AUSTIN – Faced with a ride-hailing void after a contentious regulation battle pushed Uber and Lyft to leave the city, Austin tech leaders created an alternative — a non-profit ride-hailing company backed by local donations.
On Monday, they unveiled RideAustin, an app that came together in the 16 days since Austin voters on May 7 rejected a proposition by Uber and Lyft that would allow the companies to essentially self-regulate and bypass the city’s mandate for fingerprint background checks on drivers. Two days after the failed vote, Uber and Lyft shut down operations in Austin.
The companies have faced similar challenges in Los Angeles, Seattle, Philadelphia and a host of other cities.
Austin-based engineers worked around the clock in the two weeks since the failed vote here to launch the app and initiative. To fund the platform, RideAustin collected private donations from locals and tapped corporations that pre-paid for thousands of local rides, said Joe Liemandt, a local tech entrepreneur and RideAustin co-founder.
RideAustin began recruiting drivers on Monday and expects to start rides in mid-June.
“This is by Austin, for Austin,” Liemandt, said. “Tech can’t solve this problem alone. We are one leg of the stool. The way the community came together on this has been amazing.”
RideAustin will work much the same way Uber and Lyft do, with a downloadable app and pick-up algorithms designed to cut down on wait times, he said. It will also have a feature that allows riders to donate to local charities. Its founders say they plan to fully embrace the city's background checks.
Joe Garcia, a lobbyist for Yellow Cab Austin, said local taxi officials question RideAustin drivers being allowed to operate initially just in the downtown area and whether the non-profit will have adequate insurance coverage, among other issues.
"We think there are a lot more questions to be asked," he said.
RideAustin’s unveiling marks the latest salvo in a battle simmering since December when the city passed an ordinance requiring more stringent fingerprint screenings for the ride-hailing drivers. Uber and Lyft had performed their own background checks since launching here in 2014.
The companies reportedly gathered 65,000 signatures to put a proposal on the ballot that would allow them to run their own background checks on drivers and spent more than $8 million to sway voters their way. When the vote failed, the companies made good on their promise to shut down their apps in Austin, angering many residents and more than 10,000 drivers who relied on Uber and Lyft for income.
Ken Flippin, 43, a former driver for both Uber and Lyft, said his ride-hailing wages contributed to between 20% and 90% of his monthly income. He said he’s skeptical that a non-profit could compete with private companies, but was encouraged by the initiative. He planned to sign up.
“A new alternative system could be better for drivers,” he said. “It’s intriguing.”
In its early days, the new service will limit itself to the downtown and airport areas, growing out from there to ensure quality of service and that the city’s requirements are being built into the platform, said Andy Tryba, another RideAustin co-founder who recruited engineers in this high-tech hub to build the platform from the ground up.
“We’re really excited,” he said. “You get to really start with a blank slate.”
Unlike Uber and Lyft, RideAustin officials will share their data for public research, Liemandt said. That research could help answer questions kept secret by the private companies, such as whether lower prices actually draw more riders or whether price surges discourage them.
“We’re going to be opening the box to how all these ridesharing [companies] work,” Liemandt said.