Uber Vs. Austin: Board Member Says City Council Acted At Taxi Industry Behest, Wrote Prop. 1 Ballot With Intentionally Confusing Language

David Plouffe, Uber’s resident Chief Advisor and member of the ride-sharing firm’s board of directors, spoke earlier today at TechCrunch Disrupt NY 2016 about Uber’s departure from Austin, Texas.

“This wasn't a situation where we weren't regulated, or that there was a problem to be solved. Uber and Lyft were flourishing in Austin,” Plouffe said. “We were regulated in Austin. The types of regulation that we have in California, in Chicago, in many parts of South Florida. So we were regulated. And then, I think some city council people at the behest of taxi industry tried to come in and add a whole bunch of barriers to entry that would essentially turn us into a taxi.”

Voters in Austin failed to pass a ballot initiative known as Proposition 1, which would overturn new regulations Austin implemented in December 2015. These regulations meant that the City of Austin would be responsible for running FBI-level background checks on drivers, that drivers would need to differentiate their cars clearly with company-specific emblems, and that passengers could not be picked up or dropped off in travel or bus lanes.

After a special election was called and $8.6 million spent collectively by Uber and Lyft to overturn the regulations, less than 20 percent of voters showed up to the ballot box, with almost 56 percent of those voters choosing in favor of keeping the regulations. In response, both Uber and Lyft have pulled out of the Austin market, leaving only GetMe operating. Plouffe says the ballot language was “unfair” and “not on the level,” and that the first time he read it, he didn’t know which side to vote for.

“It was written, I think, to basically preordain an outcome. And we had a huge hole in terms of education, because a lot of the rhetoric coming out would suggest we weren't currently doing background checks. I think we've done 50,000 background checks in Austin alone,” Plouffe said. “In Austin, a third of the taxi drivers and limo drivers who applied to drive for Uber, we rejected, because they didn't pass the background check.”

Plouffe cited Uber’s inability to meet demand during closing time for bars in Houston as the pitfalls of over-regulation, saying that the one of the prime reasons people pay for Uber is because they feel safe using it. He describes a “safety circle” consisting of Uber-run background checks at the federal, state, and county levels, as well a zero tolerance policy for DUIs, GPS tracking logs and lack of anonymity, as the reasons Austin’s new regulations represent a needless barrier to entry for prospective drivers hoping to earn supplemental income.

“At the end of the day, you think about a city like Austin, I think probably three-quarters of our drivers drive 10 hours a week or less. A lot of artists, a lot of writers, a lot of people looking to piece together income — and you got the University of Texas,” Plouffe said. “The impact on reduction of DUIs [had] been tremendous. We're hopeful over time, there'll be a way back into the market.”

Both Austin Mayor Steve Adler and Austin Police Chief Art Acevedo spoke against the new regulations back when they were first passed, citing concerns about what would happen if Austin residents lost a popular nighttime transportation option.

Plouffe was previously President Obama’s campaign manager in the 2008 election, and was appointed as a Senior Advisor to the President after David Axelrod’s departure from the White House. Uber hired Plouffe as their Senior Vice President of Policy and Strategy in 2014, before replacing him eight months later with a former Google executive. Plouffe stayed on with Uber as a board member with the official position of Chief Advisor.