Ride-hailing apps are threatening to pull out of Austin if its residents don’t vote for their sponsored ballot measure.
On May 7, residents of Austin will vote on Proposition 1, a ballot measure sponsored by ride-hailing app companies Uber and Lyft. The companies have spent millions pushing for the initiative, which would swap out an existing city regulation on ride-hailing for an ordinance supported by the companies being regulated. More than money is at stake: If Austin doesn’t pass Prop 1, according to Uber and Lyft, they will pull out of the city.
Austin residents have seen their mailboxes stuffed with flyers and their scuzzy campus bars plied with canvassers. Reddit users say that Uber is texting its users to vote for Prop 1 “to keep Uber in Austin.” Proposition 1 is all that Austin can talk about these days. Uber and Lyft even have Tim Riggins playing for them!
The policy in question—whether fingerprinting should be required of drivers who use ride-hailing apps—is a legitimate subject for debate. Reasonable minds can disagree over whether the potential added safety is worth the extra hurdle for drivers. (Although it’s hard to see why fingerprinting is a necessary feature, when ride-hailing apps already track their drivers.) Still, residents can disagree over the merits of the law and find common ground against Proposition 1.
Proposition 1 is an absurdly heated example of a confrontation happening in cities everywhere. With Proposition 1, Uber and Lyft have tried to turn a regulatory debate into an argument over ride-hailing itself, knowing that these services are both popular and necessary in Austin. If voters accept that frame, they are being played as unsophisticated. Proposition 1 is Uber and Lyft’s effort to fight back against regulation by undermining local government.
Last December, the Austin City Council passed an ordinance requiring ride-hailing drivers (or “TNCs,” for “transportation network company services”) to submit to fingerprint-based criminal background checks. The ordinance took effect in February; the city implemented a gradual rollout, requiring 25 percent compliance by May 1, with escalating benchmarks on the way to full compliance by February 1, 2017. In the few months since the bill passed, Uber and Lyft have gone into high gear. Their political action committee, Ridesharing Works for Austin, has spent some $8 million to repeal the fingerprinting ordinance—efforts that will culminate with the vote on Proposition 1 on Saturday.
If the vote goes south, Uber and Lyft say, both will be forced to leave Austin, more in sadness than in anger. That is a hollow bluff. While the Austin market may be small relative to others where Uber and Lyft operate, its importance in the spheres of tech and disposable income are outsized. They might leave for a while, as they have done in other cities. But as long as SXSW is in Austin, so are both Uber and Lyft.
If it’s doubtful that either one of these companies could afford to leave Austin for good, then it’s plain ludicrous to think both would. There’s a prisoner’s dilemma at work: Both have to commit for it to count. If Uber shut off its app services and pulled out of Austin, Lyft would be foolish not to seize on the opportunity (and vice versa). Sure enough, after both Uber and Lyft left San Antonio last year over fingerprinting, Uber returned almost immediately and Lyft followed suit within weeks.
Beyond the empty threats, the ride-hailing companies’ squabbles with other Texas cities over fingerprinting can’t compete with what’s happening in Austin. It’s worth noting again that Uber and Lyft have pumped $8 million into this battle—much more than top candidates ever spend on even the toughest mayoral bids. (“More than six times the previous record for city elections,” the Austin American-Statesman reports.) That’s an awful lot of breakfast tacos.
The audience for the $8 million being spent on Prop 1 is much larger than the city. Austin is the state capital, and in an era that has seen conservative states preempt regulatory powers that have traditionally belonged to cities, the fight for Austin is a fight for all of Texas. Conservative state lawmakers have already signaled an interest in big-footing local government on ride-hailing regulations. “Win or lose, we do expect [Uber and Lyft] to take this to the state legislature and look for a statewide bill that would usurp local control,” a Travis County Democratic Party spokesman told Time Warner Cable News in Austin.
So if Uber and Lyft don’t get their way from Austin voters, then the companies may very well go over their heads. That would be sheer corporate bullying. If Uber and Lyft lobby state lawmakers to preempt Austin on ride-hailing powers, then they will be working against the best interests of their customers. Which is their prerogative, of course. But it’s not a strategy that Austin residents should necessarily accept. Drivers and passengers alike should ask one question: If Uber and Lyft lose, will they take their apps and go, or will they try to take away Austin’s power to say no to them?
Even if Uber and Lyft took an iron oath to leave Austin if Proposition 1 fails to pass, Austin ride-hailing fans would still have a good reason to vote against it. Proposition 1 is nonsensical, even by the low standards for ballot measures:
Shall the City Code be amended to repeal City Ordinance No. 20151217-075 relating to Transportation Network Companies; and replace with an ordinance that would repeal and prohibit required fingerprinting, repeal the requirement to identify the vehicle with a distinctive emblem, repeal the prohibition against loading and unloading passengers in a travel lane, and require other regulations for Transportation Network Companies?
In the words of the late Antonin Scalia, Proposition 1 is pure applesauce.
Planning by the ballot box is no way to run a city. Ballot measures have made a mess of San Francisco. Residents of Boulder, Colorado, almost succeeded in making city-planning powers the sole province of self-interested neighborhoods, which would have replaced one planning authority with 66 of them. Opponents of a Houston ballot measure protecting LGBT residents from discrimination successfully defeated it by framing it as the fear-mongering “No Men in Women’s Bathrooms” act.
Austin voters should decide on the right kind of regulations for ride-hailing services in their city. (They already have! The city passed an ordinance, through the normal democratic process.) Uber and Lyft don’t like the outcome, so the companies are deploying vast resources and a great deal of misinformation to convince Austin voters that this is a debate about having ride-hailing apps. In fact, it's a much larger fight brewing about who has power in cities—voters and their representatives, or corporations and their state allies. With Proposition 1, these companies are trying to take Austin voters for a ride.
This post has been updated.