Ridesharing Is Awesome, So Who Do We Blame When Uber Leaves?
For sprawled-out, traffic-snarled cities across the country, Uber has been a godsend for riders who can afford the easy, cheap-ish trips. But has the company built up enough goodwill to get whatever it wants?
No, not in techie-town Austin, at least, where an overwhelming number of voters this past weekend defeated a ballot measure that would have eased regulations for rideshare platforms like Uber – regulations that, like in Houston, Uber insists have stunted the company's growth, leading to fewer drivers and higher rates for customers. On Monday, Uber followed through on its threat to Austin voters, pulling out after the city refused to give it regulatory carte blanche. The resounding defeat came after an unprecedented $8.6 million campaign to overturn the city's regulations by Uber and competitor Lyft, which also ditched Austin on Monday.
All of which spells trouble for anyone who regularly Ubers in Houston, where the company has threatened to cease operations if city leaders won't ax the kind of regulations that voters in Austin just upheld. Vowing to keep Houston's rules (the most contentious one being fingerprint-based background checks for drivers instead of relying on Uber's third-party commercial background checks), Houston Mayor Sylvester Turner lauded Austin voters for bucking the company's wishes: "I applaud the voters in Austin who stood by their mayor and city council in support of fingerprint background checks for Uber drivers. The City of Houston will not compromise on public safety either. Were an election to be held here, I believe voters would choose the same outcome as Austin."
But if — or, given the immediate resistance from Turner and many council members, maybe more like when — Uber abandons Texas's largest city, where should loyal customers direct their anger: at the company or at city leaders who fail to bow to Uber's wishes?
The rancor over ridesharing in Houston began not long after the city passed rules requiring that such drivers be licensed by the city subject to a drug test, physical and fingerprint-based background check — like every limo or taxi driver in the city. While Lyft called the new regs too “expensive” and left before they even went into effect in late 2014, Uber stuck it out under the new system, working with the city's Administration and Regulatory Affairs department to steer part-time drivers through the licensing process as quickly and easily as possible.
It didn't take long for Uber to buck against the rules, calling the city's licensing process “duplicative,” “expensive” and too time-consuming for part-time drivers looking to make some extra cash on the side. About a year after Houston's rideshare rules went into effect, the company claimed “these rules destroy jobs for more than 2,000 Houstonians every year.” Last month, in a letter sent to Turner and city council members threatening to leave the city if officials don't rescind the rules, the company even raised that number, saying now that some 20,000 people have completed Uber's own screening process but, for whatever reason, haven't acquired a city license. The company even implied Houston could see more drunk drivers if Uber suddenly disappeared; District E Councilman David Martin has called Uber's stance "blackmail."
As we've written before, it's difficult – if not impossible – to determine where the facts lie in this debate, mostly thanks to Uber's lawsuit barring the city from releasing virtually any information that could tell us how good or bad the local rideshare rules have been for the company. Last month, deputy assistant director of the city's Administration and Regulatory Affairs department Lara Cottingham told us the numbers show Uber has seen resounding success in Houston, with both revenue and the number of licensed drivers increasing each month. Uber claims demand has far outpaced the rate at which it can license new drivers and that, on average, it takes Uber drivers some four months to clear all the city's hurdles; the city says that's bull, and that nearly half of all licensed Uber drivers in Houston got their licenses within a week of applying.
The sticking point in Austin and Houston remains a fingerprint-based background check for drivers, which Uber says is unnecessary. City officials not only disagree but say hundreds of drivers who've cleared Uber's third-party check (which doesn't use fingerprints) couldn't pass a city background check because of past offenses ranging from robbery to indecent exposure, DWI, assault and murder. Uber says those drivers are probably just pretending to be Uber drivers and simply fabricating the little “U” windshield sticker (seriously) and that the city has no way of knowing whether those drivers cleared Uber's checks in the first place (the city, again, says that's bull).
While Uber's opposition might sound petty to some (pull out of a whole city because you don't like how long it's taking your drivers to get licensed?...really?), you have to consider the company's grand ambitions to understand why local licensing rules are such a big deal to Uber. In addition to calling the regs a solution in search of a problem, company spokeswoman Debbee Hancock told us last month that restrictive rideshare rules could stall other Uber projects that could even further expand transportation options in traffic-choked cities. Hancock mentioned UberPool – which, ironically, the company just started piloting in the other major city that requires fingerprint-based background checks for drivers.
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Houston officials are pretty adamant the current system is working. And even if Uber follows through on its threat and ditches the nation's fourth-largest city, hand-wringing over rideshare regulations is likely to continue into next year as the Texas Legislature convenes – conservative politicians have already vowed to file bills for statewide regulations that Uber prefers because of the “tyranny” of local citizens (or mayors and city councils, for that matter) deciding their own local rules.
Even if other nascent rideshare apps step up to the plate, it's undeniable Uber's absence will be felt, at least for quite some time, if (and, if Austin is any indicator, more like when) the company leaves Houston, a city with crushing traffic and spotty public transit options, where walking and biking as transportation can be fatal.
The question remains: Who deserves blame when that happens?
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