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In the Uber Age, a Boom in Background Checks
As companies like Uber and Lyft grow, the demands on screening firms also are expanding.
The growth of firms such as Uber Technologies Inc. and Lyft Inc. has been a boon for the background checkers tasked to vet hundreds of thousands of amateur taxi drivers.
But those background scans are undergoing changes of their own as sharing-economy firms bring massive volumes and new pressure to run checks more quickly and frequently, prompting companies to update their offerings and introduce new products.
Background checks were at the heart of a battle that led ride-hailing firms Uber and Lyft to halt operations in Austin, Texas, on Monday.
In a citywide referendum, Austin residents voted in support of local rules requiring fingerprint scans for drivers—regulations that Uber and Lyft spent millions to fight.
For companies that rely upon on-demand workers, “speed is king,” says Pascal Levy-Garboua, vice president of business development at San Francisco-based Checkr Inc., which counts Uber, Instacart Inc. and DoorDash Inc. among its clients.
Checkr’s background scans take two days on average, Mr. Levy-Garboua says.
Checkr, founded in 2014, conducts more than 300,000 checks a month, noting that they have more than doubled from April 2015 to April 2016.
“Everybody would dream of being able to provide a background check response in seconds. That’s the dream,” he says. “But right now it’s not possible.”
For Uber, Checkr runs a security trace identifying addresses associated with a person in the past seven years, and then matches any convictions during that time.
Checkr has built filters into its background checks that quickly flag unqualified applicants to make the process faster.
For example, if a check found a potential driver had a drunken-driving conviction, it would stop the scan immediately, rather than moving on to check that person’s full criminal record.
Many taxi firms, which are heavily regulated by local laws, vet drivers using Live Scan, which takes a person’s fingerprints and runs them through federal and state databases to ensure that they aren’t wanted criminals.
Drivers generally must go to specific locations to get fingerprinted, which can add time and expense, Uber and Lyft have argued.
Criminal incidents have raised concerns about safety among on-demand companies and have led to calls in more cities for firms such as Uber and Lyft to require additional checks for their drivers.
Uber and Lyft have aggressively fought fingerprint regulations in several U.S. cities, including Austin and Houston. The companies contend that their own checks, which include running a drivers’ identifying information through several databases, are more effective than fingerprint checks, which may take longer to process and can cost about $40 to $50, though costs vary.
Checkr says its base price is $35 for a background check, but that can decrease if volumes from the client are high. SterlingBackcheck, which handles checks for Lyft, says its average background check is about $30.
Uber and Lyft also say fingerprint checks may result in potential drivers waiting longer before they would be permitted to offer rides through the ride-sharing services, possibly slowing the companies’ expansions in some markets because a large number of drivers quit after a few months.
Some law-enforcement professionals and elected officials contend finger-print scans are more secure than basic background checks.
Background check “rules are less clear” where freelance workers are concerned, says Rod Fliegel, the co-chair of employment law firm Littler Mendelson P.C.’s privacy and background-checks practice, which advises on-demand companies and others.
Firms checking on contractors may be able to access more information about their contractors’ past than they can for traditional employees, such as convictions that occurred more than seven years ago.
“They have a little more room to exercise the discretion about what they think is best for the business,” Mr. Fliegel says.
Some firms are experimenting with different ways to keep tabs on drivers, including monitoring contractors after they are hired.
Clare Hart, chief executive of SterlingBackcheck says some on-demand clients are opting to have contractors rescreened every six to 12 months.
Checkr also offers post-hire screening, with checks as frequent as every three months, and it is starting to roll out continuous monitoring, in which the company constantly scans databases for convictions of active contractors.
“There are areas where [on-demand firms are] probably even more conservative, making sure they’re getting it right,” compared with traditional employers, Ms. Hart says.
Lyft also uses a system of “mentors” to help screen most drivers before they undergo official scans.
Andi Kohn, 42 years old, has driven part-time for Lyft in Austin since 2014. She has helped vet other drivers by checking out their cars, going on practice drives and ultimately, she says, making sure “that you’d feel safe to have your grandmother driving with them.”
Those that pass muster with Ms. Kohn then undergo a formal background check.
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