Wear: Ride-hailing law leaves Austin in state of redux


Highlights

With Austin law overruled by new state law, Uber and Lyft returning to unsettled ride-hailing market.

The companies, once alone in the market, now face new competitors and new attitudes.

Uber and Lyft could use pricing power, but companies here during their year hiatus hope for Austin nativism.

Austin, this is what disruption looks like.

Texas Gov. Greg Abbott is expected to put his Greg Abbott on House Bill 100, taking ride-hailing regulations statewide and quashing local laws like the one in Austin. You might have heard of it.

That means Uber and Lyft will rejoin the ride-hailing party in Austin, the one they used to have all to themselves until voters in May 2016 decided the revelry was a little too wild and opted for stricter Austin City Council rules. So Lyft and Uber went to those crazy guys and gals at the Capitol, who overruled the Austin scolds, along with the persnickety politicians in Houston and Corpus Christi and about 17 other Texas cities.

Texas now has just one 17-page law for ride-hailing. It requires no permits or fees for drivers, a fee to be determined for the companies that electronically assign them rides and no fingerprinting for criminal background checks.

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

The new statewide rules of the road, while they were written by lawmakers and legislative drafters, were informed, at least tacitly approved and carefully overseen by about three dozen lobbyists whom Uber and Lyft hired for this session. The law is more than a little reminiscent of what the Austin City Council had first passed in October 2014, back when the industry leaders had the ear of former Council Member Chris Riley and the wind at their backs.

Ah, 2014, the old days. Just how good they were depends on your point of view on vehicles-for-hire. And, yes, incredibly enough, a whole lot of Austinites (and other Texans, and Americans) now have a point of view on vehicles-for-hire, something they probably thought little about as recently as three years ago this month.

Back then, if you wanted a ride from a stranger in Austin (not counting transit bus drivers), you had a choice from among three taxi companies with a total of about 750 permitted drivers. Most of them worked for Yellow Cab. There were as yet no lime green ATX Co-op taxis on the street. The rates for any such rides were set by the city, and to get one you usually had to make a phone call or wave your arm at an actual cab.

With so few taxis around, and most of them concentrated at the airport or downtown, a pickup could take quite a while in many parts of town. Sometimes the cab’s interior was less than pristine and the driver uncommunicative.

And ride-hailing (which Uber and Lyft generously dubbed “ride-sharing”) was not allowed in these parts.

HOW WE GOT HERE: An interactive timeline of Austin’s ride-hailing election

The Cliff Notes version of what happened next:

Lyft and Uber start service here in June 2014 in defiance of Austin law. City regulators cite some drivers and impound their cars. Ride-hailing acolytes charge the city is just protecting an archaic taxi industry. The Riley council approves the Uber-and-Lyft rules. Ride-hailing takes hold here (and around the world). Women’s advocates report a rash of (never litigated) assaults on female passengers by Austin ride-hailing drivers, who undergo only name- and document-based criminal checks under Uber and Lyft internal policies.

(Breath)

A new Austin City Council, over Lyft’s and Uber’s objections, passes rules requiring driver fingerprinting, increasing fees and mandating more reported data to the city. An Uber surrogate entity circulates petitions to force a city election on a substitute ordinance much like the Riley rules. The two companies spend more than $10 million on the consequent election (dwarfing any amount from previous Austin muny campaigns). Austin voters tell them to go to a very warm place. Uber and Lyft turn off their apps in Austin (but not in its suburbs) and start pressing legislators to override the “patchwork” of local ordinances. Meanwhile, smaller ride-hailing companies take root in Austin, and (now fingerprint-checked) drivers go to work for them. The Legislature passes a bill. Abbott signs it into law, rendering the Austin ordinance a meaningless pile of syllables.

So now what?

Uber and Lyft immediately began signing up drivers Thursday after House Bill 100 passed the Senate — ones still around from a year ago who drive for RideAustin, Fasten and the other into-the-breach companies as well as newbies. Remember, this is a job that has an incredible amount of churn, given what many drivers find to be unexpectedly long hours and disappointing financial returns.

RELATED: With Austin rules gone, Lyft drivers set to get back behind the wheel

But for drivers here, and for customers, the year hiatus has altered the landscape in ways that are hard to predict.

Uber has been buffeted by a series of damaging revelations. Among them: a scathing expose by a former Uber female engineer of rampant gender discrimination and harassment in the workplace, a videotaped argument between company founder Travis Kalanick and an Uber driver, reports of potentially illegally “greyballing” to foil regulators in towns where the company was operating without city permission, and the news that Apple CEO Tim Cook took Kalanick to the woodshed a couple of years ago for secretly retaining iPhone records of customers who turned off the Uber app.

That cascade of image tarnishing could persuade some Austinites, both drivers and passengers, to use other services, including Lyft. On the other hand, Uber still has 800-pound-gorilla financial might and could use it to substantially undercut its competitors’ prices. And when people just want to get someplace, price can trump virtue.

What of the fingerprinting issue? RideAustin and Fasten officials say they’ll continue to use only fingerprinted drivers, citing the will of Austin voters last year, and that too could offer them a competitive advantage locally. How much is hard to say.

RELATED: What we learned by testing six of Austin’s ride-hailing apps

And, inevitably, some Uber or Lyft driver who cleared only a document-based criminal background check will commit, or be accused of committing, an assault or some other criminal act against a passenger. If history is any guide, the same could happen with an Austin cabbie who had a fingerprint-based background check. And we reporters will report it when it is brought to our attention, as we should, hopefully in proportion and context.

And the Austin City Council might choose to deregulate cab, shuttle and limo drivers — and the rates they charge — to achieve that long-discussed “level playing field” for all of those who provide ground transportation here. Of course, a truly flat landscape would mean not requiring drivers to be fingerprinted, as is still required for those city-regulated services. That’s unlikely to happen. Not here, not now.

Yes, disruption.

The supporters of HB 100 say this is instead what an open marketplace looks like. Let Austinites, and all Texans, sample this bubbling stew of rates, service and standards, and make their own choices, they say. May the best company, or companies, prevail.

Here we go.



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