Austin American-Statesman

Ride-hail startups meet city standard

Official says at least half of rides in July given by fingerprin­ted drivers.

- By Ben Wear

All eight of the ride-hailing companies operating in Austin met a city requiremen­t to have at least half of the rides they provided in July come from drivers who passed fingerprin­t-based background checks, according to a city memo released this week.

Achieving that Aug. 1 benchmark — the first major regulatory milestone since the Propositio­n 1 election in May — shows how quickly the smaller competitor­s built their networks of drivers, even with the fingerprin­ting checks and other requiremen­ts that prompted Uber and Lyft to leave Austin.

Taken as a group, the smaller companies provided more than 350,000 trips in July, almost 11,300 a day, during what would normally be a slack period because enrollment is light at area colleges during the summer.

About 3,000 of those daily rides were provided by Fare, a Phoenix-based company, according to its chief executive, Michael Leto. He said his company, which began operations in Austin in late May, has about 3,700 drivers on the street.

“And all of this growth has been done during the slowest part of the year,” said Leto, whose company operates in Austin and Phoenix.

RideAustin, a nonprofit formed by Austin tech leaders in the wake of the Prop 1 election and the

ride-hailing vacuum it created, got a later start in June and has been hampered by initially having an iPhoneonly app; it expects rapid growth when it opens its service to Android-equipped drivers next month. The company has about 1,000 drivers on the street, said Joe Deshotel, RideAustin’s director of community engagement.

“It’s definitely been interestin­g” competing in a market thick with startup ride-hailing companies, Deshotel said. “Maybe by the end of the year we’ll have a better idea of how all this is going to shake out.”

Since January the city has received 3,771 fingerprin­t-based, background reports on potential ride-hailing service drivers, according to the memo from Austin Transporta­tion Department Director Robert Spillar to the Austin City Council.

All of those, including those whose checks occurred earlier in the year, were vetted against a list of disqualify­ing criminal offenses set out in a June 2016 ordinance, Austin Transporta­tion Department spokeswoma­n Cheyenne Krause said. Of those applicants, 86 were rejected for failing their background checks.

The companies, most of which still employ some drivers who haven’t been fingerprin­ted, reported having 8,985 drivers. However, the memo says, individual drivers might be counted two or more times in that total because many work for more than one of the eight companies: Fare, Fasten, GetMe, InstaRyde, RideAustin, Tride, Wingz and Z-Trip.

The companies, by city ordinance, were required by Aug. 1 to have at least 50 percent of their rides for the preceding month provided by drivers compliant with city rules, either as a percentage of hours driven or miles driven. The memo, citing informatio­n supplied by the companies, said Wingz and Z-Trip were at 100 percent. RideAustin was next, at 89 percent, followed in order by InstaRyde (86 percent), Tride (73 percent), Fare (69 percent), Fasten (58 percent) and GetMe (55 percent).

The city is monitoring the progress toward fingerprin­ting in a couple of ways. It looks at the percent of service provided — either by miles or hours of service — by drivers who are compliant, that is who have passed the fingerprin­t-based background check. It also looks at the percentage of drivers signed up for each company who have undergone the screening.

In a couple of cases, a company had less than half of its drivers meeting the fingerprin­t requiremen­t, even though more than half of the service it provided came from fingerprin­ted drivers. That would suggest some drivers on a company’s roster aren’t on the street yet, or that fingerprin­ted drivers are simply providing a larger share of the rides.

Only 41 percent of InstaRyde drivers, for instance, are considered compliant, even though 86 percent of its hours driven came from fingerprin­ted drivers, as reported by the company.

Under city law, the companies will face their next benchmark of 85 percent compliance on Dec. 1, and must have 99 percent of their service provided by fingerprin­ted drivers by Feb. 1 and beyond.

The city has granted “operating authority” to four other companies. Two of them, ReDriver Tech and ScoopMe, haven’t begun to operate yet, Krause said.

The other two are Uber and Lyft, but the city suspended their operating authority after both had been inactive for at least 30 days and had failed to supply the required reports. Both refused to continue operating in Austin after voters rejected Prop 1 in May.

Both ride-hailing giants also continue to pick up customers outside the city limits and drop them inside Austin.

The Spillar memo also reported that four drivers for another, unauthoriz­ed company (Arcade City, Krause said) were ticketed June 17 for operating without a valid chauffeur permit. All four vehicles were impounded, Spillar wrote, and the company will also be cited.

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