Uberless Austin Needs To Stop Calling Itself The No. 1 City For Startups

By Kish Rajan

For the second year in a row Austin, Texas, is boasting that it is the No. 1 city for startups. That’s some nice PR, but the entrepreneurs trying to build the Silicon Valley of Texas likely don’t feel like they’re in a sophisticated tech hub. They can’t even use Uber.

Since May 9th, there have been no Ubers and no Lyfts in Austin. People who relied on the ridesharing companies to navigate the city have had to find other (more expensive or less convenient) ways to get around. And the thousands of people who were earning money as drivers? They’re out of work.

(Photo: TLVshac)
(Photo: TLVshac)

And it doesn’t look like that’s going to change any time soon. The City of Austin is vowing to keep its sharing economy unfriendly policies in place even if the state enacts new rules.

Austin’s title as top startup city comes from the Kauffman Index which ranks cities on things like the rate of entrepreneurial growth and the density of startup firms per 1,000 people. Those numbers show how entrepreneurial the city is. The population is ripe for something like Uber which not only makes it easier to get around but gives people a way to earn extra money while they are going to school, working on the great American novel or saving money to start their own business.

But Uber and Lyft are no longer an option for the people of Austin. The companies left the city after voters failed to change a law that requires transportation companies to do fingerprint background checks on their drivers.

Fingerprint checks are one of those things that seem like a great idea but when you dig a little deeper, they really don’t do all a concerned citizenry might expect. Fingerprint checks are expensive and they take a long time to get results. That’s a burden on potential drivers.

Then they don’t even catch all criminals. The checks are usually state based which means if someone committed a crime in another state it wouldn’t necessarily show up on a fingerprint background check.

Companies like Uber and Lyft want passengers to feel safe when they hail rides. So they do their own background searches on drivers through third parties that often do much more extensive searches than a fingerprint check. Austin’s fingerprint requirement wouldn’t have made riders any safer, it just would have made life harder for drivers.

Any city that puts up these kinds of barriers against an innovative tech company like Uber doesn’t have the right to call itself the top startup city in the nation. It doesn’t matter what the numbers say. Sometimes policies speak louder than numbers.

If Austin really wants to be seen as a viable competitor to Silicon Valley it should change its outdated regulations and make the fingerprint check requirement a thing of the past. Entrepreneurs are smart and mobile. Without rideshare companies, Austin stands to lose its standing next year as entrepreneurs flock to the next, more welcoming, tech hub.