Ride-hailing giants Uber and Lyft, which left Texas' tech-savvy capital city a year ago over local fingerprint requirements for drivers, have returned after state lawmakers intervened.
Both companies began rolling on Austin's streets again Monday, when Gov. Greg Abbott signed into law a bill that puts the state — not local governments — in charge of regulating the ride-hailing industry.
Local leaders in Austin, the conservative state's most liberal city, argued unsuccessfully that its tech-driven economy was uniquely positioned to launch capable alternatives that could fill the gap.
“Austin is an incubator for technology and entrepreneurship, and we are excited to be back in the mix,” Uber spokesman Travis Considine said Thursday. “ We know that we have a lot of work to do in the city, but we couldn't be more excited for the road ahead.”
Uber and Lyft — which are both based in San Francisco — fled Austin after losing a bruising and expensive fight to replace an Austin ordinance that required fingerprint-based background checks of drivers, a variety of data reporting and other requirements.
Advocates for fingerprinting say it's the best way to weed out drivers with criminal records. Uber and Lyft have argued their background checks suffice and that fingerprint databases can be out of date. Fingerprinting can also slow down the process of adding new drivers.
Austin became the chosen battleground as similar debates cropped up in other large cities around the country, and the companies spent about $9 million on the campaign before they were rejected by the city's voters. The companies followed through on threats to leave rather than submit to the local rules, and quickly turned their efforts to lobbying for statewide regulations.
Texas' Republican-controlled Legislature saw the vote as liberal Austin stepping on free enterprise, and within hours of the Austin vote, lawmakers announced plans to pass a statewide regulations bill even though the legislative session was still months away.
The bill they passed requires companies to be licensed by the state and pay an annual operations fee. It also requires them to perform local, state and national criminal background checks, but doesn't require fingerprints.
After Uber and Lyft left Austin, several local companies moved to fill the gap and followed the city's rules. One of them, Fare, urged customers not to abandon them once Uber and Lyft return.
“It wasn't long ago you voted for something you believe in,” Fare said in an email to its customers Friday. “Show your representatives (who should be working for you, not corporate lobbyists), that you were serious when you asked for stricter screening and background checks on drivers. Next time you need a ride, call on any one of the local ridesharing companies that chose to work for YOU these last 12 months.”
Abbott signed the bill Monday, saying on Twitter that he was overturning “Austin’s regulation that trampled freedom & free enterprise.” Texas joins more than 40 states that have enacted statewide ride-hailing regulations, including Florida last month.
Supporters of the statewide measure say it will eliminate any confusion caused by a patchwork of regulations around the state. Austin Mayor Steve Adler says it stifles local control.
“I'm disappointed that the Legislature chose to nullify the bedrock principles of self-governance and limited government by imposing regulations on our city over the objection of Austin voters,” Adler said.
