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Thursday, April 20, 2017 by Caleb Pritchard

House sets the table for Uber and Lyft’s return to Austin

Uber and Lyft’s self-imposed exile from Austin could be nearing the beginning of the end.

On Wednesday, the Texas House of Representatives voted to approve House Bill 100 on a crucial second reading. The bill would create a statewide regulatory framework for transportation network companies and preempt local rules overwhelmingly upheld by Austin voters last May.

Ridehailing giants Uber and Lyft plowed more than $10 million (and a small forest worth of mailers) into a special election to overturn those rules, which included mandatory fingerprint background checks for all TNC drivers. When 56 percent of voters rejected that referendum, both corporations pulled out of the city.

Now, nearly a year later, state lawmakers are close to doing what the Silicon Valley darlings could not.

According to the unofficial House count, 110 state representatives voted for HB 100, whose author, state Rep. Chris Paddie (R-Marshall), managed to secure a bipartisan slate of joint and coauthors. The list of ayes also included 25 Democrats.

Paddie repeatedly pointed out that 41 other states have regulations that do not include fingerprint background checks. His bill would require TNCs to register with the Texas Department of Licensing and Regulation and pay a $5,000 annual fee. Drivers must be 18 years old, have a valid license and proof of registration and insurance, and pass a criminal background check.

As for enforcement, if any TNC is determined to have violated any section of the law, the state could suspend or revoke its operating permit.

Also within the bill is language that explicitly defines TNC drivers as independent contractors rather than employees. That distinction is crucial to the companies’ business models since it frees them from providing costly benefits.

Throughout the late morning and for much of the afternoon, Paddie defended his bill against a flurry of amendments and questions about public safety, many offered by members the Austin delegation, including state Reps. Celia Israel, Gina Hinojosa and Eddie Rodriguez.

“Let’s be clear here, we all care about safety, as we ourselves ride and our loved ones ride in some of these transportation options,” Paddie assured his colleagues.

Israel succeeded in changing the bill to require that TNCs retain passenger and trip date for five years, up from the original one year. She argued that the data should be preserved for investigatory purposes in potential sexual assault cases in which the victims hesitate to come forward.

That one victory aside, Israel was unable to restore operator fees to cities. The delegation also failed in an attempt to require trip data be shared with public entities.

In a statement sent to the Austin Monitor after the vote, Israel said, “If this bill passes into law, we will have neither fees nor trip data going to help cities offset the costs of road maintenance or help transportation engineers plan for the future. I wanted to vote for a much improved bill, but industry interests were intractable. There was no room for negotiation, which is unfortunate and not how we normally do business in the Texas House.”

Another longshot amendment offered by Hinojosa would have preserved regulations enacted in a response to a public vote – i.e., Austin’s regulations. That effort was swiftly tabled.

State Rep. Dustin Burrows (R-Lubbock) was able to strike from the bill a requirement that would have forbidden TNC drivers from soliciting or accepting cash. State Rep. Chris Turner (D-Arlington) defended Burrows’ amendment by noting that many residents in his district lack access to personal vehicles, public transit and credit cards. Paddie suggested that those residents could still use taxi cabs, which Turner retorted are largely unreliable in Arlington.

After further wrangling, the House approved HB 100 on a 110-37 vote. Two members were absent, and Speaker Joe Straus (R-San Antonio) did not vote. The bill will advance to third reading, which is generally a formality in the Texas House.

On Wednesday evening, Council Member Ellen Troxclair, whose District 8 voted in favor last year’s ride-hailing referendum, labeled HB 100 “a reasonable regulatory framework with broad, bipartisan support.” She told the Monitor, “I think the inherent nature of ridesharing services is that they constantly cross municipal boundaries, so having a statewide framework makes sense, and I think ultimately having a predictable regulatory environment will drive competition which will mean better service for drivers and riders alike.”

Troxclair’s colleague, Council Member Ann Kitchen, was less pleased with the result. Kitchen chairs the Council Mobility Committee and was targeted by Uber and Lyft as the author of the regulations that ultimately scared them off.

“It’s very concerning to me that we’re now living in a state where people can vote on what they want in their own community and have elected officials who live in other parts of the state tell them what they can and can’t do,” Kitchen said.

Kitchen’s statement was echoed by RideAustin CEO Andy Tryba. His nonprofit company was one of several that cropped up to fill the vacuum created by the departure of Uber and Lyft.

In a statement, Tryba said, “While we respect the State Legislature’s ability to overrule Austin voters – we believe the local Austin community is the best to set local Austin rules. In any scenario – we believe that RideAustin represents the local community values and will continue to be embraced by the local community.”

Representatives from Uber and Lyft did not respond to requests for comment.

Despite the fact that HB 100 has all but passed the House, there is no guarantee that it will become law. Two state senators have filed their own versions of statewide TNC regulations that are still working their way through the upper chamber.

Photo by Phil Roeder made available through a Creative Commons license.

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Key Players & Topics In This Article

Texas Legislature: The state’s legislative governing body composed of the House and Senate.

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Transportation Network Companies: Companies that provide transportation services through applications such as Uber or Lyft.

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