An Uber Problem

On May 7, 2016, residents of Austin voted 56% to 44% against Proposition 1, a decision which no longer required rideshare companies to follow the local government’s requirements for background checks. People who voted “no” for Proposition 1 voted to keep fingerprint background checks, to keep vehicle labeling, and to not allow pick-ups and drop-offs in travel lanes.

This resulted in Uber and Lyft pulling their services out of Austin, as their background checks did not comply with Austin’s fingerprinting regulations. While there was much backlash from the Republican-dominated state legislature and the Uber and Lyft companies, this allowed for many local companies, such as Fasten and the nonprofit organization RideAustin, to step in and become established as the foremost rideshare apps of Austin.

This angered many Austin residents because in their opinion, it was a blatant disregard to what they were fighting for. Many Austin residents also believed that this movie was in a way symbolic of how little the state government cared for the good of their constituents. However, many supporters of Governor Greg Abbott’s power move argued that local governments interfering with businesses was not within their realm of power.

The purpose of this article is to see whether the return of Uber and Lyft is helping or hurting Austin. The conflict in this issue rises between the local companies and the larger, already established rideshare companies. Furthermore, it can also be construed as a conflict between government and its constituents (Bansal, Kockelman, & Singh, 2016).

Was the state government wrong in not listening to the testimonials of its citizens when it decided to override the regulations put forth by the local city governments? Or do they have a mandate to regulate all business and commerce-related matters due to the economic capital they bring to the state’s economy?

After the dramatic and much-publicized exit of Uber and Lyft, many Austinites were left without many rideshare options around. Once the dust settled, three companies emerged: Fare, Fasten and RideAustin.

I also had the opportunity to talk to Robert*, who has been driving for RideAustin for a year and a half now about how the return of Uber and Lyft personally affected him.

One of the foremost reasons why Uber and Lyft were also voted out was because of their lack of security regulations when it came to background checks for their employees. People who lived in Austin specifically voted for Prop. 1 due to their concerns of safety when it came to rideshare drivers all over the city (Feeney, 2015).

I asked Sophie*, a sophomore public relations student here at UT Austin, how she felt when it came to the safety of SURE Ride:

Safety is a large issue for residents of Austin, students included, and Lyft’s willingness to offer solutions to this lack of safety is demonstrative of the new directions that rideshare is going in.

Similar to Lyft’s new partnership with SURE Walk, other rideshare companies seem to be trying new business models in order to entice their customers. RideAustin is now accepting Bevo Bucks, a cashless form of payment accessible through a UT student’s ID card. This is sure to draw in more students, as many of them already have Bevo Bucks preloaded onto their card.

So far, companies seem to be adapting to the ever-changing market of ridesharing, as can be seen by their new business models and partnerships in order to expand their user base. Perhaps in the future, we will witness the triumph of one rideshare company over the others. But for now, there doesn’t seem to be leniency from anyone.

Peer-Reviewed:

Bansal, P., Kockelman, K. M., & Singh, A. (2016). Assessing public opinions of and interest in new vehicle technologies: An Austin perspective. Transportation Research Part C: Emerging Technologies, 67, 1–14. doi:10.1016/j.trc.2016.01.019

Cramer, J., & Krueger, A. (2016). Disruptive Change in the Taxi Business: The Case of Uber. American Economic Review, 106(5), 177–182. doi:10.3386/w22083

Davidson, N. M., & Infranca, J. (2018). The Place of the Sharing Economy.

Di, X., Fabusuyi, T., Simek, C., Chen, X., & Hampshire, R. C. (2017). Switching Behavior in Response to Re-Entry of Uber and Lyft: A Revealed Study in Austin, TX.

Feeney, M., & companies Uber, R. (2015). Is Ridesharing Safe?.

Other Sources:

*names have been changed for the purpose of privacy

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