Updated: Uber threatens to exit Houston over regulations

In what promises to make a huge splash in Austin’s furious discussion of Proposition 1, ride-hailing giant Uber now says it could soon pull out of Houston.

In a letter to Houston’s City Council dated today, Uber Houston General Manager Sarfraz Maredia claimed that regulations in that city “are some of the most burdensome in the country.”

Maredia blamed a prior Council for enacting the rules back in 2014, prompting Uber’s chief competitor, Lyft, to cease operations in Houston.

“We know that many of you have inherited these challenging regulations and we are optimistic that we can work together in the next few months to bring Houston’s rules more in line with the rest of the country,” Maredia wrote. “However, if the City refuses to act, we will have to cease operations just as other ridesharing platforms previously did.”

The news out of Houston comes during the first week of early voting in Austin on Prop 1, which would change existing ride-hailing regulations in this city.

If a majority of voters approve the ballot measure, potential Uber drivers would no longer be required to undergo fingerprint-based background checks in order to operate on city streets.

Uber has threatened to leave Austin if voters instead uphold that requirement. The company has claimed that fingerprinting is not only redundant to its existing screening policy, but also that it delays the hiring process for new drivers.

However, opponents of Prop 1 have consistently pointed to Houston as an example of a city where Uber operates successfully despite an ordinance that requires fingerprinting of drivers. In fact, Houston’s regulations go much further than Austin’s existing rules. For example, drivers in the Bayou City must also pass a drug test and carry a fire extinguisher in their vehicles.

But Uber and members of Ridesharing Works for Austin – the political action committee advocating for Prop 1 with the help of millions in funding from Uber and Lyft – have maintained that Houston’s regulations have diminished service in that city.

A cursory check on Uber’s app of various pickup locations within Houston’s Interstate 610 loop on Wednesday afternoon yielded estimated wait times between three and 14 minutes.

In his letter to Houston’s City Council, Maredia claimed that the city’s rules have resulted in an average four-month gap between the time a driver signs up and the time he or she is finally permitted to legally pick up passengers.

“This bureaucracy is preventing many Houstonians who are qualified to drive from earning extra money that can help boost their household income,” Maredia wrote. “In fact, since the regulations were adopted, more than 20,000 people in Houston have completed Uber’s thorough screening process but did not proceed with the City’s multi-step licensing process and as a result, were unable to drive.”

The Austin Monitor is reaching out to both the Ridesharing Works for Austin PAC and the group opposing Prop 1, the Our City, Our Safety, Our Choice PAC. We’ll update this story when we hear back.

Update: Speaking on behalf of Our City, Our Safety PAC, former Austin Council Member Laura Morrison noted the “curious timing” of Uber Houston’s announcement and tied it to Ridesharing Works in Austin’s controversial political efforts.

“If fingerprint background checks were so onerous, Uber would have left Houston a long time ago,” Morrison said. “The timing of this completely fits the pattern of their whole campaign based on misrepresentations attempting to manipulate the voters. It’s one more dishonest message from Uber demanding that we have to obey Uber or else. It’s an insult to Austin voters and an attempt at extortion.”

On Wednesday afternoon, an Uber spokesperson told the Monitor that Uber Houston’s decision did not happen spontaneously. “We have been talking to the City about revising these rules for months. However, the situation is getting progressively worse,” Jaime Moore said.