Uber and Lyft to leave Austin after spending $8 million on failed vote

Ridesharing companies Uber and Lyft say they will indefinitely suspend service in Austin on Monday morning, after voters in the Texas capital defeated a measure on Saturday night that would have repealed city regulations and allowed the ridesharing industry to regulate itself. Specifically, drivers for the companies will have to eventually undergo background checks with fingerprints, display the company they are driving for in their vehicles, and won't be able to stop in traffic lanes to pick up and drop off passengers. It was the first time regulating ridesharing services was put to a vote in the U.S., and the measure failed, 56 percent to 44 percent.

Ridesharing Works for Austin, a political action committee funded entirely by Lyft and Uber, spent more than $8 million to promote Proposition 1 — the only measure on the ballot in the election — while a PAC opposing the measure, Our City, Our Safety, Our Choice, raised and spent $125,000. It was by far the most expensive municipal election in Austin history, beating the previous record of $1 million spent by Mayor Steve Adler in his 2014 election campaign. Ridesharing Works for Austin spent roughly $200 for each yes vote.

Neither proponents nor opponents of the measure say they want Uber and Lyft to leave Austin, and both companies left the door slightly open to resuming service. Anecdotally, lots of Austinites were conflicted over the merits of the measure but annoyed at what they viewed as Uber and Lyft's heavy-handed overreach. "As I talked to voters at the polls and on the phones, many of them like Uber's service and Lyft's, they use it, but they drew the line at allowing them to write their own rules," City Council member Kathie Tovo told KXAN.

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This was a big, embarrassing, expensive defeat for the "disgruntled tech industry man-babies" at Uber and Lyft, says Jalopnik's Stef Schrader, but it was hardly a win for Austin. "Alternate ride-hailing solutions aren't as polished yet, so unfortunately, losing these two insufferable companies would have a negative effect — especially after last call," because taxi services and public transportation in this drinking town are shoddy or sparse. One thing is certain: Other cities considering regulating Uber and Lyft will be watching what happens in Austin — and so will Uber and Lyft's competitors.