With passage of ride-hailing bill, when will Uber return to Austin?

Updated May 17, 2017
Stephen Spillman
A vehicle displays both Uber and Lyft markings on Fourth Street in May 2016.

A bill that would take ride-hailing service regulations statewide got final approval Wednesday in the Texas Senate, putting Austin’s homegrown ordinance one step closer to oblivion.

The signing of House Bill 100 by the governor would immediately render Austin’s ride-hailing law inoperative, and pave the way for Uber and Lyft to resume passenger operations in Austin. An Uber spokesman confirmed Wednesday that the company will begin operating again in Austin upon the governor’s signature.

Late Wednesday afternoon, Gov. Greg Abbott tweeted a link to a news story about Uber’s pending return, adding, “Buckle up. Coming soon.”

The industry leaders turned off their apps here last May after voters rejected a substitute ordinance that the companies liked better than what the Austin City Council had put in place in late 2015.

About half a dozen smaller companies have cropped up on the Austin scene in their absence, giving drivers and passengers many options about which service to put on their smartphones.

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

Uber and Lyft representatives have said 40 states now regulate such services on a statewide basis, putting Texas out of step. Uber issued a statement shortly after the final vote Wednesday saying that a statewide ride-hailing law “will help bring greater economic opportunity and expanded access to safe, reliable transportation options to more Texans,” attributing those words to Uber Texas’ general manager, Sarfraz Maredia. “We look forward to making Uber available in more cities across Texas.”

The bill passed Wednesday retains a sentence, added in the House, that defines the word “sex” in a nondiscrimination section as “the physical condition of being male or female.” State Sen. Charles Schwertner, R-Georgetown, asked about that language by Sen. José Menéndez, D-San Antonio, characterized it as harmlessly “stating the obvious.” But Menéndez said the language could “open the door to potentially discriminating against people who are transitioning” from one gender identification to another.

Uber and Lyft representatives have said that, regardless of such language in the bill, their own policies prohibit drivers from discriminating against passengers based on sexual orientation or identity.

Eliminating patchwork of rules

HB 100 would override the state’s 20 or so municipal ride-hailing ordinances and instead put such companies under the oversight of the Texas Department of Licensing and Regulation. It would require companies to pay an unspecified fee to that department, sufficient to cover the cost of regulating the industry, the bill says. Drivers wouldn’t have to buy an individual permit.

It requires the companies to conduct criminal background and sex offender checks for drivers, but doesn’t demand (as the Austin ordinance does) that the drivers be fingerprinted for such checks. This would allow the companies to use the name- and document-based background checks they prefer.

And it lays out a number of criminal offenses that, depending on when they occurred, could render a potential driver ineligible to provide ride-hailing services.

Uber and Lyft have spent several million dollars on lobbyists in each of the past two legislative sessions, but failed to get a statewide law in 2015. Later that year, Austin passed the local ordinance that the companies opposed. Uber and Lyft, through a surrogate political action committee, within a month completed a petition drive to force an election in Austin on a city law to their liking.

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

The companies spent more than $10 million in that election, but their measure was rejected by Austin voters. That episode led to the second go-round at the Capitol. The bill’s sponsors and the companies say that a “patchwork” of local regulations are inappropriate for a service that moves from one jurisdiction to another.

“Drunk drivers don’t stop at city limit lines,” said Schwertner, the bill’s Senate sponsor.

Overriding vote of Austinites

But Austin officials say local governments have a better sense of what their constituents want and need, and that last year’s election made that preference manifest.

“I’m disappointed that the Legislature chose to nullify the bedrock principles of self-governance and limited government by imposing regulations on our city over the objection of Austin voters,” Austin Mayor Steve Adler said in a statement Wednesday. “Our city should be proud of how we filled the gap created when Uber and Lyft left, and we now must hope that they return ready to compete in a way that reflects Austin’s values.”

“The Legislature passed a deeply flawed bill that not only fails to protect the public, but prohibits cities from protecting their own citizens,” City Council Member Ann Kitchen said in the wake of the Senate vote. “Tying cities’ hands with no access to data from a company (Uber) under a federal criminal investigation for how they used people’s private data — and overriding the vote of Austinites — is an unbelievable attack on democracy.”

RELATED: City officials say criminal probe into Uber reaches Austin

Aside from Austin’s ordinance, Houston and Corpus Christi ride-hailing service laws also require fingerprinting of drivers, and Lyft has ceased to operate in those cities as well. Uber decided to stay in Houston despite its fingerprint mandate.

Wednesday’s Senate vote fell roughly on party lines, with Republicans in favor and Democrats against. However, Democratic Sens. Juan “Chuy” Hinojosa of McAllen and Eddie Lucio Jr. of Brownsville supported HB 100, while Republican Sen. Kel Seliger of Amarillo voted against it. The bill was approved in the House on April 20 on a 110-35 vote.