Rick Jervis

USA TODAY

AUSTIN — Despite an $8 million dollar campaign by ride-hailing companies, Austin-area voters on Saturday rejected a proposal by Uber and Lyft to self-regulate their drivers and mandated stricter rules on the companies, including fingerprint background checks and emblems on cars.

Uber and Lyft had threatened to pull their operations from Austin should their proposal fail. The election was being closely watched across the USA as other cities, including Los Angeles and Miami, grapple with how best to regulate the ride-hailing companies. Results showed 56% of voters opposed Proposition 1, the initiative favored by the companies, and 44% were for it, according to Travis County election results.

"The people have spoken tonight loud and clear," Austin Mayor Steve Adler said in a statement. "Uber and Lyft are welcome to stay in Austin, and I invite them to the table regardless. Austin is an innovative and creative city, and we'll need to be at our most creative and innovative now."

Uber testing feature to cut wait times for drivers





GM, Lyft to test self-driving cars within a year

Austin City Councilwoman Ann Kitchen, who led the fight for more regulations, echoed Adler's call for the companies to stay in Austin but said it was clear residents want their regulation in city hands. "Nobody wants them to leave and we’re not asking them to leave," Kitchen told KUTX radio. "We held the election they said they wanted. It's time to listen to the voters and for them to sit down with us."

Saturday's vote culminates a two-year battle here between the companies and some city leaders. Lyft launched its service in Austin in 2014 but operated outside the rules applied to taxi drivers, such as fingerprint checks. Uber followed shortly after. The city initially agreed to allow the companies to perform their own background checks. But in December, the City Council passed an ordinance requiring more stringent fingerprint screenings. The companies threatened to leave Austin, as they have in other cities that have passed restrictive ordinances.

Lyft officials released a statement Saturday night restating their intent to shut down operations in the Texas capital by Monday.

"Lyft and Austin are a perfect match and we want to stay in the city. Unfortunately, the rules passed by City Council don't allow true ride sharing to operate," the company said. "Instead, they make it harder for part-time drivers, the heart of Lyft’s peer-to-peer model, to get on the road and harder for passengers to get a ride. Because of this, we have to take a stand for a long-term path forward that lets ride sharing continue to grow across the country, and will pause operations in Austin on Monday, May 9th."

Uber said it would stop operations in Austin by 8 a.m. Monday.

Richard Sherman went undercover as a Lyft driver in Seattle

“Disappointment does not begin to describe how we feel about shutting down operations in Austin," Chris Nakutis, Uber's Austin general manager, said in a statement. “We hope the City Council will reconsider their ordinance so we can work together to make the streets of Austin a safer place for everyone.”

Officials with both companies have said fingerprinting requirements are burdensome and unnecessary, given their own name-based background checks. City officials say fingerprinting adds another layer of security and balked at the multimillion-dollar corporations seemingly writing their rules here.

Ridesharing Works, the group backed by the companies, gathered 65,000 signatures in three weeks to bring the Austin debate to the ballot.

Uber and Lyft injected more than $8 million into the debate, spawning glossy fliers, door-to-door visits by volunteers, yard signs and TV and internet ads urging voters to pass the ballot initiative. A group opposing Proposition 1 spent far less, just over $100,000, according to campaign finance filings.

If you keep your Uber driver waiting, it could cost you

Adler said last week he was confident the companies won’t actually leave and that a mandate by voters would help renew negotiations. Earlier this year, a task force formed by the mayor created the Thumbs Up! initiative, which would expedite the fingerprinting process and act as a third-party to validate drivers. The ride-hailing companies agreed to the initiative, but not in time to stop the city from holding the election.

"A 'no' vote is the vote that best puts everyone back to the negotiating table to best promote safety choices in the community," Adler said at the time.