Unregulated taxi services Uber and Lyft have lost their fight against biometric background checks for drivers in Austin, Texas.
The fight originated with municipal legislation aimed at pushing the companies to implement fingerprint-based background checks for their drivers, with Uber and Lyft retaliating by collecting enough signatures to force a city referendum on the matter. Monday’s result found voters in agreement with the city’s legislation.
It was an expensive battle for the companies to lose. They had spent over $8.6 million campaigning for their side in the referendum, and as a major American city Austin represents a significant market. As a result of the vote, Uber and Lyft have chosen to halt their services in the city rather than comply with the biometric background checks, making Austin the biggest US city in which Uber does not operate.
The service cancellations are likely meant to discourage other cities from implementing similar legislation, but may also galvanize government opponents of the unregulated taxi services by suggesting a new means of attack. And given that officials in other cities are considering similar legislation and, as The Wall Street Journal points out, Uber does comply with biometric regulations in New York and Houston, these largely unregulated taxi services may eventually reconsider their positions on this particular form of regulation.
Sources: The Wall Street Journal, NBC News
May 1o, 2016 – by Alex Perala