As of 8:30 a.m. Monday, the Lyft app in Austin was still carrying this message: “Lyft is not yet available here.”
Then, a few minutes after 10 a.m., Gov. Greg Abbott used four pens to affix his signature to House Bill 100, taking ride-hailing regulation statewide in Texas and rendering moot the Austin ordinance that Lyft and its chief competitor, Uber, disliked so much they shut down operations in Austin a little more than a year ago.
The Lyft app went live about 10:40 a.m. Uber and its app followed about noon.
The Austin ride-hailing free-for-all had officially begun.
Monday, Abbott said, is a “celebration of freedom and free enterprise,” referencing the bill signing and Memorial Day.
“This is freedom for every Texan, and especially those who live in the Austin area. … It’s so disappointing that we gather today in a city that rejected and jettisoned that very freedom from the customers who wanted to have a choice about which transportation provider they would choose,” he said.
Austin leaders, who in December 2015 passed the law that Uber and Lyft could not countenance, rejected that formulation of the situation as HB 100 worked its way through the Legislature this spring. Legislators, they said, instead were overturning the purest form of democracy: an election a year ago in which a proposed Austin law crafted by Uber and Lyft was defeated.
The two ride-hailing pioneers, after a year of being available only to Central Texans calling for a pickup in Austin’s suburbs, are back. But RideAustin, Fare and a handful of other ride-hailing companies who set up shop and flourished in the absence of the industry leaders, remain in the market, as does a fourth cab company, ATX Co-op Taxi.
‘We’re sorry, Austin’
Uber and Lyft return to an Austin market with complex dynamics. The two companies in 2016 spent more than $10 million on a referendum petition and campaign to pass that alternate Austin ordinance, which was soundly defeated last May. The companies turned off their passenger apps within the city limits two days later, leaving their drivers mostly without fares and their riders more or less stranded because at that point just one small ride-hailing company was operating in the city.
Uber addressed that awkward and very recent history in an open letter to Austin customers earlier this month:
“We’re sorry, Austin — for leaving the way we did; for letting an honest disagreement about regulations and consumer choice turn into a public fight; and most of all, for not being able to serve you for the last year,” said the letter from Trevor Theunissen, an Uber spokesman. “It was never our intention, but we let down drivers, riders and the broader Austin community. We’ve spent the last year listening carefully and learning from the mistakes we made.”
About 30 Uber and Lyft drivers were on hand at Abbott’s signing of HB 100 in a show of support and to make it clear to the media covering the event that they are again open for business.
Giovanni Van Sandt, 40, who began driving for Lyft two years ago, was among that throng. He has been driving for RideAustin mostly in recent months on the overnight shift — “I’m a bit of a night owl,” he said — but he added that he will probably go back to Lyft exclusively now. He also works part time in the company’s Austin office.
His income in recent months “has definitely been lower than it was. I seemed to do better when I was driving for Lyft,” he said, mostly because of the company’s bonus program. Ride-hailing use in Austin seems to have shifted, with people tending to take shorter trips now, he said.
HB 100, authored by Rep. Chris Paddie, R-Marshall, and pushed by more than three dozen Uber and Lyft lobbyists, puts ride-hailing regulation under the Texas Department of Licensing and Regulation and explicitly states that local governments cannot regulate the service or charge fees to companies or their drivers.
While it lays out a number of required standards for ride-hailing companies, including what sort of criminal convictions would render someone ineligible to drive, it does not require that drivers be fingerprinted for criminal background checks, as Austin’s regulation did. Drivers would be subject instead to background checks, conducted by third-party vendors hired by the ride-hailing companies, based on public documents such as driver’s licenses and Social Security numbers.
Nor does it require drivers to get individual permits or display so-called “trade dress” on their vehicles telling customers which company provided the ride. Gone too are the requirements of the Austin law for extensive monthly reporting of ride data.
Before he signed the bill, Abbott referred to “heavy-handed bureaucrats in Austin and other cities” who he said were trying to overregulate the industry, driving up costs and driving down options for consumers.
HB 100 does require companies to pay a fee to the state for the authority to operate, but the new law does not lay out the size of that fee. It is unclear how long it will take the state to set up its oversight of the companies and commit regulations to writing. The new law says that companies doing ride-hailing business in the state, which includes Uber and Lyft in multiple Texas cities, will be able to operate in the interim as those rules are formulated.