AUSTIN, Texas -- Austin voters turned down Proposition 1 Saturday. The decision will most likely temporarily shut down ridesharing services such as Uber and Lyft, and could have an impact nationwide for companies like it.
The election followed a series of disagreements between Uber, Lyft, and the Austin City Council.
MORE | Reaction: Austin Voters Keep Fingerprinting for Lyft, Uber Drivers; Companies Threaten to Leave
In 2014, the previous City Council assembled a TNC Working Group to delve into the many facets of regulations that could pertain to ride-hailing apps. The group continued to work on recommendations after an interim ordinance was passed in October 2014.
The TNC Working Group included stakeholders from all forms of livery service in Austin, as well as members of several other parts of the community.
Recommendations from the group were presented by Austin Transportation Department staff to Austin’s first ever Mobility Committee meeting, chaired by District 5 Council Member Ann Kitchen, on March 25, 2015. The recommendations were drastically different from the proposal Kitchen brought forward at the following committee meeting. Most notably, the recommendations from staff originally recommended the name-based background checks that Uber and Lyft already use remain and be applied to all other forms of public passenger transport.
Instead, the Mobility Committee spent several months discussing the merits of fingerprint-based background checks and benchmarks for companies to meet.
The full Austin City Council adopted the Mobility Committee recommendations in mid-December with four different benchmarks for compliance. However, the ordinance was notably left with a few sections to be revisited at a later time.
On December 29, the Uber- and Lyft-funded Ridesharing Works for Austin PAC formed. The political action committee hired Block by Block to canvass neighborhoods across Austin to gather signatures for a petition to repeal the city’s December ordinance.
Within three weeks, the group said it collected 65,103 signatures from registered Austin voters. The campaign submitted its petition January 19, demanding City Council to adopt the petition’s accompanying ordinance as-is or set it for a public vote.
The City Council chose not to adopt the ordinance, which would have repealed several key parts of the rules the same council approved in December.
In the weeks leading up to the May 7 election, Uber and Lyft poured close to $10 million into its PAC to advocate for Proposition 1. No individual donations were accepted by the PAC.
Opponents to Proposition 1 mounted their own effort through two PACs, most notably Our City Our Safety Our Choice PAC. It is led by former Austin City Council Member Laura Morrison, who was the only ‘no’ vote on the October 2014 ordinance. The group raised more than $100,000 to counter Uber and Lyft’s efforts, mostly from notable figures in Austin politics.
-- Reaction to Failure of Prop 1 --
Austin Mayor Steve Adler had this to say after the special election:
"The people have spoken tonight loud and clear. 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."
Statement from former Austin Mayor Lee Leffingwell shared by Ridesharing Works:
"Unfortunately thousands of people who drive with ridesharing companies to earn much needed income will now have to find another way to make ends meet. Thousands more of our citizens and visitors from around the world will soon have one less option to get around town safely.
"The ballot language written by the City Council was intentionally confusing and a disservice to voters.""We're disappointed in tonight's results. The benefits of ridesharing are clear: reduced drunk driving and economic opportunity. And we won't stop fighting to bring it back."
Statement from Chelsea Wilson of Lyft:
"Lyft and Austin are a perfect match and we want to stay in the city. Unfortunately, the rules passed by City Council don't allow true ridesharing to operate. Instead, they make it harder for part-time drivers, the heart of Lyft’s peer-to-peer model, to get on the road and harder for passengers to get a ride. 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.
"We want to thank the incredible Lyft community for all they’ve done to keep ridesharing in their city. Thanks to each and every one of them, we took drunk drivers off the road, made it easier for residents and visitors to get around, and provided a flexible way to make ends meet. But we’re not giving up. We will continue fighting for people in Austin to have modern options like Lyft. For the tens of thousands of you who spoke up in support of ridesharing, we urge you to keep making your voices heard on this important issue."
Chris Nakutis, general manager of Uber Austin, released this statement:
"Disappointment does not begin to describe how we feel about shutting down operations in Austin.
"For the past two years, drivers and riders made ridesharing work in this great city. We're incredibly grateful.
"From rallies to phone banking to knocking on doors, they spread the word and their support was humbling and inspiring.
"We hope the City Council will reconsider their ordinance so we can work together to make the streets of Austin a safer place for everyone."
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