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Uber and Lyft Lose Austin Vote Resoundingly, Despite Spending $8.6M on Campaign

Ride-hailing companies suspend local service in what could be a precedent-setting election with national implications

After the resounding defeat of a ballot proposal that would have changed regulation of the industry in Austin, ride-hailing companies Uber and Lyft have suspended service in the city. The Austin American-Statesman reported this morning that drivers will continue to pick up and drop off riders outside city limits, which could be quite the boon for Round Rock, Pflugerville, and even West Lake Hills, depending on how the statement is interpreted.

The suspensions come after Austin voters defeated Proposition 1, a proposal to roll back ride-hailing regulations the City Council passed in December; the council rules requires drivers with ride-hailing apps to undergo fingerprint-based background checks by Feb. 1, 2017, instead of using the name-based checks that Uber and Lyft prefer.

While voter turnout was low (17 percent), the Statesman reports, the vote was 56 percent against and 44 percent in favor of the measure.

The vote came about after a successful petition drive by Ridesharing Works for Austin, a PAC formed for the purpose of repealing the law. Uber and Lyft funded Ridesharing Works heavily; the group received and spent an unprecedented $8.6 million in the election. (In contrast, current Mayor Steve Adler spent $1.2 million on his campaign, the highest in any local election until this one.)

Prop 1 opponent group Our Safety, Our Choice, by contrast, spent less than $200,000 on its campaign.

The rather jarring amount spent by Ridesharing Works went primarily to television ads and direct mail, both of which might have caused a bigger backlash than expected; opponents grew more vocal as flyers piled up their mailboxes; the group was also alleged to have sent out "robotexts" to voters—the latter leading to a federal lawsuit.

The latter was merely one incident in a ferocious campaign on both sides. It included charges that the ballot language the ride-hailing companies charged was confusing (and also took to court, where the case was rejected), fact-checkers' conclusion that mailers and television ads were misleading, the Austin Police Department revising data that had been the basis the ride-hailing campaign's claims, phone banking, neighborhood canvassing, Lyft's giving free rides to the polls, and the hiring of former Mayor Lee Leffingwell to oversee Ridesharing Works' efforts.

There is some speculation that Ridesharing Works' campaign galvanized the anti-Prop 1 vote, as voters came to see it as an example of dishonest, overly monied corporate bullying. Lyft and Uber also helped write the proposal, according to Our Safety, Our Choice, while Ridesharing Works insisted that the proposal was what the council originally had in place before December's revisions.

Even before voting concluded Saturday, pundits were opining that the vote would have nationwide implications. Longtime political consultant David Butts, who led Our Safety, Our Choice, told the Statesman that he believes Uber tried to make the Austin ballot a national example, and that the reverse happened instead.

Uber and Lyft are fighting similar regulations in major cities across the country, including Chicago, Los Angeles, and Atlanta. Uber most recently threatened to leave Houston, Texas, over its regulations but has remained in the city. Lyft does not operate in Houston.

Ride-hailing companies will most likely work with the state Legislature, as they did in 2015, to try get it to intervene in local regulations.

Ride-hailing app GetMe remains in service in Austin; Austin taxi companies also have the HailaCab app, which operates similarly to the ride-hailing apps.

Prop. 1 goes down as activist proclaims: ‘Austin made Uber an example' [AAS]