When Uber Left Austin

“We wanted them to comply with something and, Uber and Lyft basically said ‘no,’ and, like a toddler, stomped off.”

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May 26 2016, 2:20pm

Image: Rideshare Works for Austin

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Remember when Uber came to your city? It was probably exciting—you could hail a car without talking to anyone or standing on a cold, rainy corner. It's so easy, maybe you thought. Maybe the taxi commission or some local politicians expressed worry about this new interloper from San Francisco. But Uber has this game down. It comes to town, becomes incredibly popular, worries about regulations later and usually wins because the general public likes the service.

Soon, you forget about there ever being a time before Uber existed. When did it come to town, anyway? There were just suddenly hundreds, maybe thousands of regular people happy to drive you and your friends around town. Maybe your coworker drives an Uber in his or her free time. Remember when you used to have to beg your friend for a ride to the airport? Me either.

As fast as Uber came to your city, it can leave. It might leave. With no physical infrastructure and no real employees, it's trivial for Uber to expand to a new city, and just as easy for it to depart. Those thousands of contract drivers? Some of them lease or buy cars specifically to drive for Uber. Some of them drive Uber to support their new baby. When Uber leaves, overnight, hopefully those drivers have a backup plan. Uber is an app, after all. It's a platform. It's a business. It can leave. It just left Austin.

Image: Rideshare Works for Austin

"There's something unique about Uber because unlike a telecom company or other businesses that operate in a city—what the company requires as far as infrastructure is very minimal," Rick Claypool, author of a new report about how Uber does politics, told me. "They can credibly threaten, 'it's my way or the highway and we're going to go.' It's an app versus something that has brick and mortar buildings. They have no employees, they have no cars, so really what their investment is in the actual place is minimal. They have an extraordinary amount of leverage in that sense."

Read more: Uber's Drive-By Politics

Uber (and Lyft, for that matter) followed its basic gameplan in Austin, Texas. It came to town in early 2014. Local lawmakers and the taxi lobby wondered whether ridesharing companies were following commercial driver regulations about driver insurance, licensing, and driver background checks. By the time they got around to enforcing any sort of regulations, the services were too popular, and Uber and Lyft were given temporary permission to operate in the city.

But Austin still wanted regulations. The city council proposed that Uber and Lyft require its drivers to get a fingerprint background check administered by the city. Uber and Lyft said that would discourage people from driving and would impose an undue burden on their companies and their drivers. Uber and Lyft got signatures from community members to put a ballot initiative at the poll called "Proposition 1." A vote for Prop 1 would preserve the status quo, allowing Uber and Lyft to operate as it does in most of the country. A vote against would be a vote for regulation.

"We wanted them to comply with something and, Uber and Lyft basically said no, and, like a toddler, stomped off."

Uber and Lyft started a political action committee called Rideshare Works for Austin to lobby for Prop 1. Rideshare Works for Austin hired former Austin mayor Lee Leffingwell to support Prop 1. It plastered Austin with billboards, radio ads, flyers and leaflets, and television ads. It advertised on Hulu. Rideshare Works for Austin spent $9.1 million trying to pass Prop 1, which was roughly six times more than had ever been spent on any local election in Austin for any reason.

"It looked like, it felt like they were buying every piece of airtime that could be bought in the city," Nolan Hicks, a reporter for the Austin Statesman told me. "It was just total saturation, something that no one had ever seen before in municipal politics."

On May 7, Prop 1 failed; the voters of Austin decided that any corporation that spent that much money couldn't really be trusted. On May 9, Uber and Lyft were gone.

Uber and Lyft are currently working on getting the Texas state legislature to pass a law that would overrule Austin's local regulations. It's unclear if they're ever going to come back. Uber and Lyft aren't saying. The companies declined to be interviewed for this podcast.

"My friend, she was like, 'I thought Austin kicked Uber and Lyft out,'" one local told us. "And I said, 'No, we wanted them to comply with something and, Uber and Lyft basically said no, and, like a toddler, stomped off.'"

What happens when Uber and Lyft leave? Do we even need them? That's what I wanted to find out with this podcast. I spoke to Austin Statesman reporter Nolan Hicks about the leadup to Prop 1, Claypool about how Uber's tactics in Austin mirror those it's used around the country, and Austin native Michael Humphreys about a new underground ridesharing network he's created. Motherboard contributor Rollin Bishop collected interviews with normal Austinites on the ground for me. Mark Leombruni edited this episode.

Uber Earth is Motherboard's exploration of the ways Uber has already changed the world and how it stands to do so in the future. Follow along here.

Show Notes:

:35 - Here's our slate of stories about Uber, and here's Adrianne's intro piece.

2:15 - Background on Prop 1

2:20 - Rideshare Works for Austin

2:35 - This is the ad you heard in the podcast

3:30 - Austin voting results

3:45 - Uber and Lyft announce they're pulling out of Austin

4:20 - Greg Abbott on Uber

4:50 - Here are Nolan's stories about Uber and Prop 1

5:10 - October 2014 temporary regulations for ridesharing

7:20 - Here's the full text of Prop 1

9:10 - Hicks reported that Rideshare Works for Austin spending passed $9 million on May 9

18:43 - Lee Leffingwell was mayor of Austin from June 2009 through January 2015. Leffingwell was paid by Uber for his endorsement.

24:30 - Here is Rick Claypool's paper

27:00 - How the Telecom Lobby Gets Away With Rewriting America's Laws

28:00 - Background about Illinois Uber situation

29:50 - Here's some background in Boston

34:03 - Here's the Austin Underground Rideshare Community