Uber Returning to Austin!

The Texas state legislature passed ridesharing legislation (which the governor says he’ll sign) which preempts local regulation.

The new rules require:

  • State permit
  • Insurance
  • Disclosure of fares (including an option to receive a fare estimate in advance)
  • Disclosure of driver and vehicle details prior to starting the ride
  • Provision of electronic receipts
  • Background checks
  • Non-discrimination

They do not require finger print background checks, and since they trump local regulations they won’t allow for cities to carve out certain lucrative locations for taxis only. The new rules go into effect June 1.

Uber and Lyft left Austin last year after the city passed new rules that the ridesharing companies said they couldn’t live under and a referendum failed to repeal the rules. In fact, what they didn’t want was different rules in different jurisdictions and they wanted to send a message to other cities not to try the same thing. Austin thought it was an important enough market that Uber and Lyft wouldn’t leave.

Uber and Lyft misplayed their hand with the referendum, appearing as outside bullies rather than underdogs and failing to communicate the seriousness of their intention to pull out if the referendum failed. They should have pulled out a couple of weeks before the vote, promising to return if the referendum passed, and then the question to voters would have been in effect, do you want to bring back Uber and Lyft?

Ultimately they win at the state level however.

When Uber and Lyft initially pulled out, there was chaos. 10,000 people were driving for Uber and Lyft, and just about 700 cabs. I had to fly out the next day and had to figure out how to get to the airport. There’s a direct bus. And Cars2Go can be dropped off at parking near the airport. I took a cab, which involved a half hour wait.

Several smaller companies entered the breach. The most functional in my experience is Boston-based Fasten. There’s also GetMe (which I never managed to make work), Ride Austin (non-profit), Fare, and others. The city worked to connect drivers to these other services.

While these provided service in much the same way as Uber and Lyft, the technology isn’t as strong and they largely melted down during South By in March.

And with Uber losing a billion dollars a quarter they’ll be able to lose some of that on Austin residents soon. And I’ll be able to use my Platinum Amex $15 monthly credit near home.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Uber, Lyft, et. al. are great services that have almost replaced the crooked taxi industry. However, it’s not unreasonable to demand REAL background checks, fingerprinting, and other safety concerns. I’m disappointed that those subjects are even up for debate. The city of Austin’s requirements were more than reasonable.

  2. @JDH. What’s unreasonable is a City/County that requires fingerprinting for Uber but supports no ID to vote!

  3. This is part of a larger Texas Republican agenda that usurps local control when they don’t like what it controls. Local plastic bag laws and local fracking regulations are a big target. They’re all about local control until they aren’t.

  4. @BB

    What the hell kind of equivalency is that? I have a constitutional right to vote. You don’t get to take that away from me.

    But people who are convicted predators have been found to drive for Uber and Lyft. Basic background checks are a joke… you simply tell them which counties you lived/worked in and they check their records. Leave off the counties you have convictions in, and you’re good!
    It’s a clear safety issue.. one that we require for adults to work with children, for instance. And yeah, taking people who are often drunk and vulnerable into a car is an obvious security risk.

  5. I think all transportation service providers should be held to the same standards. Shared ride services in Austin (such as shuttles) require the drivers to go through stringent background checks (including fingerprinting) and to pass an ordinance test. Why is this different for UBER ?

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