Austin Special Interests Forced Out Ridesharing Companies – Now They’re Paying the Price

More than a year ago, Uber and Lyft warned the city council of Austin that if they passed a package of burdensome fingerprinting requirements for ridesharing companies, Austinites might be left without options. The sponsor of the regulation, Ann Kitchen, issued a sharp rebuke.

“To threaten to leave, simply because we are trying to protect public safety, cannot be my deciding factor,” Kitchen shot back. “There are other transportation network companies, and they will be here.”

Now that SXSW 2017 has come and gone, the festival is retreating in the rear view mirror and the councilwoman is eating her words. When push came to shove, the vaunted alternatives to Uber and Lyft that she promised would pick up the slack simply couldn’t do the job. At the peak of the festival, Fasten and RideAustin – two apps that promised they could replace Uber and Lyft – either crashed or malfunctioned when it mattered most. The apps issued soaring prices, posted inaccurate information, and left countless riders without any options to get around. In some cases, SXSW speakers and staff were unable to meet their responsibilities for the event as a result.

“Fasten and RideAustin were granted practical access and spiritual absolution by the people of Austin because they boast about eschewing the very market forces that allow Uber and Lyft to work well, especially during a big event,” writes Mary Katherine Ham for the Federalist. “By only allowing access for ride-sharing services that act less like Uber and more like taxis, they got ride-sharing services that work less like Uber and more like taxis, whose failures are the very reason Uber and Lyft exist.”

A week later as SXSW wound down, the apps struggled. Patrice Lee Onwuka, Generation Opportunity’s communication director who flew in for a panel on the last day noted:

“I spent a good half hour at the airport trying to get RideAustin to work to no avail,” said Onwuka who was hopeful that in RideAustin had figured out its tech issues by the near end of the conference. “As an ardent supporter of disruptive companies in the sharing economy, I tried to make it work. Too bad the only disruption I experienced was to my schedule by a failed app that just wasn’t ready for primetime.” Onwuka eventually gave up and took a cab instead.

During the fight over the proposed regulations, spokesmen for Uber and Lyft argued that the onerous fingerprint requirements would create needless ‘friction,’ raise response time for riders, and also shrink their pool of rideshare drivers.  Opponents also warned the regulation would disproportionately impact people of color, due to the fact that it includes arrest records rather than just convictions. But the special interest groups pushing the regulations didn’t listen.

John Davidson reported on the timeline of the battle last May:

“Here’s what happened. Back in December [2015], Austin’s city council passed an ordinance requiring fingerprinting for drivers, “trade dress” for rideshare vehicles, restrictions on where drivers can pick up and drop off passengers, and an onerous data reporting scheme. Among the many justifications offered by the city council, the taxi lobby, and their cheerleaders in the local press was the need to “create a level playing field.”

“In response, Uber and Lyft collected more than 65,000 signatures—more than three times the required amount—in support of a more reasonable ordinance to regulate ridesharing. It was placed on the ballot as Proposition 1 and a special election was held May 7. A paltry 17 percent of voters weighed in—in a city of more than 885,000—and the pro-regulation crowd won the day by a vote of 48,673 to 38,539, thanks in part to the confusing ballot language.”

Sharing economy advocates knew this was coming, but special interests in Austin continued to ignore the warnings. Now that one of Austin’s largest cultural events has been so negatively impacted by the lack of viable ridesharing options, Austin voters should re-examine the burdensome regulations that created this situation. It’s time to welcome Uber and Lyft back to Austin.

If you think Austin should change reconsider its rules share this story on Facebook or Twitter with #SXSW.

Author Generation Opportunity

More posts by Generation Opportunity
  • suntzujr

    So what, you don’t post comments that take a different opinion than your article?

  • suntzujr

    Absolutely not.

    This article is almost shilling for Uber and Lyft; more likely Uber, with Lyft thrown in to make it sound like more than cynical dissembling by Uber to worm their way back
    in after trying to corruptly buy the election and threatening the city.

    And seriously, “sharing economy advocates?” Really? So you took an Uber ride a few times, yet those who voted against this heavy-handed bluff/temper tantrum are somehow anti-technology Luddites? In my opinion, this is a fundamental misunderstanding of what went on.

    They could have easily spent a fraction of the money they spent trying to buy the election and sow fear and uncertainty in the city on a few locations to rapidly process drivers, and then over time, probably as soon as the next election, voters would have supported them. But no, they picked up their toys and left, only now to realize, that in addition to being heavy-handed and corrupt, it was a stupid business decision.

    Ride Austin works great, I’ve used it many times; the service is near identical. The fact that it stumbled a bit with a huge event like SXSW has no bearing on that, and is absolutely no reason to invite Uber and Lyft back. In fact, Ride Austin has out-innovated Uber by passing almost all the money back to the actual drivers and to charity. This is a better and more pure form of the TNC model as it more efficiently connects and exchanges value between those providing the service and those using the service. This, versus supporting an extremely overvalued and corrupt company to create a monopoly that will enable them to continually squeeze drivers and riders, and harass cities and communities who stand up to them in any way.. Look at all the recent high-level execs leaving Uber, charges of harassment, etc.This is a terrible company that has no place in our city — and I am a huge “sharing economy advocate” and have spent my entire career in technology. Until this, I loved the Uber service, but after their behavior in Austin and learning more about the character of the
    company’s leadership, I will no longer use them.

    And please, so the lady you mentioned in your article had to wait 30 minutes during one of the largest events in the country and then took a cab — the horror. I’ve waited 30 minutes for both Uber and Lyft rides in multiple cities.

    Uber wanted to make an example of Austin, but with services like Ride Austin and huge lost revenue opportunities with events like SXSW, it wasn’t the example they had in mind.

  • Fred Bastiat

    “To threaten to leave, simply because we are trying to protect public safety, cannot be my deciding factor,” Kitchen shot back. “There are other transportation network companies, and they will be here.”

    Kitchen is one more in a long line of shrill protectionist for the stinky cab industry, she is supposedly protecting public safety while actually giving consumers fewer options to decide what is there own safest travel options – once more a political ruler infantilizing those she claims to protect.

  • Bob Lee

    I don’t care about the ride share concept. I just want to get somewhere. If Taxi companies had apps where I could order a cab without having to call someone with limited English language skills, explain where I am and want to go and then wonder “did they get it?”, I’d use it. This is the ONLY reason I use Uber….