Uber and Lyft Shut Down Operations in Austin

In response to the defeat of Austin Proposition 1 on Saturday, Uber and Lyft have shut down operations in Austin.

Both companies cite the Austin City Council actions in their decision. Lyft says that it "cannot operate in Austin" while Uber states "we simply cannot operate under the City's new rules."

However, neither company is actually banned from the city. While the City Council did vote in more regulations for the companies, both are currently operating in other cities with the same regulations. So, we can be hopeful that they'll return to Austin soon.

Background

In December, the Austin City Council voted 9-2 to instate fingerprint-based background checks for drivers — similar to the regulations Uber and Lyft currently operate with in NYC and Houston.

Both companies threatened to leave if the City Council passed the bill. However, once the bill passed, the companies didn't leave; instead they started a petition to send the rules to a vote. Their political action committee, Ridesharing Works for Austin, was able to collect 26,320 signatures, enough for force a vote on the issue.

The Vote

With the proposal going to the polls, the company-funded PAC poured an incredible amount of money in to the vote. As of the most-recent spending reports, the PAC spent $8.1 million — six times more than any other campaign in Austin city history — on mailers, tv ads, phone drives, possibly illegal robotexts and numerous lawn signs.

However, it seems to have all been for naught. This past Saturday (May 7), Austin voters voted against the bill to eliminate fingerprint-based background checks by a margin of 55.8 to 44.2.

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Alternatives

If you're visiting Austin anytime soon, here are some options to keep in mind:

• Austin's "Airport Flyer" route #100 runs from the airport to downtown and up to the University of Texas campus for just $1.75 each way. I rode the bus yesterday and was one of only two people on the bus. That's likely to change soon.
• Rideshare company Get Me is still operating in Austin.
• If you must, Austin city taxis are still available. However, before Uber and Lyft became staples in Austin, taxis were infamous for breaking city code.

Bottom Line

Uber and Lyft have voluntarily exited the Austin market, but neither are prevented from returning any day. Their exit means approximately 10,000 drivers are out of work, and many Austinites have less options to find a ride — facts that the companies will likely use when trying to negotiate further with the Austin City Council. This strategy has worked out well for them in past negotiations.