After voters in Austin, Texas, rejected a proposal for loosened regulations on ride-hailing apps, both Uber and Lyft have announced they will be “pausing” operations in the city.
In late 2015, Austin’s city council approved an ordinance requiring companies like Uber and Lyft to be regulated like taxis. That meant, among other things, drivers would have to be fingerprinted as part of a background check.
Uber and Lyft, in response, pushed a ballot proposal asking voters to choose between that city ordinance and a looser statewide law.
NPR’s John Burnett reports that the two companies dropped $8 million to promote their stance on Proposal 1 — a record for Austin ballot proposals.
“Despite spending what amounted to $200 on each vote in their favor, Uber and Lyft lost by 44 to 56,” John says.
Before the vote on Saturday, Uber and Lyft had threatened to pull out of Austin, a market John describes as “lucrative.”
Since the decision, both companies have said they intend to follow through on their threats, Austin-based member station KUT reports.
Lyft told KUT they “want to stay in the city,” but Austin’s rules “don’t allow true ridesharing to operate.”
“Because of this, we have to take a stand for a long-term path forward that lets ridesharing continue to grow across the country, and will pause operations in Austin on Monday, May 9th,” Lyft said.
“Disappointment does not begin to describe how we feel about shutting down operations in Austin,” said Uber’s Austin general manager Chris Nakutis, KUT reports.
Austin Councilmember Ann Kitchen, who spearheaded the effort to increase regulation of ride-hailing companies, told KUT “nobody” wants Uber and Lyft to withdraw from Austin.
“We’re not asking them to leave,” she said. “The voters have spoken and they want these requirements.”
Last year, Uber and Lyft withdrew from San Antonio, Texas, over a similar requirement that drivers be fingerprinted. They returned months later under a program that made fingerprinting voluntary.
Meanwhile, Houston also has rules requiring drivers for ride-hailing apps to be fingerprinted. Uber has previously threatened to withdraw from Houston over that ordinance. According to Culturemap Houston, the city’s mayor responded, “if it comes down to public safety on one hand and Uber staying on the other, I don’t think it is even close.”
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