San Antonio Buys Time on Regulations to Find Place in Uber Economy

San Antonio—For those engaged in the ongoing saga of Uber and Lyft versus fingerprinting, the next date to mark is in October, at least in the Alamo City.

Uber, Lyft, and Get Me will be able to continue offering rides to the people of San Antonio until at least October, after a decision yesterday by the San Antonio City Council to extend a deal it made with the ridesharing companies last year. The pact, which allows drivers to opt in to a fingerprinting background check, was set to expire in July for Uber, and for Lyft and Get Me after that, but the council voted yesterday to extend the date into October for all three.

That will give the city’s staffers the summer to work with the industry on how to move forward regarding regulations, Steven Baum, the assistant director of the city’s police department, told the elected officials yesterday. The deal also requires the companies to pay fees to the city.

The effort to keep Uber and Lyft in the city highlights San Antonio’s position in the modern economy. The city is making a concerted effort to develop certain sectors, and its leaders are strenuously trying to attract new businesses and a strong workforce—especially tech workers who want services like on-demand cars. Much of that effort has been driven by the city’s economic development department and affiliated nonprofits, such as the San Antonio Economic Development Foundation.

Tech Bloc, a business-focused nonprofit, was a driving force behind encouraging San Antonio elected officials to ink the contract with the ride-hailing app companies last year—the one that was extended yesterday—which eased earlier, stricter regulations. That agreement went into place in October, a few months after Uber briefly shut down services in San Antonio because of regulations.

The same position hasn’t been held by every community in the country—or everywhere in Central Texas, for that matter. In May, Uber and Lyft left Austin, the state capital about 80 miles north of San Antonio. The cause was a decision by the city’s voters to require fingerprint-based background checks on Uber and Lyft drivers, among other regulations—a vote that the ride-hailing businesses asked for after the Austin City Council imposed the rules.

Like in San Antonio, a group called Austin Tech has sprouted in response to the departure of Uber and Lyft from Austin, spearheaded by local tech leaders like Joshua Baer. Only two months since the vote, Austin has seen different results than San Antonio, which briefly lost Uber and Lyft, however.

A bevy of new ride-hailing apps have entered the Austin market to fill the gap left by the market leaders’ departure. First to rise was a Facebook-centered service called Arcade City that says it uses blockchain technology, followed by Get Me, Boston-based Fasten, Fare, and a nonprofit app developed as a direct response, RideAustin—among a few others.

While Austin’s stance has been “build it if they leave,” other cities nationally have taken more of a funambulist approach, like San Antonio.

In Massachusetts, the state’s Senate passed legislation Wednesday requiring a state background check and a company background check—but it notably excluded fingerprinting requirements according to the State House News Service. Taxi industry supporters still said the legislation is “lacking in public safety provisions,” according to The Boston Globe. The Senate bill will be reconciled against a bill from the Massachusetts House, and would have to win the governor’s support to become law, the Globe says.

For San Antonio, one thing remains clear: The juggernaut ride-hailing apps Uber and Lyft seem as if they’ll continue operating in the city through at least October. The future of ride-hailing may depend on the discussions that city staffers have in the meantime with the car service companies—and other interested parties, like the taxi lobby.

The initiative may also hinge on the city’s desire to build its tech economy, something Austin is better known for as a more established startup powerhouse.

The other stakeholders of San Antonio remained pretty quiet at yesterday’s city council meeting, with only two comments coming from the audience. Both were concerns about having enough regulation to ensure public safety, as well as concern over diminishing ride fares, and both speakers noted they have ties to the traditional taxi industry.

David Holley is Xconomy's national correspondent based in Austin, TX. You can reach him at dholley@xconomy.com Follow @xconholley

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