council: Kubosh, Jack Christie, Jerry Davis, and Mike Laster. I went looking, via Google, Facebook, and Twitter, to see who else has had something to say.

And the answer is, most of them have not said anything as yet. One who has is Brenda Stardig, who is the Chair of the Public Safety committee:

CM Dave Martin was quoted in one of the stories I blogged about after Uber issued its ultimatum:

“If you don’t want to follow the rules we all agreed to, have a good opportunity in another city,” District E Councilman David Martin said. “But we cannot be blackmailed when it comes to public safety.”

And that’s pretty much it for actual opinions. The only other Council member to say something was Greg Travis:

Mayor Sylvester Turner wants uber to stay in Houston, but wants the company to operate under the same rules as other transportation companies. Uber wants to eliminate regulation for its drivers to have city fingerprint check. Rather, uber wants to use its own background check. Mayor says uber’s background check inadequate. Your thoughts?

Comments on that post ran more in Uber’s favor than against, for what it’s worth. Also for what it’s worth. all four of these Council members – Kubosh, Martin, Stardig, and Travis – are Republicans; so is Jack Christie among the No votes from 2014, while Davis and Laster are Dems. I mention that mostly to note that if Uber is trying to make a free-market/deregulation argument, it’s not working on the kind of people you’d think it might work on. This discussion is just getting started, and Lord knows Uber is willing and able to dump a ton of resources into winning it, so this is hardly a final whip count. But clearly, Uber has some ground to make up to win this one.

Rideshare robocall lawsuit filed

This ought to be interesting.

Uber

Ride-hailing company Uber was hit with a class-action lawsuit on Wednesday over “robo-text messages” the company has been sending Austin customers seeking their support for a controversial referendum on the ballot Saturday.

The suit, filed in federal court, claims Uber violated the federal Telephone Consumer Protection Act by sending “thousands of unwanted text messages” to Uber users in the city without prior consent.

“Uber has violated the Telephone Consumer Protection Act … by robo-texting thousands of unwanted text messages to the cell phones of thousands of Uber users in Austin, Texas – all without the prior express consent of those receiving Uber’s text messages – as part of a political campaign by Uber to oppose mandates from the City of Austin which impose various background check procedures for Uber drivers,” argues the lawsuit filed by Melissa Cubria in the U.S. District Court for the Western District.

[…]

On Wednesday, Our City, Our Safety, Our Choice, a group against the proposed ordinance, called for an investigation into the “questionable election activities” by Uber and Lyft.

“Uber and Lyft’s $8.8 million and growing in corporate spending as of Tuesday is a testament to how far these corporations are willing to go to rule Austin and overturn Austin’s public safety rules,” said Laura Morrison, a former Austin City Council member, during a Wednesday press conference. “It is obscene to see unprecedented corporate millions poured into a political campaign in an attempt to deceive and manipulate the people of Austin.”

Austin political consultant Mark Littlefield also spoke at the conference on the ad campaign, pointing specifically to the frequent texts sent by both Uber and Lyft.

Cubria’s lawsuit contends that the Telephone Consumer Protection Act does not include restrictions on live, manual communications — only generated messages.

“It’s absurd to imagine that Uber paid individual, living persons to manually type and then manually send thousands (and perhaps tens of thousands) of individual text messages in support of a political campaign underway in Austin, Texas,” the lawsuit reads.

I’ve seen some screenshots of these texts from folks on Facebook. Maybe some were sent by actual people and not an automated process, but who knows? I can’t wait to see how this one plays out.

Austin Uber referendum update

There’s still a crapload of money being spent by Uber and Lyft to win this thing.

Uber

In the last month, Ridesharing Works for Austin – the PAC established by transportation network companies Uber and Lyft – raised $4.9 million and spent $4.6 million promoting Prop. 1, the TNC-supported ride-hailing ordinance. With another million in the pipeline, that brings to $8.1 million the TNC’s intend to spend for the May 7 election.

That was the headline news contained in Friday’s “8-day-out” reports filed with the Austin City Clerk. By contrast, Prop. 1 opposition group Our City, Our Safety, Our Choice raised $88,000 over the last month (spending $68,000), bringing the group’s fundraising to $100,000 for the campaign thus far.

According to the Austin American-Statesman, RWA reported an additional $1 million contribution from Uber just before the filing deadline, for a total of $8.1 million. In case your calculator is overheated, that’s more than an 80 to 1 advantage to the Uber and Lyft resources, and a staggering record for money spent in an Austin city election – the previous standard was $1.2 million spent by Mayor Steve Adler in his 2014 campaign. Even the generally stoic Statesman transportation reporter Ben Wear began a Friday Tweet on the Uber and Lyft spending, “Mother of God” and ended: “Mind=boggled.”

Click over to see details on how all that money was sloshed around. I’d have to go back and do the math, but $8.1 million rivals what all of Houston’s Mayoral candidates raised last year; it’s almost certainly more if you take out self-funding. To put it mildly, that’s an awful lot of money to spend on a local election. But of course, it’s not just about Austin.

Lyft

Let’s put that figure in context. Not only is $8.1 million nearly seven times the most expensive municipal election in Austin’s history—the 2014 campaign of Austin Mayor Steve Adler, who set a new benchmark in political spending just two years ago—but it’s also over a million dollars more than Ted Cruz spent in his 2012 Senate campaign to beat then-Lieutenant Governor David Dewhurst. This is where we are with Prop 1, a municipal election about a very narrowly tailored piece of the city code that applies strictly to ridesharing services is costing more than a successful U.S. Senate campaign.

That is, er, friggin’ crazy, but it also helps reveal the stakes here. That money could certainly pay for a whole lot of fingerprint background checks that Uber and Lyft say are such an onerous burden (202,500 of them, to be exact, at $40 a pop), but it’s not really about whether fingerprinting is too expensive of a process to keep Uber and Lyft profitable. The campaign, ultimately, is a matter of principle for the companies—and they’re not just spending the money to win in Austin, they’re spending the money to show other cities considering similar regulations that they’re in it to win it.

The “yes on Prop 1” forces—that is, the Uber and Lyft side of the battle—have outspent their opponents at a rate of 81:1. (That crushes the argument that the regulations were initially passed by city council as the result of campaign contributions from the taxi lobby—if Austin’s city council was bought and paid for for a few grand, Uber and Lyft clearly slept on a great chance for bargain shopping.) That’s a huge amount for an election in Austin, but it could be worth it to send a message to Los Angeles, Miami, Atlanta, Denver, and other cities contemplating a fingerprinting requirement that this isn’t a fight worth picking.

The fact that the fight over Prop 1 isn’t strictly about Austin is clear in other ways too. Opponents of the recall campaign note that, when fingerprinting requirements went into effect in Houston, Uber continued to operate in that city. So if they didn’t follow through in Houston, why would Austin be any different? That argument is harder to make now than it was just a week ago: Uber announced on Wednesday that it was considering leaving Houston if the fingerprint regulations there aren’t overturned. That threat comes without a specific timetable, but the timing of the announcement—just as the “Uber will leave Austin if the regulation passes” argument needed some more urgency—suggests that the strategy here is a lot more than local.

All of that is fascinating, but ultimately, the expenditures, lobbying, messaging, and gamesmanship at work here are only part of the puzzle. Is all of this enough to get people to actually vote?

Early voting totals have been quite robust in Austin. As the TM Daily Post notes, given the unanimous opposition to Prop 1 among the reliable-voter factions, some of that money Uber and Lyft have spent has been to bring out the less-likely voters, whom they hope are in their corner. They’re getting the turnout; whether those voters are indeed on their side, and if there’s enough of them, remains to be seen. Whatever happens in Austin, Houston is next in the spotlight. The Chron urges Mayor Turner to stand strong.

For too long, Houston’s ride-for-hire business was dominated by a taxi cartel that used restrictive ordinances to keep out competition. Uber’s arrival smashed that status quo and brought Houstonians a quicker, cleaner and cheaper free-market alternative to rickety taxis.

Sure, Uber willfully disobeyed local laws and used every trick in the book to put political pressure on City Hall, but it was worth it so that Houstonians wouldn’t have to wait two hours to learn that a cab wasn’t coming. In the end, City Hall hammered out a deal to remove the regulatory barriers that prohibited Uber from entering the market.

But apparently that wasn’t enough. Now, as Turner and council tackle a budget crisis, a pension mess and all the fallout of recent floods, Uber expects them to drop everything and put its bizarrely specific pet issue on the immediate agenda.

Don’t let them take you on a ride, Mayor Turner. Don’t give in to their threats.

In the world of political carrots and sticks, Uber deserves a good bop on the nose for its tone-deaf and entitled attitude towards our city.

As I said before, that will be easier to do if the Austin referendum goes down. I’ll post results on Sunday.

Finally, I received the following press release from Uber in my mailbox yesterday morning:

As the Houston City Council considers revising the City’s ridesharing ordinance, a poll commissioned by Uber indicates that the vast majority of Houstonians support modernizing the outdated rules.

In the past nine months, a growing number of Texas cities have adopted new ridesharing regulations that uphold strong safety standards while also preserving economic opportunity for Texans. According to a survey conducted by We Ask America, 73 percent of Houstonians support changing the rules to make them more in line with the rest of the state.

The poll also revealed that 72 percent of Houstonians believe people are less likely to drink and drive since Uber and other ridesharing services launched.

The survey was conducted of 1,015 likely voters in Houston using live interviewers from both landlines and cellphones. The margin of error was ±3.0 percent.

Sounds impressive! Here’s a copy of the basic poll data. The question about changing the ordinance reads thusly:

Houston has more regulations on ridesharing services than any other city in Texas, which has forced some companies to cease operations. Would you support the City of Houston adopting new rules that are more like other Texas cities to increase access to safe rides?


Response           Percentage

Supports changing      72.51%

Oppose changing        12.81%

Not sure               14.68%

Crosstabs are here. I daresay that one could garner a different percentage with an alternate but equally accurate question about the issue. It’s a good starting point for Uber, but it’s just that, a starting point. How the issue is presented matters greatly, and it’s why I called the forthcoming fight over Uber and Houston’s current ordinance a public relations fight. The side that gets to define the question to be answered is the side that will win. BOR has more.

GetMe waits in the wings

No matter what happens with the rideshare repeal referendum in Austin, there will be at least one vehicle for hire company in the capital city.

Early voting is underway in Austin on Proposition 1, where residents will decide which regulations the city should adopt for vehicle-for-hire companies like Uber and Lyft.

Both companies have pledged to leave the city if the proposed ordinance is not adopted — a claim they’ve made good on in three Texas cities this year. But at least one ride-hailing company insists it can fill the gap Uber and Lyft would leave behind.

“We’re not going to be the donkey or the elephant,” said Jonathan Laramy, the chief experience officer for Get Me LLC, which the company has stylized as getme. “We’re here to stay. Vote Prop. 1, vote Prop. 2 – we don’t care.”

[…]

Laramy said getme — which currently operates in Austin, Dallas, Houston and Las Vegas — is willing to adhere to any local regulations, as long as the process for obtaining fingerprint-based background checks is “fast, easy and cost effective.”

“We’re a good corporate citizen,” Laramy said, adding that the company is willing to collaborate with cities on their regulations.

While his company is still working out the specifics, Laramy said that “at some point, we will fingerprint all of our drivers” — even in cities without a requirement.

If Austin voters do not approve the proposed ordinance, Uber and Lyft have said they will leave the city — although The Daily Dot reported last week that Uber fully intends to stay, regardless of the outcome of the election. If the companies leave, Laramy said getme would be prepared to process a potential influx of driver applications.

“We have a platform where we could actually — and we already have this in place and ready to go — sign up conceivably 5,000 drivers in a month, if not more,” Laramy said. He would not elaborate on specifics of the plan, but he said it involved “using information that’s already been done and then verifying and showing us that.”

After starting up in Dallas in February 2015, getme recently relocated its headquarters to Austin. Laramy said it has more than 10,000 drivers across the four cities where it operates, more than 2,000 of whom are in Houston. The company boasts 6 corporate employees and a handful of contractors, making it a significantly smaller operation than ride-hailing giants Uber and Lyft.

Laramy says the company soon plans to offer services in Los Angeles, Denver, Chicago and Atlanta. In Texas, he said, the company is launching operations in Galveston next week and Corpus Christi this summer.

This follows Uber’s cessation of operations in Galveston and Corpus Christi earlier this year after both cities adopted fingerprint background check requirements. Laramy said getme’s interest in both cities was unrelated to Uber’s actions and that they had planned to launch in both locations well before Uber left.

“You can’t get home if you take a ride down there,” said Laramy, describing someone looking to travel between Houston and Galveston using getme. “It’s silly not to have both cities.”

See here and here for more on GetMe, which will likely get a little extra exposure here in Houston now as well. That Daily Dot report seems thinly sourced and contradicts everything we’ve heard so far, but who knows. Regardless of the outcome on May 7, I suspect there will be more than a few people in Austin looking for an alternative to Uber and Lyft, so whether they clear out or not, this is a smart move on GetMe’s part. Has anyone out there used them?

More on the Uber ultimatum

Initial reaction is not terribly receptive.

Uber

Ride-hailing giant Uber threatened Wednesday to stop operating in Houston unless city leaders amend local regulations the company said are making it tough for them to recruit drivers.

The ultimatum, the latest skirmish in what has been a contentious relationship between Uber and the city since it started operating here two years ago, drew a strong rebuke from city leaders.

“This is just not how we do business in Houston,” said Mayor Sylvester Turner, who added the city “will not compromise on public safety.”

[…]

The Uber announcement, which officials viewed as a threat to meet the company’s demands or lose the service, was met with frustration by city leaders, some of whom have grown increasingly exasperated by the tumult.

“If you don’t want to follow the rules we all agreed to, have a good opportunity in another city,” District E Councilman David Martin said. “But we cannot be blackmailed when it comes to public safety.”

[…]

Uber and its supporters argue that part-time driving for the company helps people make money while keeping rates for riders cheap.

The company in its report said drivers take an average of four months to sign up with Uber and complete the city permitting process. Houston officials said the longest a driver has waited is two months, and that the average time to clear the regulations is 11 days. About 47 percent of drivers received a license within a week, officials said.

“What they are putting out is factually incorrect,” Turner said, adding that he thought the company’s motive is to put pressure on politicians to capitulate.

See here for the background. I didn’t expect Uber’s announcement to be greeted warmly, but I am a bit surprised that no one stepped forward to defend them, or at least to criticize the fingerprint policy, in the story. CM Martin’s comment is of particular interest, since Uber’s main allies on Prop 1 in Austin are a couple of conservative Republican Council members there. I’ve look around at other coverage but have not seen any other reactions from Council members. I will be very interested to see who, if anyone, is in Uber’s corner on this. It was one thing to advocate for allowing Uber to operate here. This is a whole ‘nother level, and unless a Council member comes under pressure from constituents, it’s rather a large stretch.

The Press brings up another aspect of this fight.

Notwithstanding the curious timing (voters in Austin will decide May 7 whether to keep similar regulations; early voting for the ballot measure started this week), it’s hard to know what to make of Uber’s claims. Officials with the City of Houston insist that, by pretty much any trackable measure, Uber has been a resounding success here. The city’s Administration and Regulatory Affairs department says that every month it sees an increase in drivers who want a license to drive for the company. And, according to city officials, judging by the company’s revenue in Houston (under the regulations passed in 2014, Uber pays 2 percent of gross bookings to the city), Uber is doing quite well.

It seems there’s either fundamental difference of interpretation or someone’s not telling the whole truth. We’d love to get to the bottom of this, but here’s the problem: Uber has sued to block the city from releasing pretty much any internal data that could show whether Houston’s regulations have been a success or unreasonable burden for rideshares.

Lara Cottingham, deputy assistant director of the city’s Administration and Regulatory Affairs department, insists that Uber has had an undeniably good run here since the city began enforcing its rules for licensing drivers for so-called transportation network companies (or TNCs) like Uber, limo services and taxi companies. “The number of drivers is increasing, their revenue is increasing, everything seems to be working out for them very, very well,” Cottingham told us. “But because Uber sued us to stop us from releasing [those numbers], I can’t tell you how successful they are.”

[…]

While Uber claims it takes drivers on average four months to get a city license, Cottingham says that’s just not the case. She says that according to a survey the city conducted this spring (which, of course, she can’t release because of Uber’s lawsuit), nearly half of all drivers got their license within a week of applying – almost all (about 84 percent) had al license within three weeks of applying, she claims. Whatever the case, Uber’s Meridia said in the letter to city leaders yesterday that demand in Houston “continues to grow approximately twice as fast as our ability to onboard qualified drivers.”

Cottingham says the city has streamlined the process as much as possible, but what Uber’s really asking for – axing the city’s additional background check provision – isn’t an option.

KTRK also noted that some of the facts in dispute cannot be checked on either end. That makes this more of a PR battle than anything else. Do people, who clearly like using Uber’s service, side with them against the city and buy into the argument that needless regulation is making it impossible to operate? Or do they see the fingerprint requirement as a basic safety measure, which Uber should have no issue with complying? That seems to me to be the basic outline of the dispute, and it’s why I’m so interested in who Uber’s proxies will be in the fight. I’m sure Mayor Turner’s response to this has been along the lines of “I don’t need this $#!+ right now”. Who will be on his side? BOR has more.

Uber says it will leave Houston if it does not change its fingerprinting requirement

I called it.

Uber

Uber announced Wednesday that the company plans to cease operations in Houston if the city council does not repeal its existing regulations relating to vehicle-for-hire companies.

Houston is one of two cities in the country where Uber continues to operate despite a local requirement that its drivers undergo fingerprint-based background checks. Uber has recently left three cities in Texas for approving similar regulations and has threatened to do the same in Austin.

The company’s main competitor, Lyft, pulled out of Houston over a year ago in response to the new rules requiring its drivers to undergo fingerprint-based background checks. Uber had continued to operate in the city while publicly criticizing the regulation as burdensome.

“We have worked hard and taken extraordinary steps to help guide drivers through the current process in Houston,” said Uber General Manager Sarfraz Maredia in a letter to Houston City Council on Wednesday. “However, a year and a half later, it is clear the regulations are simply not working for the people of this city.”

Uber also released a report Wednesday detailing, “The Cost of Houston’s Ridesharing Regulations.” The report claims Houston’s regulations have led to a decrease in Uber drivers and in turn, “fewer safe rides.”

Here’s Uber’s press release, their letter to Council, and the report mentioned in the story. Before I get into any details, here are some further news bits. First, from the initial Chron story.

No departure date has been set, Uber spokeswoman Debbee Hancock said.

“We have not set a specific deadline,” she said. “We want to work with the city to develop regulations that work for riders, drivers and the entire community. We understand this process may take a few months.

[…]

Meanwhile use of Uber in Houston surges, something both sides have said bolsters their case. The city argues use means Uber is profitable even with the regulations, though the company says they stifle supply of drivers.

From the Statesman:

The company does not disclose to the media or public how many drivers it has working in Houston, and it obtained a court order preventing city of Houston officials from releasing that information. (Lyft does not operate in Houston.)

The report released Wednesday by Uber includes a chart purporting to show drivers-per-million residents in Houston, Austin and Los Angeles, and the chart is presented in such a way as to imply that Austin (with no fingerprinting required until Feb. 28) has many more drivers per million residents.

But the chart has no numbers listed on its vertical scale of drivers per million residents, rendering it qualitative in nature, not quantitative. Given that and the company’s refusal to release driver figures, it is impossible to confirm the company’s claims about driver supply there.

The letter and report do not mention that Houston has a process under which a driver can get a 30-day “provisional” license without first going through fingerprinting. But according to Uber, a Houston driver, even to get that provisional license, must complete a physical, take a drug test, appear at Houston municipal court to get a check of outstanding criminal warrants, buy a fire extinguisher for the car, get his or her car inspected by a city inspector and get an Uber identifying marker for the car.

From the Houston Business Journal:

According to the letter and a corresponding report on Uber’s Houston operations, 59 percent of its Houston fleet drives less than 10 hours a week. That’s compared to 79 percent of drivers in Austin, and 77 percent in Houston’s outer limits. Uber argues that for these part-time drivers, the regulations are too oppressive and prevents new drivers from signing up.

Mayor Turner held a press conference yesterday at 4 to give his reaction. The Chron story that contained it was updated too late for me to see it last night, so I’ll do another piece tomorrow to discuss that. Click2Houston reports him saying he was “surprised” and that when he had last spoken to Uber reps a few months ago they gave no indication they were dissatisfied; I received another statement from Uber later in the day that takes issue with that, but I’ll get to all that tomorrow. The one thing that surprises me about this is that Uber announced it before the results of the Austin referendum are known. I had assumed they’d wait and pounce if they were successful in repealing Austin’s ordinance; if they failed, I figured they’d still make some move in Houston, but they might be more circumspect about it. Winning the referendum in Austin gives them leverage, which I strongly suspect is part of the point. Maybe this is a show of confidence on their part, maybe it’s just bravado, or maybe this was the plan all along. Who knows?

There are three logical ways Houston can go with this:

1. Do what Uber wants, which would surely have the effect of bringing Lyft back as well. That would not be my first choice, but if Prop 1 passes in Austin, there may be a lot of sentiment here for that.

2. Stand pat and let Uber do what it’s going to do. Get Me is operating in town, so it’s not like there’s no vehicle for hire alternative. One could argue that Uber’s abandonment of many Texas cities, potentially including Austin, would pave the way for another competitor to arise. The demand clearly exists for this service, and opportunities like this don’t come along every day. This is a better strategy if Prop 1 fails, and the bigger the margin the better. It also assumes a commitment to ensuring that no legislation that pre-empts local rideshare ordinances gets passed in the 2017 Legislature.

3. Try to negotiate a compromise. I still kind of like Austin Mayor Adler’s proposal for voluntary fingerprinting, which then becomes part of a driver’s profile and which customers can request. Let’s see what the free market has to say about that, shall we? There are certainly other possibilities, and again, this is likely to be more feasible if Prop 1 goes down.

Anyway. I don’t know as I write this what Mayor Turner had to say beyond his surprise, nor do I know what the prevailing opinion on Council is. Whatever the case, I’m sure this will be a big part of the discussion over the next few months, which I’m sure is exactly what the Mayor wanted given the forthcoming budget battle, the ongoing flood cleanup, the continuing search for an HPD chief, and everything else on his agenda. Well timed, Uber.

Endorsement watch: Against Prop 1

The Statesman urges a vote against the divisive referendum to repeal Austin’s ordinance regulating transit network companies like Uber and Lyft.

Uber

Voting against Prop. 1 is the best way to ensure that Lyft, Uber and other ride-hailing service drivers, undergo the most thorough criminal background checks endorsed by law enforcement: fingerprint checks. By contrast, Lyft and Uber are demanding name-based background checks. Prop. 1 would accomplish that by eliminating fingerprint checks. But you won’t see or hear mention of “fingerprint checks” in ads or fliers Uber and Lyft are floating.

You also won’t hear or see an equally important issue at stake in the May 7 election: Whether it should be corporations or Austin’s elected leaders that write the rules for doing business in the city. That power, in our view, should remain in the hands of the democratically elected officials who represent Austin residents — not private companies with deep pockets. Voting against Prop. 1, crafted by Lyft and Uber, keeps that authority with Austin’s elected City Council.

On those terms, the question on the ballot is relatively simple, but the issues are being cleverly camouflaged in the high-dollar ad campaign being waged by Lyft and Uber through the companies’ political action committee, Ridesharing Works for Austin. Lyft and Uber contributed $2.2 million to the group — an unprecedented amount for an Austin election. The primary group opposing Prop. 1, Our City, Our Safety, Our Choice, reported raising and spending less than $15,000.

[…]

Lyft

Over the past months, Lyft and Uber have used various messaging to drive support for their Prop. 1. Initially, the companies threatened to bolt if the City Council required fingerprint checks. Then they said approving Prop. 1, which eliminates fingerprint checks, would keep the companies operating in the city.

Their step away from that message might signal that the public favors fingerprint-based background checks or is divided over that point. Either would be risky for Prop. 1.

Certainly a city like Austin needs as many transportation options as possible, so if Lyft and Uber left it would greatly diminish the ability of Austin residents to move around in an increasingly congested city. And no one denies that Lyft and Uber contribute to public safety in taking drunk drivers off the road. That is why we urged the City Council to compromise with Lyft and Uber through incentives or other voluntary measures to get drivers to undergo fingerprint checks — rather than requirements.

The council could modify its current ordinance to work toward that goal. But if voters approve Prop. 1, fingerprint checks will be eliminated and Lyft and Uber will have little — if any — incentive to compromise.

For all of those reasons, as well as the other safety requirements that would be eliminated by tossing out the current ordinance and replacing it with Prop. 1, Austin residents should reject Prop 1.

See here for some background. I basically agree with everything the Statesman editorial board says and would vote No if I were in Austin. I also continue to believe that if Prop 1 passes, it’s just a matter of time before Uber takes action to eliminate Houston’s fingerprint requirements. I would very much rather not see it come to that.

In his email newsletter, Ed Sills of the AFL-CIO echoes some of these concerns and provides a bit of on-the-ground reporting:

My family has come to cherish and dread (“dreadish”?) the half-dozen calls from “Research Center” each day over the last few weeks. My wife made it clear to the Uber folks that we are unalterably AGAINST the ordinance, but evidently they noticed there are four voters in our household, so we seem to be getting four times the calls. My personal technique in answering these calls is to count to two during the delay and hang up at the moment a live voice comes on. I figure the more time they spend trying to contact a household where they are about to go 0-4, the less time they can spend talking to people who are gullible enough to believe the lies spewed in this Rich Uncle Pennybags campaign.

I have never done a block-walk as overwhelmingly locked in as the one my daughter and I went on Saturday in the Highland neighborhood in Austin, and I have walked some great progressive neighborhoods in contested elections. Nor have I ever previously experienced multiple situations in which folks were staring daggers at us until they realized we were in agreement – and then greeted us as old friends and took signs. (At one point, I told my daughter to go talk to a 78-year-old woman – her first solo encounter on a block-walk – while I knocked the house across the street. “You can probably outrun her if you have to,” I explained. When I stole a glance, the woman was practically giving Graciela a hug.)

I have never before done a block-walk in which all I had to say to get a commitment was, “Don’t you hate those ads on television?” And people still held forth on the merits about why they can’t stand what Uber and Lyft are doing.

Thank goodness I didn’t have to explain every nuance of the ordinance approved by the Austin City Council, which sets standards for fingerprint checks, fees to be collected from ride-share companies, etc. People understand the proposed ordinance written by Uber and Lyft relaxes the background check standard and lowers the fees the companies have to pay. But this is one of those rare political situations in which while the details may matter, all you absolutely have to know is that the proposal at hand is, well, Horse Feathers. (Trust me, Groucho Marx lovers, you want to click on this link.)

A large majority of voters we spoke to get that a fundamental principle is in play. If Uber and Lyft can spend millions to write their own ordinance in Austin, they will be trying the same thing next in Houston, which adopted strong fingerprinting requirements for drivers. And regardless of how that goes, Uber and Lyft will be at the forefront of the right-wing move in the Texas Legislature to take away the ability of local governments to make progress not just on ride-share regulation, but on wages, discrimination and work rules. A success by Uber and Lyft would launch a parade of corporations that would weigh options and budget millions more to overturn local laws that offend them.

The try-anything attitude among supporters of Prop 1 has continued. The Austin Chronicle reported that the U.S. Chamber of Commerce warned Austin may jeopardize its “Smart City” initiative if voters turn down the Uber/Lyft ordinance rewrite. Apparently the bald-faced lie in the pro-Prop 1 ads that Austin taxpayers would suddenly be on the hook for fingerprint checks if they vote “no” wasn’t working.

This election is about a larger issue – the ability of local voters to control their local destiny.

Sills notes that this is no prediction of victory, and that turnout in an oddball special election is paramount. It’s all about who shows up. I for one would rather live in a world where this sort of thing fails. I hope I have enough company in that regard.

An outside view on Uber in Houston

The Statesman looks at how Austin’s fight with Uber and Lyft over fingerprint requirements compares with other cities in Texas, including Houston.

Uber

Officials in Houston said they decided early on that their city, despite having almost 2,500 licensed taxis, could benefit from the emerging ride-hailing industry. So they approached Uber and Lyft a few years ago and began to try to work out a framework for operations there.

That stringent framework, including a requirement for fingerprinting, drug testing, physicals and vehicle inspections, passed the Houston City Council in August 2014, just two months after Uber and Lyft had more or less barged into Austin and set off a furor by operating in defiance of city law. At first, Houston officials say, Uber officials had nothing but praise for the new law and worked with Houston to set up procedures and a facility for licensing of ride-hailing drivers.

Lyft, however, left town. That company operates in only one place that requires fingerprinting: New York City.

The Houston law took effect in November 2014, and the city’s permitting center in downtown Houston, along with a temporary off-site location to handle an initial rush of drivers, began operations, said Lara Cottingham, Houston’s assistant director of administrative and regulatory affairs.

Drivers can get a 30-day provisional permit without fingerprinting, Cottingham said, although they do need to undergo the physical, drug test and a check for active criminal warrants. Then, within that month, the drivers would have to be fingerprinted and pass the background check to get a two-year ride-hailing license.

Getting a provisional license at the agency’s Houston office, can take as little as 20 minutes, Cottingham said. The process of being fingerprinted and getting background results from the FBI, which can be done during those 30 days after the applicant is already driving, can take three to five days, she said.

Uber spokeswoman Jenn Mullin contends that jumping through those hoops can take several weeks and that it has been a noticeable deterrent to becoming a driver for the company. That, in turn, has increased waiting times for rides well beyond the average 3-minute wait that Uber customers see in Austin, she said.

But testing this assertion is difficult. Mullin declined to provide driver or wait time figures in Houston. And the company has resisted, through the courts, any attempts by the press and public to find out how many drivers have Houston-issued ride-hailing permits.

When Uber lobbyist Adam Blinick testified in December before the Austin City Council, [Austin City Council Member Ann] Kitchen asked him why the company was resisting fingerprinting in Austin but operated with it in Houston.

“Houston has been a very difficult city for us to operate in,” Blinick said. “It requires a lot of resources. It does not scale to a good quality of service.”

So, Kitchen asked, would Uber be leaving Houston anytime soon?

“I’m not in a position to answer that tonight,” Blinick said.

That’s a question I’ve been pondering too, as you know. I feel like if Uber and Lyft win this election in August, the issue will come up again in Houston whether Mayor Turner and Council want it to or not. The article also looks at the experiences in San Antonio and Midland, where Uber backed out after an agreement had been hammered out, so go read the whole thing.

Get Me goes to Galveston

Swooping in to fill the gap left by Uber’s departure.

Galveston is close to getting app-based transportation back.

Get Me, a Dallas-based company that started serving Houston in October, has submitted an application with Galveston to provide ride services on the island, city spokeswoman Kala McCain said Monday.

Galveston has not had any competition to cabs since Uber – the most popular ride-hailing service – left the city over its decision in February to regulate the company exactly as it does taxi firms. The loss of Uber was predicted to mostly hit tourists, especially the cruise lines.

Get Me, which provides both ride and delivery services via smartphone app, has started Galveston’s application process, McCain said. Licensing is a multi-step process that includes providing detailed insurance and licensing information.

“It is my understanding everything is going well,” McCain said, saying the company could be operating in a matter of a few weeks.

Get Me is a new entrant on the scene, operating in a handful of places so far. Galveston was recently dumped by Uber, so this is an opportunity for them to come in and have this market to themselves. They have said that they will comply with municipal ordinances that mandate fingerprinting as part of the background check process for drivers, so that opportunity for them is potentially lucrative, especially if Austin rejects that referendum to repeal its ordinance. Has anyone used Get Me? I’m curious what you think, in particular how the experience compares with Uber and Lyft.

UberACCESS debuts in Houston

Good to see.

Uber

A partnership that has helped disabled people connect with a popular ride service launched in Houston at midnight.

Uber officials confirmed UberACCESS, which offers wheelchair-accessible rides for the same price as UberX, began service Wednesday. Like all Uber service, it is available via smartphone app, 24 hours a day.

“I’m thrilled to see Uber applying the same creative ingenuity to provide more consumer choices and opportunities for Houstonians with accessibility needs,” former California Congressman Tony Coelho, co-author of the Americans with Disabilities Act, said in a statement. “UberACCESS will empower people requiring wheelchair accessible vehicles to get a ride when they need one by simply pressing a button.”

The service fulfills a goal of the city’s transportation accessibility task force that helped write regulations related to allowing Uber to operate legally in Houston. As part of its suggestions, the task force allowed taxi companies and app-based companies a choice of having a set number of vehicles that were wheelchair accessible or provide service to disabled residents based on how quickly they could provide a ride.

Toby Cole, who led the accessibility committee, said the goal of both options is improved quality of service for those who are blind, wheelchair-dependent or otherwise in need of assistance.

“I am hopeful,” Cole said of the rules leading to better service. “We tried to close down as many loopholes as possible.”

[…]

In other markets where UberACCESS has debuted, the company has partnered with other firms capable of providing rides to wheelchair-bound riders. Company officials would not disclose the name of the Houston area partner.

See here for the background. The story emphasizes that the regulations for UberACCESS were agreed to by Uber and the cab companies, in addition to the disability activists. One hopes that means this will work well for everyone, and will provide a decent, cost-effective option for a greater population. If it does work as hoped, then it ought to attract the attention of Metro, since like many other transit agencies around the country it has had to deal with an increasing budget for its MetroLift service, and needs to seek less expensive alternatives to provide that.

Several U.S. transit systems looking to defray costs of providing services for the disabled are weighing partnerships with Uber and Lyft, unsettling some advocates who note that ride-hailing services have themselves faced criticism over accessibility.

Paratransit, better known under names like “The Ride,” ”Access-a-Ride,” or “Dial-a-Ride,” is required under the 1990 Americans with Disabilities Act. But the costs, which include door-to-door pickup and drop-off, can be steep.

The average cost of operating a single paratransit trip is about $23 in the U.S., compared with less than $4 for the average trip on bus or light rail. In Boston, the average cost per ride is about $45, in Washington, about $50, and in New York, nearly $57, officials said.

Transit agencies nationwide logged about 223 million paratransit trips at a cost exceeding $5.1 billion — about 12 percent of total transit operating costs — in 2013, according to the most recent data from the American Public Transportation Association. The price tag is particularly high in major cities, where agencies struggle with regular service and maintenance.

[…]

A potential incentive for riders: Uber or Lyft can be summoned immediately with an app; trips on MBTA vehicles must be scheduled a day ahead.

“My guess is it will be very appealing to people who need to go shorter distances where the fares are under $15 and they can get an on-demand ride as opposed to booking 24 hours in advance,” said Brian Shortsleeve, the agency’s chief administrator.

But convenience comes with a catch.

With a limited number of wheelchair-accessible vehicles, the ride-hailing services would be available largely to people who can walk. And while a majority of individuals certified to use paratransit fit that bill, advocates worry about creating an unfair and possibly even illegal two-tiered system for the disabled — one serving people who can walk, the other those whose needs the private vehicles can’t accommodate.

“We don’t want racial segregation, and we also don’t want disability segregation,” said Marilyn Golden, senior policy analyst for the California-based Disability Rights Education & Defense Fund.

Uber and Lyft have both cited efforts to improve offerings for disabled riders. But the services have argued they are technology, not transportation, companies, meaning they are not required to provide accessible vehicles. Advocates for the disabled have filed a handful of lawsuits.

Again, if the service works as designed in Houston, then perhaps that can serve as a model elsewhere. The first indicator will be if Metro gets in on it. I’ll keep an eye on that.

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.

Uber settles California fingerprints lawsuit

Noted for the record.

Uber

Ride-hailing company Uber will pay at least $10 million to settle allegations by California prosecutors that it misled passengers about the quality of its driver background checks.

The settlement was signed Thursday in San Francisco, where Uber is based and where the district attorney led a lawsuit that said Uber falsely claimed its criminal screening of would-be drivers was the most comprehensive available.

San Francisco and Los Angeles prosecutors sued in 2014, saying Uber’s background checks were inferior to what taxi drivers undergo because they did not include fingerprint checks for past convictions. Instead, Uber’s process relies on a name search of other criminal databases and motor vehicle department files going back seven years.

Uber has defended the safety of its service amid a steady stream of allegations that its drivers have assaulted passengers, or, in the case of a driver in Michigan earlier this year, killed people. The app lets passengers share their location in real time, Uber points out, and the person who booked the ride is required to rate the driver after each trip, helping weed out unsavory characters.

Under the settlement, Uber agreed to pay $10 million within 60 days. If the company does not comply with the terms over the next two years, Uber would have to pay an additional $15 million, prosecutors said.

Uber did not admit wrongdoing, as is standard for such settlements, and said it already has made many changes prosecutors sought.

For example, Uber stopped claiming its background checks were “industry leading” when it settled a separate case brought by riders. Under that $28.5 million settlement reached in February, Uber also renamed its “safe ride fee” as a “booking fee.”

Prosecutors ratcheted up pressure on the company in August, expanding the lawsuit with claims that Uber failed to uncover the criminal records of 25 California drivers, including several registered sex offenders and a convicted murderer.

This has been a hobbyhorse of mine for awhile as you know. I’ll stipulate that fingerprint background checks aren’t the be-all and end-all. Fingerprinting has its flaws, and not everyone who would be flagged by such a check represents a real threat. Ideally, there ought to be a risk assessment aspect to this, to separate the truly dangerous people from those who just need to explain themselves. The point I have been making is that I don’t believe Uber’s process is sufficient, and there’s plenty of evidence to suggest they could do a better job of it. I believe that task needs to be done by someone else, as I just don’t believe that it’s something Uber truly takes seriously. At some level, why should they put more effort and resources into doing background checks than they have to? They can always fall back on the claim that the drivers aren’t actually their employees, so they’re not really responsible for what they do. Sure that may eventually catch up to them, but when you’re valued at $60 billion or so, you’ve got a pretty big cushion.

Honestly, if making fingerprint background checks mandatory is a bridge too far, then I like the compromise idea floated by Austin Mayor Steve Adler: Let the drivers undergo such a check voluntarily, and make whether or not they have done so a part of their driver profile. Let Uber and Lyft customer specify that they want a driver who has undergone this extra level of scrutiny. Anyone want to bet against the proposition that the free market will overwhelmingly prefer to be driven by this latter group? CNN, the Mercury News, the LA Times, and the NYT have more.

Lubbock to consider rideshare ordinance

You know what that means.

Uber

Uber drivers may soon be required to have background checks and operational permits in the city of Lubbock, a move that in the past has prompted the company to pull out of some Texas cities.

Uber is a technology company that provides a mobile phone app connecting riders with drivers. The company launched in Lubbock in late June 2014. With Uber’s app, riders can ask a driver to pick them up and take them where they need to go, with all transactions done over the phone.

Councilwoman Karen Gibson has been working with city staff to update the city code of ordinances to account for ride-sharing companies like Uber and Lyft, which she said have been operating illegally in the city since their inception.

It’s an issue officials at Lubbock Preston Smith International Airport say they also hope to tackle, as Uber drivers currently aren’t being asked to follow the same rules as licensed cab and limo services, said Kelly Campbell, administrative director at the airport.

After multiple discussions since stakeholders — including representatives from Uber, local taxi companies, police and city officials — first met in July 2014, Gibson said she intends to introduce an amending ordinance at the second City Council meeting in April that puts similar restrictions on transportation network companies as to those already placed on local taxi and limo companies.

“It’s more of a blanket ordinance that encompasses everybody. If they want to operate under that blanket, they will be able to operate here,” she said. “This is necessary for public safety. We live in a college town, we’ve got moms and dads in Dallas sending their daughter here and they expect us to make sure it’s safe.”

[…]

The city’s code states taxi and limo drivers must apply for an operator’s permit, furnish the city a sufficient performance bond, make sure the car is inspected, have a background check and minimum liability insurance of $50,000.

The amended ordinance will place transportation network companies like Uber and Lyft under the same guidelines as the other businesses.

“We’ve been following everything from coast to coast that’s been going on with these new market models,” Harris said. “We’re trying to find out a good way to address those types of industries within our code and allow them to operate, basically, legally.”

A spokesperson for Uber declined to comment to A-J Media until the company is able to review the ordinance.

But looking at cities that have passed similar regulations, Uber’s typical response has simply been to leave.

See here and here for more on the places Uber has recently abandoned. Of interest here is that the word “fingerprint” doesn’t appear anywhere in this story. That’s been a point of conflict in other cities, but it’s not the only one. In the first link from that previous sentence, I solicited a statement from Uber that said they had “made the difficult decision to cease operations in every city that has adopted new laws that require similarly​ duplicative r​egulations on drivers”, which was a reference to the Houston ordinance. They cited “Beaumont, San Marcos, College Station, and Abilene” as the cities they want others to emulate. That doesn’t sound like what Lubbock is doing, so we can expect Uber to respond as they have in cities like Corpus, which is to say they will close up shop. (Though now apparently COrpus is reconsidering.] We’ll see how it goes.

Supreme Court declines to intervene in Austin Uber referendum

Who knew they could do that?

Uber

The Texas Supreme Court on Monday declined to order the Austin City Council to rewrite the ballot language on the proposed ride-hailing ordinance that will go before voters May 7.

Austin music manager Samantha Phelps, working in conjunction with Uber, last week filed a petition for a writ of mandamus, asking the court to require new ballot wording because the council-approved language “is purposefully skewed to persuade the public to vote against the proposition.”

The city said the language was factual and not misleading, and that for a court to require new wording, Phelps would have to prove the City Council took an “arbitrary and unreasonable” action. Though the council approved the language in February, Phelps waited until just before Travis County was set to lock down the ballot language to file her petition, the city said.

The court issued an order denying the petition but did not release an opinion Monday.

“We made every effort to make sure the ballot language fairly represented the petition, so today the Supreme Court denied Uber’s attempt to overturn that language and affirms what we did,” Council Member Ann Kitchen said.

[…]

Austin elections attorney Buck Wood said there is no way to appeal the court’s order, as it is “purely a state law matter” and not a federal issue. Wood said he was not surprised by the decision.

“I suspect the lateness of it probably swayed some votes,” Wood said, noting that it took “three weeks” for the petition to be filed.

See here for the background. An Uber spokesperson is quoted in the story saying that the court’s order “was not a ruling on the merits of the ballot language”, which says to me that there may yet be further litigation if the referendum does no pass. Isn’t this fun? The Trib and the AusChron have more.

Austin will vote on rideshare ordinance revision

The month of May just got a lot more interesting.

Uber

Let the people choose how to regulate Uber and Lyft, a divided Austin City Council decided late Thursday.

The council, on a 2-8-1 vote, declined to adopt an ordinance underlying a petition drive that organizers said gathered more than 65,000 signatures. Under city rules about petition initiatives, that means that the city must hold an election on that ordinance May 7.

Council Members Sheri Gallo and Ellen Troxclair voted to adopt the ordinance, put forward through the petition drive earlier this year. Council Member Don Zimmerman, although he supports the ordinance and signed the petition, abstained. The election, the Austin city clerk estimated, will cost the city between $500,000 and $900,000, depending on whether some local school districts choose to hold elections at the same time.

The choice in May for voters will be between the petition ordinance, similar to Austin’s ride-hailing law that has been in place since October 2014, or, in effect, one passed by the City Council in December that in a year’s time would require virtually all drivers for Lyft and Uber to have passed fingerprint-based criminal background checks. The petition ordinance specifically says that drivers will not be subject to fingerprinting, instead undergoing the company background checks that are based on identifying documents like driver’s licenses and Social Security numbers.

The choice also, if the companies are to be believed, will be between having or not having Uber and Lyft operating in Austin. That would leave only GetMe, a small Austin-based company new to the peer-to-peer transportation business, to offer app-based rides here. That company has said it will abide by the city’s December law, which will go into effect Feb. 28.

A “yes” vote by the public May 7 would wipe out that ordinance.

“It’s going to be an expensive fight,” said Tom “Smitty” Smith, executive director of Public Citizen in Austin. “But sometimes you have to stand up to the bullies.”

[…]

The council, on a 4-7 vote, also rejected an alternative ordinance put forward by Mayor Steve Adler that would have been similar to petition ordinance, but would have required transportation network companies to pay the city 2 percent of its annual revenues to fund an incentive program for drivers to be fingerprinted.

See here and here for the background. Given all the noise that Uber and to a somewhat lesser extent Lyft are making in other cities that have tried to pass ordinances that regulate vehicles for hire, even ones that didn’t require fingerprints, this election is going to set a precedent. If Uber and Lyft get what they want in Austin, I feel confident they’ll try to do the same in other cities. If not, I don’t expect them to stop trying, but they’ll have to rethink their approach. Either way, the case for statewide regulation, in particular statewide regulation that requires fingerprint checks, takes another step forward.

Driverless car technology update

I have a personal stake in this story.

James Kuffner, the head of Google’s robotics division and one of the original team of ten who started its self-driving car work, has left the company for a job at Toyota’s $1 billion research institute in Silicon Valley.

His departure will come as a blow to the search and advertising giant, which has been plowing forward with a number of robotics projects including the self-driving car, which it hopes to offer for public use some time next year.

“It’s becoming clear that in the next phase of machine learning, access to lots of data to find and fix corner cases and to make a robust system is going to be very important, and I think Toyota is very well positioned to do that with its resources and its data,” Kuffner said in an interview at the CES expo in Las Vegas on Tuesday.

[…]

Toyota’s billion-dollar investment in the center was only announced in November, but the institute has already opened for business in two locations: one at the Stanford Research Park in Palo Alto and one in Kendall Square in Cambridge. They were chosen for their proximity to Stanford University and the Massachusetts Institute of Technology.

TRI’s mission is to take fundamental robotics research into products that can benefit all of society. One of the loftier visions is the development of cars that are incapable of crashing due to their complex AI systems, but the institute will also look at home-help robotics for the elderly and other projects.

[…]

To be sure, the goal of a completely self-driving car that handles any situation and cannot crash is some distance away, but Kuffner said a lot will be possible in the next few years.

“We’re actually closer than people think to having self-driving cars on the road,” he said. “It is an evolution. There is a continuous spectrum between full manual control and full autonomous control, and there’s going to be phased deployments.”

He cited some of the current technologies making their way into cars, such as lane assist and adaptive cruise control.

“These safety features are creeping into lots of cars you can buy today, and the pace is increasing, so I think people will be happily surprised in the next five years at how our vehicles have changed.”

James is my cousin, and I found this story on his Facebook page in January. Needless to say, we’re all quite proud of him. I talked with him about his work on driverless cars a couple of years ago when we were in Portland visiting family, actually did an interview with him that I hoped to publish here, but we never got clearance from Google on it. I remember him telling me that when they started out, their intent was to make the autonomous cars follow all of the rules of the road, but quickly learned that this was not only impractical but dangerous. For example, in highway merge situations, sometimes you have to exceed the speed limit to ensure safety. They aimed instead at making the car behave more like a median driver, by which I mean one whose behavior is in the middle of the range of how drivers behave. It’s a challenging question to model behavior like this, and my guess is that’s one reason why we are seeing this phased implementation of the technology.

Anyway. The driverless car business continues to attract a lot of money and a lot of discussion about what the future of driving will look like. And a member of my family is playing a leading part in that. I think that’s pretty cool.

Maybe the state should regulate Uber and Lyft after all

Texas Monthly reviews the current state of affairs with transportation network companies (TNCs) like Uber and Lyft and their fight against mandatory fingerprinting as part of the background checks that new drivers must ondergo, all of which is playing out in Austin right now.

Uber

The argument in favor of the [fingerptint] provision is simple: Lyft and Uber drivers are taking people into their cars, often times taking them to where they live. That’s presented very real safety problems in other cities, particularly for women. As of last November, seven cases involving Uber drivers and sexual assault were being investigated in Austin. (No arrests have been made, which isn’t uncommon in such cases.) Anything that the city can do to guarantee that the people accepting passengers into their cars are vetted and safe makes sense.

Lyft and Uber don’t seem to see it that way, though. An incident in Dallas in which an Uber driver was arrested for rape left the company insisting that its current background checks were sufficient, and that the problem was on the city’s end of the approval process. And if fingerprinting is part of the process in Austin going forward, both companies warn that they won’t be offering rides there anymore.

There are reasons to be suspicious of fingerprinting, of course. The Austin NAACP and the Austin Urban League co-authored a letter to Austin City Council explaining the potential unintended consequences: That fingerprint-based background checks can be discriminatory in that they can flag people who’ve been arrested but never prosecuted or convicted, which is a group that disproportionately includes minority drivers.

But it’s unlikely that Uber and Lyft have suddenly decided to take on fingerprinting as a civil rights issue. Rather, it’s probably the companies protecting a win-win situation for (almost) everyone. Uber and Lyft don’t pay for the car, insurance, or gas used in providing rides, so there only value for the driver is that it’s easy to get started and make money. Most of what they can offer to passengers, meanwhile, is that there are a lot of drivers on the road that they can access through the service. The current situation, in other words, is good for everybody—except those who’d like to see more stringent regulations on who shows up when you request a ride.

Lyft

The ordinance’s critics point to other aspects of the new regulatory process for drivers, too. A post on Medium from an Austin Lyft driver outlines the “Procedural hassles” involved: They include a six-step process of signing up, ensuring that your vehicle complies with inspection requirements, scheduling an additional inspection, adding a sticker to your windshield that affirms that you’re a verified driver, meeting a representative from the company that you’re working with, and getting fingerprinted—a process that the driver says could take up to a week. That certainly is more complicated than the current system, which can mostly be done from a phone, but it’d be hard to describe it as an onerous burden—most jobs require some amount of paperwork, after all, and there’s usually a delay between beginning the application process and starting work.

The threat that Uber and Lyft might leave Austin is significant, and whether their reasons for wanting the ordinance to change are “it doesn’t increase passenger safety, it just discriminates against certain kinds of drivers” or “We just don’t want to deal with any additional regulation,” it puts people such as the bar owners at Wednesday’s press conference in a tough spot: Those companies have changed their businesses in ways that have helped reduce one of the biggest problems their customers face—getting on unsafe roads—and losing that would be a real blow. Whether Uber and Lyft are right or wrong to threaten to leave, Austin needs them.

Still, it doesn’t seem that this situation is particularly unique. Fingerprinting is the major restriction that the companies seem to take issue with, but it’s hardly the first thing that’s led them to threaten to take their ball and go home. Lyft pulled out of Kansas City in April after the city required either the company’s drivers to pay a fee to be licensed, or the company to pay a $45,000 annual fee; both companies said they would  leave Hawaii over insurance regulations; both warned that they would pull out of Salt Lake City over proposed background checks and inspections in November 2014; both threatened to pull out of Minnesota in March over a proposed insurance requirement; fingerprints were again the bone of contention in Broward County, Florida in April; and a $62 background check that involved fingerprinting in Houston led Lyft to make good on its promise to leave (Uber still offers services). Both companies left San Antonio, briefly, until the city backed down on its requirements.

See here and here for the background. I favor the fingerprint requirements. It’s not in Uber and Lyft’s business model to be overly strict about who they contract with. Having cities perform these checks adds a layer of security that wouldn’t be there otherwise. The concerns about discrimination are legitimate, but they can be dealt with by doing a risk assessment on the candidates who are in the system, to filter out the people who really aren’t a threat to anyone. The current setup has allowed Uber and Lyft to play cities against each other and put pressure on individual Council members, in order to get the most lenient deal they can. In Austin, they are now going the referendum route to undo what Austin City Council has done. The varying rules for TNC regulation, plus the lack of permitting in unincorporated suburban areas, suggest that regulation at the state level could well come up again, and as the Quorum Report notes, that could ultimately work in favor of the fingerprinting advocates.

As the City of Austin prepares to tweak its ordinance governing ridesharing companies like Uber and Lyft, one key senator continues to work with the companies in hopes of passing statewide rules that would supersede local ordinances like Austin’s in the next legislative session.

Sen. Robert Nichols, R-Jacksonville, chairs the Senate Transportation Committee and was ready last session to shepherd through the upper chamber a bill to regulate the companies. But House Bill 2440 – which in its final version did not require drivers to be fingerprinted – never made it onto the Texas House calendar. The issue was a high-priority for some in the lobby, more than three dozen of whom were set to earn up to $1 million fighting for or against the bill.

“I want it to work, and I want to help them,” Nichols said in a phone interview with Quorum Report. “As long as we’ve got fingerprinting in there, I think we could sell it.”

Interesting, and not what I expected. I don’t know if a statewide TNC bill that included fingerprinting would have a better chance than the bill from last session that didn’t, but having Sen. Nichols on board with the idea is a big deal. We’ll keep an eye on it.

Petitioners may force vote to change Austin rideshare ordinance

Assuming there were no shenanigans, this is an impressive show of force.

Uber

A group looking to overturn an Austin ordinance requiring fingerprinting of ride-hailing drivers said Monday it has gathered more than 65,000 petition signatures, more than three times what it will need to force a possible election on a substitute ordinance.

Ridesharing Works for Austin, formed just three weeks ago by six nonprofits with support from Uber and Lyft, plans to submit 23,000 of those signatures — 15 percent more than the legal threshold of 20,000 registered voters — Tuesday to the Austin city clerk’s office. The clerk must verify if enough of them are registered and meet other petition requirements.

The other 42,000 or so signatures would be held in reserve in case more than 3,000 of the first batch are rejected by the clerk.

Once the clerk certifies that the minimum number of legal signatures have been turned in, the City Council would have 10 days to either adopt the revised ordinance or call for a public vote at the next regular election date, which is May 7. The council would have to call for an election by Feb. 19 to get on the May ballot. The next election date is in November.

Lyft

City law does not say how long the city clerk may take to validate the signatures. In 2012, when about 33,000 signatures were turned in for a proposed city ballot initiative, the city clerk used about 10 days to validate the signatures.

Council Member Ann Kitchen, who as chairwoman of the council’s Mobility Committee spearheaded the push for requiring drivers to be fingerprinted for background checks, said she would not support council adoption of the substitute ordinance.

“At that point, I would want to go for an election,” Kitchen said Monday. “I would want to hear what the people think.”

Kitchen said that the substitute ordinance from Ridesharing Works for Austin, aside from not requiring fingerprinting, would eliminate other elements of the ordinance passed by the council Dec. 17. Ride-hailing cars would no longer need to have “trade dress” (signifiers of what company the driver is working for), and a requirement that pickups and drop-offs occur at the curb rather than in a travel lane would also be eliminated. Requirements for what data the companies must report to the city also would be much scaled back, Kitchen said.

See here and here for the background. As we know, Uber and Lyft do not like fingerprint requirements. They successfully pulled off this ploy in San Antonio by leaving town until they got an ordinance they preferred. Now that stricter rules, they’re taking the same tack, though with different tactics. I strongly suspect that if this initiative makes it to the ballot, it will pass in comfort.

There is some possibility for compromise:

Mayor Steve Adler has been working with high-tech executives to craft what he sees as an innovative way to thread the needle between mandatory fingerprinting of drivers and implacable resistance to it by industry leaders Lyft and Uber. Adler calls it Thumbs-Up Austin.

Adler and his kitchen cabinet of techies envision a nonprofit or a for-profit company that would build a “third-party, cross-platform badge validator” based on any number of measures of safety. Pointedly, Adler sees one of them being fingerprinting, and a background check based on that.

Then a peer-to-peer vendor like Uber or Lyft — or lodging app Airbnb, for that matter — could prominently display on the app or vehicles an indicator that a driver or homeowner passed that safety test.

Of course, participation in this would be voluntary, so it’s unclear how much of an effect it would have. And that’s assuming it makes it past the conceptual phase and into an actual product, which these outfits would buy into using. It’s not a bad idea, but I wouldn’t hold my breath. The Trib has more.

Another Uber lawsuit update

Looks like we are headed towards a jury trial soon.

Uber

U.S. District Judge Vanessa Gilmore has denied Uber’s request for summary judgment and rejected parts of the company’s motion to dismiss.

“This court has found that the question of the literal falsity, or allegedly misleading nature, of Uber’s representations is a question of fact to be determined at trial,” the judge’s 53-page order filed on Dec. 18 said in explaining why she was rejecting the company’s efforts for summary judgment.

On the motion to dismiss, the judge said slogans such as “safest ride on the road” and “background checks you can trust” are general statements that can’t be measured and amount to “non-actionable puffery.” The same goes for a glowing 2014 online evaluation of Uber’s services from former New York City Mayor Rudy Giuliani, a company safety consultant, who clarified that he was offering his opinion.

Lyft

But, the court determined that some company representations amounted to “cognizable” claims under the federal Lanham Act, which covers false advertising and is named after the late Texas Congressman Fritz Lanham. Those included a 2014 blog entry by Uber’s head of communications for North America that Gilmore decided “was clearly intended to lead and could lead a reasonable consumer to believe that an Uber ride is objectively and measurable safer than a taxi ride.” The judge viewed company representations about the “Safe Rides Fee” as well as media statements about the superiority of Uber background checks over those required for taxi drivers in the same light.

Gilmore said the plaintiffs also can proceed on an unfair competition claim under Texas law.

See here for the background. I have no idea how this will go but I can’t wait to see how it gets resolved.

Austin versus San Antonio on ridesharing

The Current reviews the state of play.

Uber

In the spring of 2014, Lyft led the way in Austin, but the company launched without city approval and was eventually banned, along with Uber, which launched in the capital a short time later. Roughly a year ago, Austin’s city council eased its fight, allowing ride-hailing companies to operate. Last week, Austin policy makers approved requiring drivers to pass finger-print based background checks. Now Uber and Lyft are warning that they may cease operations in the city.

Sound familiar?

Lyft

Around this time last year, city council amended its vehicle-for-hire ordinance to include regulations for Lyft and Uber. Part of the new rules meant that drivers needed finger-print based background checks. So the companies threatened to leave the city, and followed through about three months later. That move came two months before a mayoral election, and bringing the companies back became a regular campaign talking point.

However, over the summer, San Antonio’s city council worked out a compromise with the companies: a 9-month pilot program with a driver option for finger-print based background checks that provide those who pass with a city-certified badge in the ride-hail applications. Lyft immediately agreed to return when city council narrowly approved the pilot program in August, and Uber returned in October.

See here for some background on San Antonio, and here for some on Austin. As the story notes, it’s unclear what will happen when San Antonio’s pilot program, in which fingerprint background checks were an option but not a requirement, comes to an end. I suppose that will depend in some way on how things play out in Austin, whether Uber and Lyft make good on their threat or if Austin’s City Council blinks. Remember, there’s another player in this, which is Get Me, and they have agreed to abide by the fingerprint requirement. They may wind up with the Austin market to themselves, and who knows what effect that could have. I will note that Houston has a fingerprint requirement, and Uber has chosen to stick it out here anyway. They claim to be thriving here, which seems to me to undermine their argument that having fingerprint background checks is a dealbreaker for them. Whatever else happens, all this strongly suggests to me that we will see another attempt to pass a law setting regulatory guidelines for transportation network companies in the 2017 Legislature. What we have now isn’t politically stable for the long term.