Uber threatens to leave Houston

Uber told Houston officials it will leave unless changes are made to the city's regulations requiring drivers to undergo fingerprint background checks and other screenings. Uber told Houston officials it will leave unless changes are made to the city's regulations requiring drivers to undergo fingerprint background checks and other screenings. Photo: Jeff Chiu, AP Photo: Jeff Chiu, AP Image 1 of / 29 Caption Close Uber threatens to leave Houston 1 / 29 Back to Gallery

Uber has issued an ultimatum to Houston to reform its rules for allowing drivers to partner with the company or it will leave town.

“We have worked hard and taken extraordinary steps to help guide drivers through the current process in Houston,” Uber’s Houston manager Sarfraz Maredia told City Council in a letter delivered Wednesday afternoon. “However, a year and a half later, it is clear the regulations are simply not working for the people of this city.”

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The company and city have sparred since Uber came to Houston in February 2014, notably after city regulations went into effect in November of that year that required all drivers to submit to fingerprint background checks. Uber prefers another background check method, and the company and city disagree on which is more successful in securing rider safety.

No departure date has been set, Uber spokeswoman Debbee Hancock said.

“We have not set a specific deadline,” she said. “We want to work with the city to develop regulations that work for riders, drivers and the entire community. We understand this process may take a few months.

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Houston officials have insisted fingerprint checks are necessary to ensure public safety. The topic received intense scrutiny after a Houston driver was accused of sexually assaulting a passenger. Though a grand jury failed to indict him, the issue divided Uber and Houston because he was operating on the smartphone-based ride hailing platform without a city license.

Houston officials said he would have failed their background check because of a prior federal drug conviction, which Uber’s background check did not catch.

Still, Houston is an outlier in requiring fingerprinting. Only New York City – a huge taxi market where Uber drivers must have the same license as a cab driver – also requires a fingerprint background check.

Since the rules went into effect, Uber officials said 20,000 people have signed up to be drivers in Houston and then not completed the city’s licensing process. As a result, according to a report presented with Maredia’s letter to city officials, fewer part-time drivers in Houston partner with Uber.

“Houstonians who could most benefit from such flexible economic opportunities are often the ones who are least able to access them,” Maredia wrote.

Hancock said applicants either gave up during the licensing process, or didn’t even start it once they reviewed the regulations.

“More people have not completed the process than have,” Hancock said.

The number of drivers remain a closely-guarded company secret, and the city is prohibited from saying how many license have been issued.

Meanwhile use of Uber in Houston surges, something both sides have said bolsters their case. The city argues use means Uber is profitable even with the regulations, though the company says they stifle supply of drivers.

“Demand continues to grow approximately twice as fast as our ability to onboard qualified drivers,” Maredia told city officials. “Riders ultimately end up paying the price when there are not enough drivers on the road, particularly when demand spikes during major events. For example, over the Final Four weekend in Houston, one in three trips involved surge pricing. This is unsustainable.”

The company has suggested leaving Houston before, especially as it wages a contentious battle opposing similar regulations in Austin. Voters there will decide on May 7 whether to tighten regulations of Uber and similar ride hailing companies.