City needs smarter standard on driver background checks
The sharing economy is making headlines in Austin. Expedia’s $3.9 billion acquisition of Home Away is certainly a reason to cheer and market-based proof that consumers support choice. We’ve seen similar adoption with companies like Uber and Lyft that offer options on how to get around the city. However, when it comes to the headlines that we’re seeing about transportation, the recent buzz has a different flavor that is more cause for concern than celebration.
A debate is unfolding between Austin City Council members on the Mobility Committee and the Austin Transportation Department about regulations and how they should be applied or not applied to both taxi cab drivers and Uber and Lyft drivers. The latest conversation centers on background checks and fingerprinting — and there is very little consistency.
Uber conducts background checks on its drivers with a different level of rigor than that required of those licensed to drive taxicabs in the city of Austin. They rely on transparency aided by technology to provide assurance to customers — things like GPS tracking, crowdsourced ratings and realtime location alerts. This bypasses a cumbersome and archaic process and more efficiently delivers the intended result. According to a local news report, an internal Uber audit showed that 53 drivers who failed their background checks have been issued chauffeur’s licenses by the city of Austin. The Austin Transportation Department submitted an initial recommendation to the Mobility Council that the City Council create standard rules across the board that mirror Uber’s process.
The second part of the dialogue is around fingerprinting, an arduous process and a classic example of how regulations that may sound like a good idea can have a disastrous effect — even if unintended. Requiring all drivers to submit fingerprints is an extra step and not a simple task that has proven to greatly reduce the number of people who sign up to drive. Which begs the question: Is it really worth it? Does fingerprinting really make enough of a notable difference to justify the risk?
I’ve talked a lot over the past few years about how over-regulation stifles economic growth and innovation. In this particular case, fingerprinting is an unnecessary process that will result in fewer drivers and fewer options for riders. Competition is a good thing — and we need to encourage as many options as possible as we all try to get around our traffic-clogged city.
Equally as important, the sharing economy has a very real impact for entrepreneurs in Austin, in particular for those who are ready to take the leap, leave a day job and turn a concept into a company. For many of my friends and fellow entrepreneurs, being an Uber or Lyft driver provides them with a flexible income option that allows them the freedom to make important choices like launching a startup, knowing they can cover their expenses with money made from driving for Uber or Lyft. It’s a reality that I hear over and over at incubators, accelerators and co-working spaces all across town.
It would be a great disappointment if Austin, a city that is nationally recognized for its creative culture and entrepreneurial energy, allows an unnecessary mandate like fingerprinting to increase regulatory burdens and reduce consumers’ choices. Of course, everyone values safety — but let’s encourage smart approaches that leverage technology.