Uber and Lyft have only been operating in Austin for about a week but local ride hailing companies say they are already feeling the effects of the increased competition.
“We do need a minimum number of rides to keep the business afloat,” said Chief Operating Officer at RideAustin Marisa Goldenberg.
The magic number for RideAustin is 20,000 customers a week. That’s something they haven't had trouble reaching since last summer.
“I actually don't own a car and that's only possible because I have these ride sharing services,” said Austin resident Alex Kilkka.
In May 2016, Austin voters approved a city ordinance requiring ride hailing drivers to get fingerprint background checks, causing ride hailing giants Uber and Lyft to leave the market.
“After the first week or two of panic, then I realized, okay, it's going to be okay, someone else is going to enter the market, we're going to figure it out, and I'm really proud of the local community for stepping up and filling in that gap,” Kilkka said.
Local companies like FARE, Fasten and RideAustin stepped up taking over ride hailing operations in the Capital City. That was until a law took effect Monday turning ride hailing regulations over to the state and overriding Austin’s ordinance and fingerprint background check requirements.
“We knew all along that Uber and Lyft would eventually return to Austin. They would bring their billions of dollars, and so when RideAustin was created, it was created to be intentionally very different and to essentially do opposite things from Uber and Lyft,” Goldenberg said.
RideAustin said they take zero commission from drivers, allowing them to keep more money in their pockets, and the nonprofit donates to local charities. But the number of customers they cater to significantly dropped since Uber and Lyft returned.
In fact, last week RideAustin served about 58,000 customers. Compare that to this week when that number was closer to 25,000. Some of that can be attributed to the time of year, when University of Texas students have left for the summer.
“It will probably be a little bit more than 50 percent lower than what it was all of last week,” said Goldenberg.
“I'm not completely surprised that a lot of people have moved back to the other service, but I do hope that the companies that are local can stay afloat throughout all this,” said Kilkka.
RideAustin said they will voluntarily continue to fingerprint their drivers as soon as the city develops a new process for them to do so.
In the meantime, they will not be able to bring on any new drivers but they think it will only be a matter of weeks.