City Council to consider regulations for ride-hailing companies

Lauren Florence

Ride-hailing services such as Uber and Lyft may soon have to comply with stricter background check regulations and pay an annual operating fee after mobility committee recommendations.

At an Austin Mobility Committee meeting Oct. 7, council members proposed the regulations for transportation network companies which include all vehicle-for-hire apps such as Uber and Lyft.

The Austin City Council is expected to approve an amendment to city code regarding fees for transportation network companies at Thursday’s meeting. The mobility committee should then consider the amendment no later than Nov. 16.

Stricter background checks would impose barriers for drivers, according to a Lyft press release, and Austin would be an outlier compared to 40 other cities where stricter regulations have been imposed without requiring fingerprinting. The tougher background check would have no benefit to public safety, according to the press release.

“Lyft does not currently operate in any city that requires fingerprinting and has been forced to pause operations in cities that implement the measure,” the press release read. “Lyft’s safety screening processes are thorough and rigorous, but also streamlined to ensure that everyone, including part-time drivers, can participate.”

Uber sent an email to Austin Uber riders Oct. 6 which asked them to sign a petition against the regulation of ride-hailing companies and urged riders to oppose Council member Ann Kitchen’s “toxic plan.”

“Ride-hailing is moving Austin forward. Recent news reports indicate DWI crashes in Austin dropped 23 percent since ride-hailing entered the market,” the petition read. “And more than 50 percent of drivers live in East Austin, where one in three trips begin or end. Now’s the time to go forward – not backwards.”

Uber has provided more than 2.5 million rides in Austin the past year and there are more than 10,000 local drivers earning money through Uber, according to the petition.

“Ridesharing is improving transportation choices for all Austinites, reducing drunk driving and creating economic opportunities in communities that need it,” the release read.

According to Ed Kargbo, president of Yellow Cab Austin, there are five known transportation network companies operating in Austin, but he said Uber and Lyft are the only two which are usually discussed.

It will take baby steps to get there, but Karbo said from a standpoint of public safety there needs to be a policy where everyone who provides transportation for profit goes through the same background check process.

“Currently, anybody that drives a limousine, a shuttle, a pedicab, the golf cart, a cab — everybody that does on-demand transportation for compensation goes through a process by which they’re fingerprinted to properly identify the individual who wants to participate in the industry, and then subsequently doing a background check on them,” Kargbo said.

The fingerprint background checks are already required by Yellow Cab for taxi drivers Kargbo said. He said they are an important public safety measure, especially with the country’s high rates of identity fraud.

Kargbo said the proposed annual operating fee would either be a charge the company pays per driver or a one to two percent cut of the company’s annual local revenue, which depends on the option the company chooses. He said he questions why the city would have one group of companies paying fees when, currently, companies like Uber and Lyft pay nothing.

“They are actually getting a pretty good deal so I’m not quite sure why they would complain about it,” Kargbo said. “Even if they pay two percent of gross revenue… they would essentially be complaining about paying $54 per car when we pay $450 per car.”