AUSTIN, Texas – As Uber Technologies Inc. and Lyft Inc. left Austin after voters defeated their effort to change the city’s transportation network company regulations. A new ride-hailing app is on its way to take over the much needed service. Fare, from the transportation network company Ride Fare LLC, offers a different experience and its CEO Michael Leto said Friday he has been working in Austin since the biggest ride-sharing firms ceased operations in the city.

The new app also lets users request the service up to seven days in advance. Credit: Forbes

Leto told the Austin Business Journal that the Phoenix-based company expected to receive a conditional operating approval from the Austin Transportation Department on Friday afternoon. He added that 700 drivers have already gone through a preliminary criminal background check and that 600 additional drivers are in that process right now.

Fare riders won’t have to worry about surge pricing and they’ll be able to choose their preferred drivers to request them for future rides, Leto said.

One thing to note is that people can only join Fare through a referral code. The idea is to encourage them to spread the word and tell their friends to join the app. Once a Fare user provides the referral, they will receive a discount in return based on the activity of the referred rider.

Uber and Lyft’s fight to stay in Austin

Austin precincts reported on Saturday, May 7, that voters defeated the Prop. 1 backed by Uber and Lyft, which spent over $8.6 million to support their cause through Ridesharing Works for Austin, a political action committee.

The companies wanted to self-regulate their drivers, but voters defended stricter regulations passed in December by the city council, which included a requirement for all ride-sharing drivers to pass fingerprint-based background checks.

Council rules also required drivers with Uber and Lyft to mark their vehicles with the company’s logo and prohibited them to drop off or pick up customers in specific lanes of Austin’s streets, according to a report by The Guardian.

Lyft said in a statement that the regulations passed by City Council prevented “true ride sharing” from operating in the city. The company mentioned that the rules made it harder for part-time drivers to get on the road and even harder for riders to have access to the service as a consequence. The firm decided to pause operations on May 9 and focus on growth across the country.

As for Uber, it ceased operations in the city on May 9, too. The company’s Austin general manager, Chris Nakutis, told USA Today that he hoped the City Council would reconsider their rules in order to be able to join forces to provide a safe ride-hailing service in the city.

Both Uber and Lyft called on their rider base to help them in the polls. Uber texted customers asking them to support Prop. 1 and Lyft offered free rides to polling locations.

Austin activists against the ride-hailing companies were concerned about safety issues regarding background checks and corporate influence on the city’s government.

After the vote, Ridesharing Works claimed in a statement that the Council had intentionally confused voters by using ballot language, according to a report by Austin Business Journal. Former Mayor Lee Leffingwell expressed how disappointed he was by the results and said that thousands of citizens and visitors would be affected by not being able to use Uber and Lyft’s safe services anymore, adding that drivers would be forced to find other ways to earn income.

Leffingwell remarked that ridesharing was intended to reduce drunk driving and offer an economic opportunity, benefits that wouldn’t be seen in the city for some time. “We won’t stop fighting to bring it back”, he affirmed.

Austin, still an innovative city?

According to Paul Graham, cofounder of Y Combinator, Austin has no chance of “being a serious startup hub” now that Uber and Lyft have ceased operations in the city, according to CNN Money. Graham, who has supported several relevant startups such as Airbnb, Reddit, Stripe and Instacart, emphasized it was impossible to be a startup hub without having the ride-hailing companies around.

Arlo Gilbert, CEO at Austin tech firm Televero, remarked that the tech industry needs Austin to back startups given that the city is often considered as a hub for innovation. It ranked 6th in a recent report on the cities in the United States that are best prepared to manage the digital economy.

Gilbert, who noted that Google and Facebook are among the giant firms that have opened huge offices in the city, said that Austin has a distinct workforce that is “highly educated, technically sophisticated and relatively inexpensive”, which explains why the city is so important for the tech industry.

And Austin City Council member Ann Kitchen said “hundreds of drivers” appeared this week at Austin Community College to take part in a three-day job fair seeking to help drivers find new jobs. However, locals say the alternatives are not as better as those previously offered by Uber and Lyft. Kitchen pointed out that it’s impossible to entirely replace a service in a short period of time.

Source: Austin Business Journal