Off the Kuff Rotating Header Image

Ridesharing Works for Austin

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.

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.

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.

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.

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.

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.