Austin goes undercover in sting operation targeting underground ridesharing

The Austin Transportation Department is going undercover to catch underground ridesharing drivers they say violate city code. (KEYE TV)

The city's transportation department goes undercover to catch underground ridesharing drivers they say violate city code.

The sting targeted a group called Arcade City, which does not consider itself a transportation network company. It uses a Facebook page to connect riders and drivers and an app is in development. On Friday, June 17th, the Austin Transportation Ground Transportation Regulation Division conducted the operation. Four drivers were cited for operating without a valid operating authority and operating without a valid city chauffeur permit. Their vehicles were also impounded.

"They informed me it was an undercover sting," said driver Cheri Hawes.

Hawes is part of the Arcade City Facebook community page of drivers and riders in Austin. It has almost 40,000 members.

She was shocked when it cost her $220 in towing fees and several citations up to $500 each. "I really thought the city was kind of behind us. It's really helped so many people. For them to really have dedicated time to this I was really surprised," said Hawes.

The city started conducting undercover stings two years ago to catch illegal Uber drivers.

On Friday, the target was Arcade City and affiliated drivers.

"Arcade City did come in when there wasn't anybody else. Uber and Lyft didn't have to leave but they just dumped everybody. That was a lot of people out of work and a lot of people upset that they couldn't get to work," said Bruce Hawes.

His wife's sole income is driving. They both praise the management team at Arcade City for standing by the rideshare community in Austin. Bruce believes the sting on Friday was a waste of city resources. "To impound someone's car over something this small is really ridiculous," said Bruce.

Cheri says it won't stop the group that picks up where other companies left people stranded. "We're not going to stop. I don't see it deterring any of us," said Cheri.

According to its Facebook page, Arcade City is exploring its legal options against the city for the impoundment of the vehicles. Arcade City says only one of the cited drivers is affiliated with their group.

The city says it highly encourages users to look for services that fully vet their drivers and have safety measures in place for both riders and drivers and that it will continue to enforce the city code.

In a statement, the Austin Transportation Department wrote:

If a company or individual is providing a ride for compensation and that compensation exceeds the federal reimbursement rate for privately-owned vehicles, those services are subject to regulation by City Code Chapter 13-2. Companies and individuals providing transportation service and charging more than the federal reimbursement rate without appropriate documentation are illegal in the City of Austin. We highly encourage users to look for services that fully vet their drivers and have mechanisms in place to ensure the safety of both the riders and the drivers. The City of Austin has and will continue to enforce this provision of the Code.

Austin City Code Chapter 13-2 describes compensation as " any money, thing of value, payment, consideration, reward, tip, donation, gratuity, or profit paid to, accepted, or received by the driver or owner of any vehicle providing transportation for a person."

Uber and Lyft had until midnight Monday to submit data reports to the city or risk getting their operating authority revoked. Both companies halted operations in Austin already. The current TNCs that have operating authority include: Ztrip, FARE, Wingz, GetMe, Fasten, ReDriver Tech, ScoopMe, Tride and RideAustin.

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