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Uber, Lyft Leave Austin After Vote For Stricter Regulations

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Guy Bentley Research Associate, Reason Foundation
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Ride-sharing companies Uber and Lyft are leaving Austin, Texas, after the city voted to impose new regulations on drivers including fingerprint background checks.

The companies sunk $8 million into a campaign to convince voters to reject the city’s new rules, which are set to go into effect by Feb. 1, 2017. Both Uber and Lyft made it know they would withdraw from the city if voters opted to back the new regulations.

Austin residents took little notice of such warning, voting 56-44 May 7 to support the fingerprint checks, according to Travis County elections results.

“The people have spoken tonight loud and clear,” Austin Mayor Steve Adler said in a statement. “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.”

Councilwoman Ann Kitchen, who led the charge for extra regulations, welcomed the vote. “Nobody wants them to leave and we’re not asking them to leave,” Kitchen told KUTX radio.

“We held the election they said they wanted. It’s time to listen to the voters and for them to sit down with us.” The debate over safety regulations for ride-sharing companies has been battled out over two years and resulted in both Uber and Lyft honoring their promise to leave the city.

The city initially agreed to allow the companies to perform their own background checks. But in December, the City Council passed an ordinance requiring more stringent fingerprint screenings. The companies threatened to leave Austin, as they have in other cities that have passed restrictive ordinances.

“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 ride sharing to operate,” Lyft said in a statement.

“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 ride sharing continue to grow across the country, and will pause operations in Austin on Monday, May 9th.” Uber confirmed it would cease operations in Austin 8:00 a.m. Monday.

Not only will the withdrawal of Uber and Lyft inconvenience consumers but Austin’s regulations may be entirely unnecessary, according to policy experts.

“Forcing Uber and Lyft to require their drivers to go through fingerprint-based background checks is a perfect example of regulating in search of a problem. First, ridesharing’s safety record shows that these companies’ current background check processes adequately cover any public safety concerns,” Jared Meyer, fellow at the Manhattan Institute, told The Daily Caller News Foundation.

“Second, someone who commits a crime while riding or driving with Uber or Lyft must want to get caught. Both parties’ locations are tracked for the duration of the trip, anonymity is removed, and no cash changes hands. Contrast this to the taxi model, where riders can hide their identities and drivers carry a lot of cash. With the immense popularity of ridesharing, I assume that it will only be a matter of weeks before public backlash allows Uber and Lyft to resume service in Austin without the fingerprinting requirement.”

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