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Thursday, May 18, 2017 by Caleb Pritchard

State Senate trumps Austin’s ride-hailing regulations

The Texas Legislature has cleared the road for Uber and Lyft to return to Austin on their own terms.

On Wednesday, the state Senate overwhelmingly approved House Bill 100 on second and third readings, sending the statewide ride-hailing regulations to Gov. Greg Abbott’s desk for his signature.

If Abbott signs it, as he is expected to do, the new law will preempt regulations City Council passed in December 2015 that both Uber and Lyft deemed too restrictive on transportation network companies such as themselves. Both claimed they found particularly onerous the fingerprint background check requirement for drivers.

In a May 2016 election, voters decisively shot down a referendum on rules favored by Uber and Lyft despite the two companies pouring more than $10 million into the campaign – a record-obliterating amount in the annals of Austin politics. Both tech giants ceased operations within city limits after that ignominious defeat.

“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,” Mayor Steve Adler said in a statement after the Senate’s vote. “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.”

Houston Mayor Sylvester Turner, in whose city Uber still operates despite it imposing even stricter TNC regulations than Austin’s, echoed Adler in a statement posted online, saying, “This is another example of the legislature circumventing local control to allow corporations to profit at the expense of public safety.”

Supporters of the bill held it up as a victory for limited government. The bill’s Senate author, Sen. Charles Schwertner (R-Georgetown), explained that it would make it easier for ride-hailing passengers who need to cross municipal boundaries.

“I think a statewide framework is the appropriate level to regulate in a minimal, consistent and conservative manner,” Schwertner said before the Senate took the second-reading vote on the bill.

HB 100 would still require TNCs to screen would-be drivers with criminal background checks, though fingerprints are no longer required. It also preserves Austin’s ban on picking up and dropping off passengers in travel lanes, so long as that ban also applies to non-TNC drivers.

According to several reports, both Uber and Lyft announced they will return to Austin as soon as the law takes effect, which thanks to the 21-9 third-reading vote is immediately upon Abbott’s signing it.

The return of the multibillion-dollar colossuses casts a shadow over the handful of upstarts that filled in the considerable vacuum Uber and Lyft’s departure created last year. On Wednesday evening in the RideAustin parking lot, CEO Andy Tryba rallied drivers and representatives from charities his nonprofit TNC helps support.

He pledged that new drivers seeking to use his app will continue to be fingerprinted.

Meanwhile, in his statement on the bill, Fasten CEO Kirill Evdakov suggested that Uber and Lyft only hurt themselves by burning public goodwill with the aggressive campaign tactics of 2016 followed by an arbitrary and punitive decision to pull out of the city.

Now that the Senate has nullified the results of a popular referendum, Evdakov said, “Austinites may not be able to overturn HB 100 legislatively, but they can make it irrelevant economically.”

This story has been changed since publication to clarify when statements were made. Photo by nrkbeta 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.

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

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