Are Austin’s ride-hailing rules headed for the boneyard?


A Senate panel considered three bills Tuesday that would override local ride-hailing rules.

Uber and Lyft could return to Austin later this year.

Austin’s 2015 ride-hailing ordinance last year overcame every dollar and every argument Uber and Lyft could throw at it, surviving a May election by a comfortable margin.

But that was another time and a different electorate.

The voters this year will be the 181 members of the Texas Legislature and Gov. Greg Abbott. And based on Tuesday’s committee discussion of three Senate bills that, in different ways, would override local ride-hailing ordinances and instead take statewide the regulation of transportation network companies, Austin’s law almost certainly is headed for the boneyard. And Uber and Lyft are probably headed back to town later this year.

Ride-hailing companies, state Sen. Charles Schwertner, R-Georgetown, said as he introduced his Senate Bill 176 to the Senate Business and Commerce Committee, need “a fair and predictable system of regulation. … This is a conservative, common sense, minimal framework that will be good for passengers and for TNCs themselves.”

Or, according to critics, legislation tailor-made by the ride-hailing giants and an abrogation of Austin voters’ clearly expressed policy preference.

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The committee did not take a vote Tuesday on SB 176 or the two other proposed versions of statewide ride-hailing regulation, SB 361 from state Sen. Robert Nichols, R-Jacksonville, and SB 114, by state Sen. Don Huffines, R-Dallas. But the delay appears to be more a matter of working out which approach to take in overriding local regulation of ride-hailing in Austin and 19 other Texas cities, not whether to do it.

Mandatory fingerprinting of drivers, the focus of the debate in Austin (Uber and Lyft objected to several other elements as well), would not be required under any of the three pieces of legislation, instead leaving background checks to the companies’ discretion. And each bill specifies that local government may no longer impose rules on ride-hailing companies or drivers. The main distinctions have to do with the degree of state oversight.

Schwertner’s bill would have the Texas Department of Licensing and Regulation issue permits to each ride-hailing company, charging them between $10,000 and $125,000 for the right to operate in the state. Nichols’ legislation, on the other hand, simply sets standards for operating and does not designate a department to assure compliance. Huffines would deregulate the taxi and limo industries in Texas as well as ride-hailing.

Does Uber have a preference?

“We don’t,” Trevor Theunissen, the company’s public affairs lead in Austin, said after the hearing. “All three contain a statewide framework.”

‘The voters’ will should be respected’

The two ride-hailing industry leaders followed through on a pre-election threat last May, shutting down their apps in Austin after voters sustained the ordinance they opposed. More than a half-dozen startup ride-sharing companies, including a nonprofit created by Austin tech leaders, streamed into the market void in the following weeks, agreeing to obey the city ordinance requiring fingerprint background checks. Thousands of drivers moved to the new companies, and despite some early bumps and a system crash during the first Saturday night of South by Southwest last weekend that disabled two of them for several hours, the service remains available with reasonable waiting times in Austin.

“South by Southwest is happening in Austin this week, and Austin is seeing thousands of visitors,” Nichols said. “They will find out that although you can use (Uber) elsewhere, you cannot use it in Austin.”

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Austin City Council Member Ann Kitchen, who carried the 2015 city ordinance that Uber and Lyft found overburdensome, stressed to the committee that the absence of Uber and Lyft operations in Austin is not a city mandate. She and others pointed out that other companies have taken their place, with several thousand ride-hailing drivers at work in Austin.

“They were not kicked out of the city,” Kitchen said. “They decided to leave. … The city of Austin stands by the democratic process and the voters’ choice. It’s working well, and the voters’ will should be respected.”

But Council Member Ellen Troxclair, who voted against the December 2015 city law and supported the Uber and Lyft referendum ordinance, said what Austin is doing has actually spawned an “underground black market” of drivers providing rides. She said that one Facebook page for this unregulated service has 40,000 members.

Support for bills

Speakers from Mothers Against Drunk Driving, the Texas Public Policy Foundation, Uber and Lyft all supported the pending statewide ride-hailing bills, saying that a patchwork of local laws is not appropriate for a service that often picks people up in one suburban city and drops them off in another.

Twenty Texas cities have ride-hailing ordinances, ranging from Fort Worth’s de facto deregulation of both taxis and ride-hailing to fingerprinting requirements in Austin and Houston.

Nationwide, 28 states have created a statewide ride-hailing law with specific bans on local regulation, according to the Texas A&M Transportation Institute’s Ginger Goodin.

“We have long believed that a statewide law is the best approach to regulate an industry where rides regularly end in another city,” April Mims of Lyft said. “This regulatory structure is not sustainable.”

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