Ride-hail­ing rules may be scrapped

Sen­ate bills would im­pose state rules over lo­cal reg­u­la­tions.

Austin American-Statesman - - FRONT PAGE - By Ben Wear bwear@states­man.com

Austin’s 2015 ride-hail­ing or­di­nance last year over­came ev­ery dol­lar and ev­ery ar­gu­ment Uber and Lyft could throw at it, sur­viv­ing a May elec­tion by a com­fort­able mar­gin.

But that was another time and a dif­fer­ent elec­torate.

The vot­ers this year will be the 181 mem­bers of the Texas Leg­is­la­ture and Gov. Greg Ab­bott. And based on Tues­day’s com­mit­tee dis­cus­sion of three Sen­ate bills that, in dif­fer­ent ways, would over­ride lo­cal ride-hail­ing ordi- nances and in­stead take statewide the reg­u­la­tion of trans­porta­tion net­work com­pa­nies, Austin’s law al­most cer­tainly is headed for the bone­yard. And Uber and Lyft are prob­a­bly headed back to town later this year.

Ride-haili n g com­pa­nies, state Sen. Charles Sch­w­ert­ner, R-Ge­orge­town, said as he in­tro­duced his Sen­ate Bill 176 to the Sen­ate Busi­ness and Com­merce Com­mit­tee, need “a fair and pre­dictable sys­tem of reg­u­la­tion . ... This is a con­ser­va­tive, com­mon sense, min­i­mal frame­work that will be good for pas­sen­gers and for TNCs them­selves.”

Or, ac­cord­ing to crit­ics, legislation tai­lor-made by the ride-hail­ing gi­ants and an ab­ro­ga­tion of Aus-

tin vot­ers’ clearly ex­pressed pol­icy pref­er­ence.

The com­mit­tee did not take a vote Tues­day on SB 176 or the two other pro­posed ver­sions of statewide ride-hail­ing reg­u­la­tion, SB 361 from state Sen. Robert Ni­chols, R-Jack­sonville, and SB 114, by state Sen. Don Huffines, R-Dal­las. But the de­lay ap­pears to be more a mat­ter of work­ing out which ap­proach to take in over­rid­ing lo­cal reg­u­la­tion of ride-hail­ing in Austin and 19 other Texas cities, not whether to do it.

Manda­tory fin­ger­print­ing of driv­ers, the fo­cus of the de­bate in Austin (Uber and Lyft ob­jected to sev­eral other el­e­ments as well), would not be re­quired un­der any of the three pieces of legislation, in­stead leav­ing back­ground checks to the com­pa­nies’ dis­cre­tion. And each bill spec­i­fies that lo­cal gov­ern­ment may no longer im­pose rules on ride-hail­ing com­pa­nies or driv­ers. The main dis­tinc­tions have to do with the de­gree of state over­sight.

Sch­w­ert­ner’s bill would have the Texas De­part­ment of Li­cens­ing and Reg­u­la­tion is­sue per­mits to each ride-hail­ing com­pany, charg­ing them be­tween $10,000 and $125,000 for the right to op­er­ate in the state. Ni­chols’ legislation, on the other hand, sim­ply sets stan­dards for op­er­at­ing and does not des­ig­nate a de­part­ment to as­sure com­pli­ance. Huffines would dereg­u­late the taxi and limo in­dus­tries in Texas as well as ride-hail­ing.

Does Uber have a pref­er­ence?

“We don’t,” Trevor The­unis­sen, the com­pany’s pub­lic af­fairs lead in Austin, said af­ter the hear­ing. “All three con­tain a statewide frame­work.”

‘The vot­ers’ will should be re­spected’

The two ride-hail­ing in­dus­try lead­ers fol­lowed through on a pre-elec­tion threat last May, shut­ting down their apps in Austin af­ter vot­ers sus­tained the or­di­nance they op­posed.

More than a half-dozen startup ride-shar­ing com­pa­nies, in­clud­ing a non­profit cre­ated by Austin tech lead­ers, streamed into the mar­ket void in the fol­low­ing weeks, agree­ing to obey the city or­di­nance re­quir­ing fin­ger­print back­ground checks. Thou­sands of driv­ers moved to the new com­pa­nies, and de­spite some early bumps and a sys­tem crash dur­ing the first Satur­day night of South by South­west last week­end that dis­abled two of them for sev­eral hours, the ser­vice re­mains avail­able with rea­son­able wait­ing times in Austin.

“South by South­west is hap­pen­ing in Austin this week, and Austin is see­ing thou­sands of vis­i­tors,” Ni­chols said. “They will find out that although you can use (Uber) else­where, you can­not use it in Austin.”

Austin City Coun­cil Mem­ber Ann Kitchen, who car­ried the 2015 city or­di­nance that Uber and Lyft found over­bur­den­some, stressed to the com­mit­tee that the ab­sence of Uber and Lyft op­er­a­tions in Austin is not a city man­date. She and oth­ers pointed out that other com­pa­nies have taken their place, with sev­eral thou­sand ride-hail­ing driv­ers at work in Austin.

“They were not kicked out of the city,” Kitchen said. “They de­cided to leave . ... The city of Austin stands by the demo­cratic process and the vot­ers’ choice. It’s work­ing well, and the vot­ers’ will should be re­spected.”

But Coun­cil Mem­ber Ellen Trox­clair, who voted against the De­cem­ber 2015 city law and sup­ported the Uber and Lyft ref­er­en­dum or­di­nance, said what Austin is do­ing has ac­tu­ally spawned an “un­der­ground black mar­ket” of driv­ers pro­vid­ing rides. She said that one Face­book page for this un­reg­u­lated ser­vice has 40,000 mem­bers.

Sup­port for bills

Speak­ers from Moth­ers Against Drunk Driv­ing, the Texas Pub­lic Pol­icy Foun­da­tion, Uber and Lyft all sup­ported the pend­ing statewide ride-hail­ing bills, say­ing that a patch­work of lo­cal laws is not ap­pro­pri­ate for a ser­vice that of­ten picks peo­ple up in one sub­ur­ban city and drops them off in another.

Twenty Texas cities have ride-hail­ing or­di­nances, rang­ing from Fort Worth’s de facto dereg­u­la­tion of both taxis and ride-hail­ing to fin­ger­print­ing re­quire­ments in Austin and Hous­ton.

Na­tion­wide, 28 states have cre­ated a statewide ride-hail­ing law with spe­cific bans on lo­cal reg­u­la­tion, ac­cord­ing to the Texas A&M Trans­porta­tion In­sti­tute’s Ginger Goodin.

“We have long be­lieved that a statewide law is the best ap­proach to reg­u­late an in­dus­try where rides reg­u­larly end in another city,” April Mims of Lyft said. “This reg­u­la­tory struc­ture is not sus­tain­able.”


State Sen. John Whit­mire, D-Hous­ton, takes a photo of the over­flow crowd at meet­ing of the Sen­ate Busi­ness and Com­merce Com­mit­tee on Tues­day.

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