House OKs state rules on paid ride firms
Measure supersedes local regulations but ditches fingerprinting
Texas lawmakers moved closer Wednesday to state control of companies such as Uber and Lyft, including an easing of the hurdles compared to what the companies now face in Houston.
The Texas House by a vote of 110-37 approved a bill by Rep. Chris Paddie, R-Marshall, that would place transportation network companies under state control and prohibit cities from enacting their own regulations.
If approved by the Texas Senate and signed by the governor, the bill would usurp existing local rules.
Paddie proposed legislation last session, but it failed to gain traction. Following Austin’s referendum that strengthened the city’s oversight of paid ride companies, the issue regained a foothold in the Capitol among lawmakers who felt the cities over-regulated the companies.
The bill would give oversight of companies that connect willing drivers and interested riders via smartphone to the Texas Department of Licensing and Regulation. The companies that operate the smart phone app and process payments between the riders and drivers would pay a $5,000 annual licensing fee and certify that its drivers meet a number of
requirements already common among the companies.
Uber and Lyft have aggressively sought state rules in Texas because of their opposition to city requirements, notably those of Austin and Houston. In Austin, both companies left the city after new rules that included fingerprint background checks went into effect nearly one year ago.
Houston, which hosted the Super Bowl in February, requires fingerprinting but allows for a 30-day provisional license that can be acquired without a fingerprint. Lyft exited the Houston market in November 2014 before fingerprint checks began. Fingerprint checks
Approval of the bill was delayed after lawmakers attached language related to non-discrimination policies to the bill, leading to back-and-forth discussions and an amendment defining “sex” in the bill as strictly “being a male or a female.”
As with the contentious fights at the local level, discussion also focused on requiring the fingerprinting of drivers. The companies vigorously oppose fingerprint background checks, favoring their background checks based on Social Security numbers.
Numerous attempts to require fingerprint checks or allow cities to require them failed as amendments to Paddie’s bill.
“We should not take chances with any life,” said Rep. Yvonne Davis, D-Dallas, noting many professions in Texas are subject to the fingerprint background check.
On Wednesday, Florida became the 41st state to enact statewide rules for companies such as Uber and Lyft, Paddie said. None of them includes fingerprint requirements.
Some lawmakers defended the rights of cities to exert local control.
“A local community should have the right to exceed those standards by a voter-approved ordinance,” said Rep. Gina Hinojosa, DAustin.
Others pressed for even less regulation than Paddie’s proposal provides.
“The idea that the government is the best way to keep people safe is simply not the case,” said Rep. Matt Schaefer, R-Tyler. Regulations debated
The companies have called the different city ordinances inconsistent, which makes it difficult to operate in a market such as Houston where various municipalities have slightly different rules, while other municipalities and unincorporated areas have no regulations at all.
Texas cities have defended their regulations and opposed the state taking control. Houston claims the success of the Super Bowl shows the companies can co-exist with fingerprints, while Uber officials have said the provisional license shows their systems screen drivers properly.
Prior to the Super Bowl, however, city officials said the difference between the two background checks was clear.
“In the months leading up to the Super Bowl, half of the (transportation network company) drivers coming for a two-year license who completed the fingerprint background check had hits on their background,” said Lara Cottingham, deputy assistant director in the city’s Regulatory Affairs Department.
Though the total number of Uber drivers in Houston is kept confidential, as the company claims it is a trade secret, it has radically altered the paid ride business.
“Before (the companies) came to Houston, the city held background check hearings one day a month,” Cottingham said. “Now we hold them 3 times a week.”