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Phillips: Austin loses local control of Uber, Lyft — and big money


Corporate giants Uber and Lyft have knee-capped Austin.

The city will pay a high cost, losing its authority to regulate all ride-hailing companies and hundreds of thousands of dollars that will be diverted to the state under a new measure the Texas Legislature passed this week.

How much? Austin City Council Member Ann Kitchen says the city will lose more than $900,000 annually – the amount current ride-hailing companies pay to operate in the city.

Got that? The money that once went to Austin taxpayers, now goes to the state.

“Austin is prohibited from receiving any fees under the new law, even though Uber and Lyft are using our city streets,” Kitchen told me. “The state law which allows for fees was established for the purpose of addressing use of infrastructure.”

That goes away with House Bill 100.

The passage of the law also throws chaos into a system the Austin City Council implemented to create a more level playing field between taxis and ride-hailing companies. So, the city also will pay in the amount of time it will take to develop new rules to address those issues.

RELATED COVERAGE: Uber, Lyft nearing return to Austin

The big question for Austin officials and consumers is whether they will fight back or submit to big government tactics that not only usurp local control and values but take money out of the pockets of local residents.

Austin consumers can do that by making informed choices when they summon ride-hailing companies, choosing to do business with those that followed local rules, paid their fees to operate in the city and stuck with Austin residents when Uber and Lyft threw tech tantrums and left town.

The following have earned Austin’s business: Ride Austin, Fare, Fasten, Get Me, Tride, Wingz and zTrip.

If disrespecting the will of Austin voters isn’t enough to instill loyalty in consumers, consider that Uber broke its promise to create 5,000 jobs for East Austin residents, leaving them and thousands of drivers who had signed on with Uber and Lyft in the lurch.

Remember it was a local measure, which required ride-hailing drivers to undergo fingerprint-based security checks, that sent Uber and Lyft into a frenzy. It didn’t fit their business model, they whined. Uber and Lyft demanded to use their own name- and document-based security checks, even though law enforcement agencies recommended fingerprinting.

Austin’s ride-hailing law becomes immediately inoperative upon Gov. Greg Abbott’s signature. Oversight for ride-hailing companies shifts to the Texas Department of Licensing and Regulation.

But Austin consumers are not defenseless. They have a good opportunity to send Uber and Lyft a strong-worded message about Austin values. It’s a city that wouldn’t be bullied or bought: 55 percent of voters said “no” to Uber’s and Lyft’s $10 million referendum.

MORE COVERAGE: What does overturn of ride-hailing rules mean for Austin?

That is why Uber and Lyft, dropping millions in lobby fees, turned to the Legislature.

In passing legislation that regulates ride-hailing companies in all Texas cities, the GOP-controlled Legislature continues to speak out of both sides of its mouth. It endorses local control when it suits Republican purposes — but acts with the force of big government when cities, exercising their constitutional powers to govern locally, adopt policies that are counter to GOP interests.

In matters of school finance, for instance, the state is happy to shove its burden for financing public schools on to the backs of local school districts and their taxpayers, driving up property taxes to near-suffocating levels. But state government wants to seize Austin’s authority and money when it comes to regulating Uber and Lyft.

That is not good government; that is a racket.



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