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Uber and Lyft shutdown in Austin after voters defeat Proposition 1

TechCrunch TechCrunch 7/05/2016 Fitz Tepper

Today voters in Austin, TX went to the polls to weigh in on Proposition 1, an attempt to overturn a bill requiring mandatory fingerprint-based criminal background checks for new Uber and Lyft drivers in the city.

The results are in, and with 56 percent of total voters voting against Prop 1, the proposition failed to pass. This means that the bill requiring fingerprint-based background checks will proceed, with new drivers needing to pass the check before being able to drive.

In response to the news, Uber and Lyft have announced that they will be shutting down operations in the city, at least temporally.

Uber and Lyft have argued that their own background checks are stringent enough, and that the fingerprint-based checks (which would be done by the City of Austin) are an unnecessary burden and cost that would make it harder to recruit drivers to the platform.

The defeat is a serious setback for Uber and Lyft, who spent a combined $8 million dollars on advertisement encouraging voters to support the proposition. Comparatively, a political action committee that is anti-Prop 1 spent under $100,000 on advertisements opposing the proposition.

In a tweet, Austin Mayor Steve Adler, who did not support the proposition, responded to the vote saying that “The people have spoken clearly tonight. Uber & Lyft are welcome to stay & I invite them to the table regardless”.

Now, it will be up to Lyft, Uber, and the city of Austin to figure out a solution that works for all parties. In the meantime, both services will remain shut down in the city until further notice.

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