Remember how much fun we all had in Austin last spring talking about ride-hailing and fingerprints, sexual assault and drunken college students, innovation and legacy industries, public safety and unfettered capitalism? Do you recall the May 7 election, the one in which Uber and Lyft spent more than $10 million and in turn received a loud “no” from the electorate for their suggested city law?
Barkeep, hit me with another round.
State Sen. Charles Schwertner, R-Georgetown, whose district includes a piece of Austin, and state Sen. Don Huffines, another Republican whose suburban Dallas district most certainly does not, both rushed to submit bills last week that would overturn Austin’s law regulating ride-hailing services. Also Houston’s, Corpus Christi’s and Galveston’s, all of which have the driver fingerprinting requirement for criminal background checks that Lyft and Uber hate so much.
The legislation would also blot out ride-hailing ordinances in 14 other cities, including Dallas, San Antonio, Fort Worth and El Paso. But all of those local laws are acceptable to the industry leaders.
So, starting Jan. 10 when the Legislature convenes for its biennial bacchanal of bargaining, here we go again.
Schwertner’s bill is the one most likely to get some traction, at least in the Senate where Republicans will hold a 20-11 advantage over Democrats, and the conservative “freedom caucus” is likely to look kindly on legislation that takes a more hands-off approach to regulating the young industry. And the legislation likely would deal yet another blow to the heavily regulated cab industry, which many Republicans (and Uber and Lyft) see as protected by ordinances like the one the Austin City Council passed last December.
(Tell that to Yellow Cab, which until 2014 dominated the local rides-for-hire scene but has watched as no less than nine ride-hailing companies rushed into Austin in the wake of the May election, and after Uber’s and Lyft’s decision to cease operations within the city limits. And now, since early October, the three existing cab companies have new competition in the form of a cabbie-owned cooperative that has about 200 new lime-green cabs running around Austin streets with more on the way. Providing rides for hire in Austin has become something of a free-for-all.)
Back to Schwertner, and his Senate Bill 176.
Right off the top, it would prohibit municipalities from imposing a tax on a ride-hailing company, requiring a license for drivers or imposing any “rate, entry, operational or other requirements.” In other words, hands off, city councils.
The legislation, given that sudden regulatory vacuum, would have “transportation network companies” apply for a statewide permit with the state Department of Licensing and Regulation, and then pay a good-for-two-years fee ranging from $10,000 (for a company with 50 or fewer drivers) to $125,000 (if a company has more than 1,000 people providing its app-based rides).
The bill goes on to say that the companies will conduct a local and national criminal background check on each driver (it doesn’t mention fingerprinting, of course, so this is likely to be the document-based background check favored by Uber and Lyft), check to see if the applicant is on a sex offender registry and obtain the driving record of each applicant. And the legislation, which would take effect Sept. 1, lays out a series of driving offenses and other criminal convictions that would disqualify someone from driving for a state-licensed ride-hailing company.
There’s more, but you get the drift. One state law, rather than the hated “patchwork” of city laws around the state. Schwertner and other advocates for this approach point out that 34 states have some sort of unified regulation of the industry, in each case without fingerprint-based background checks. And they argue that, because the service involved is inherently mobile, and thus can reasonably be expected to cross city limit lines, it would be unfair to the companies and the drivers to have different requirements in each of several connecting cities.
Of course, that unified law could require fingerprints in a nonpatchwork way. But Lyft and Uber have made it very clear that that is a nonstarter to them.
Except when it’s not. In Houston, for example.
In an interesting bit of timing, Houston Mayor Sylvester Turner’s office last week announced that it had negotiated some changes to that city’s 2014 ride-hailing law, which requires fingerprinting of drivers. The deal strikes other elements of the current ordinance requiring drivers to wear a collared shirt (really), have a fire extinguisher in the car, undergo a drug test and a physical, and to use a vehicle that is no more than seven years old.
The fingerprinting requirement would remain in Houston, at least for now.
“This would allow us to stay through the Super Bowl,” happening Feb. 5 in Houston, Uber lobbyist and spokesman Trevor Theunissen told me.
What does this Houston kumbaya mean for the prospects of a statewide law in the 2017 session? Hard to say. There’s enough in there for both sides to use it as an effective talking point, so perhaps it’s a draw on that one.
The key battleground will likely be the House, where a similar bill in 2015 lingered for most of the session in the House Transportation Committee, was passed out of committee with a fingerprinting requirement amended on, and then died without reaching the House floor. At this point, no House members have filed a bill, but state Rep. Joe Pickett, D-El Paso, chairman of the transportation committee, said he fully expects one or more to pop up.
Where does House Speaker Joe Straus stand on this ride-hailing fight? His office didn’t return a call asking. Pickett said, as many have before, that Straus’ general position is to let the House work its will rather than imposing a direction from the top down. One suspects that is a fungible policy, with his involvement varying from issue to issue. Straus has constituents too, and he probably didn’t run for speaker just so he can bang a gavel and have a bigger office.
So expect Schwertner’s bill, or one very much like it, to make it out of the Senate. (Huffines’ bill, which largely deregulates the industry, is unlikely to move, I was told). And then we’ll see what happens in the House.
Austin, in the meantime, has those nine ride-hailing companies (although it appears that only about four or five of them are seriously competing at this point) and about 7,900 fingerprinted drivers granted permits by the city. After initial complaints about the loss of Uber and Lyft, I haven’t heard much since then.
Those companies seem to be able to exist, at least for now, with fingerprinting, and that is a point that Austin legislators and lobbyists will be making through the 140-day session. Perhaps in vain.