Cities Watch as Texas Lege Seeks Rideshare Control

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Texas State Capitol building in Austin. Photo by Stuart Seeger.

Texas State Capitol building in Austin. Photo by Stuart Seeger.

As cities across the nation struggle to regulate rideshare, the Texas Legislature will take on HB 2440, a bill that would provide a statewide, blanket policy for ride-booking companies like Lyft and Uber that would require much less of drivers and rideshare companies than San Antonio's local ordinances.

The new law would intentionally override San Antonio's ordinance that went into effect April 1, at which time both Lyft and Uber ceased operation within city limits, but have continued in Bexar County and suburban cities. Lawmakers in the House Transportation Committee are hearing testimony from more than a dozen witnesses this and next week from rideshare company representatives, law enforcement, taxi industry representatives, and more.

Transportation network companies (TNCs) support the legislature, crafted by Reps. Chris Paddie (R-Marshall), John Kuempel (R-Seguin), and Lyle Larson (R-San Antonio), which – among other differences with the City ordinance – would not require a ten-point fingerprint background check or random drug testing.

Instead, TNCs would be responsible for third-party (or TNC-run) multi-jurisdictional criminal background check as well as a check against the national sex offender registry. As for alcohol/drug testing, the state would require none until a complaint was received and a positive result would mean suspension of the driver for two years. The law would also require only basic insurance to be provided by the driver or a TNC when the app is on but the driver has not been assigned a fare, unlike the $1 million policy required by the City.

"We've seen a patchwork quilt of regulations for ridesharing across Texas," stated Lyft spokesperson Chelsea Wilson in an email. "Some cities, like Austin and Dallas, have encouraged people-powered transportation to grow while others have made it nearly impossible for ridesharing to operate. Representative Paddie's bill is a common-sense approach to regulation that will provide clarity across the state while maintaining the highest level of public safety and expanding consumer choice."

In a sense, this is the legislation rideshare companies may have been waiting for – instead of continuing the fight at the local level where they have ceased operation – they've taken it to the state level.

Discussion in the Council's Public Safety Committee, executive sessions, citizens to be heard, and in Council chambers the city debate went on for months between the initial ordinance passed in December 2014 and formulating the current ordinance approved in March. And it continues as the rideshare controversy has become a key part of the May 9 mayoral election – candidates Mike Villarreal and Leticia Van de Putte have said they would rework the local ordinance to bring back Lyft and Uber. Tommy Adkisson stopped short of supporting an overhaul of the regulation while Mayor Ivy Taylor, running for a full-term, has stood firm on the existing ordinance.

“Local governments invest in infrastructure, law enforcement and regulations to keep people moving safely,” stated Ed Kargbo, President of Yellow Cab Austin in a news release. “Pre-empting local control by giving regulatory authority over some public transportation providers to the state is wasteful, duplicative and steps on local governments' rights to make and enforce their laws."

Yellow Cab is joined by countless traditional taxi and limousine companies in opposition to HB 2440 that claim the legislature would "put Texas passengers at risk" by not requiring the same safety and background checks all vehicle-for-hire drivers do.

“HB 2440 might as well have been written by Uber: no drug tests, fingerprint checks, commercial insurance or responsibility for serving the disabled community by its drivers,” said Kargbo. “It’s a sweetheart deal for big out-of-state taxi companies that compromise public safety and cities’ rights in Texas.”

The relaxed regulations from the state are just one of thousands of bills that the City of San Antonio is tracking through the Texas Legislature and dozens that – according to City leaders – take away local control.

City Council unanimously passed a motion brought by Councilmember Rey Saldaña on Thursday to have City staff draft a resolution that would highlight Council's opposition to legislation that takes authority away from cities and gives it to the state. Council will vote on the resolution – expected to pass – next Thursday.

In addition to the City's new rideshare rules, several of the bills have the potential to undermine local animal care policies, the non-discrimination ordinance, and payday loan regulations, to name a few.

Not all bills come with the specific preemption of local ordinances, said Jeff Coyle, director of the City's Intergovernmental Relations Department. For instance, the statewide texting bill only regulates texting – it doesn't prevent cities from taking it a step further – like San Antonio has – to require strict hands-free only operation of a mobile device while driving. Technically, it specifically allows for such City measures.

"Those are the kind of things we generally are okay with," he said, speaking to the City's stance on local control. "It's when it specifically preempts us – if it's weaker than what we do here – then we will oppose that because great effort is made locally to find the right level of regulation and ordinances for this community and we don't want the state to undermine that."

So, while several Council members support more relaxed regulations for rideshare – and would potentially welcome the state's regulation, they also are opposed to the state taking away power from cities. But, said Councilmember Ron Nirenberg (D8), "in the case of rideshare, this is, to me, a case of needing regulatory consistency. Would it be better if we could figure out the details of this (regulation) in the City of San Antonio? Yes. But the reality is insurance and other issues of public safety (that involves the Department of Motor Vehicles, background checks, Texas Department of Public Safety) are matters of state regulation ... this is the domain of the state."

Nirenberg strongly supports maintaining local control, he said, "in general, local authority is fundamental to the way that we govern ourselves."

But that doesn't mean we have to control everything.

"The fact that (HB 2440) advances what I believe to be is a better approach to regulating rideshare is a good byproduct," he said. "But I don't find it as inconsistent with our appeal to local control."

*Featured/top image: Texas State Capitol building in Austin. Photo by Stuart Seeger.

Related Stories:

Rideshare Heads to the Suburbs

Rideshare Revisions Pass: Uber Leaving Town, Lyft on ‘Pause’

Uber Rejects Proposed Rideshare Revisions

Commentary: Rideshare Should Get On Board with Existing Rules

6 thoughts on “Cities Watch as Texas Lege Seeks Rideshare Control

  1. The City of Houston is presenting evidence before the committee to show how Uber’s background checks are done by a 3rd party service and miss so many drivers with criminal backgrounds, numerous aliases, etc. Drivers the city would otherwise not grant a permit. Thorough background checks by the city should be mandatory for these services.

  2. You made an error: “The law would also require only basic insurance to be provided by the driver or a TNC when the app is on but the driver has not been assigned a fare, unlike the $1 million policy required by the City.”

    The City Ordinance was amended to only require the same level of coverage during that period (the app-on period) that taxis must have.

    Sec. 33-989. Insurance.

    (3) The insurance shall provide at least the following minimum coverage:
    a. During the period that a driver is logged into the TNC’s internetenabled
    application or digital platform as a driver, or is otherwise engaged
    in transportation network operations, but has not accepted a ride and is
    not providing transportation to a passenger, primary coverage in the
    amounts of not less than: death and bodily injury coverage of $50,000 per
    person; death and bodily injury coverage of $100,000 per accident; and
    property damage coverage of $25,000 per accident.

    The $1 million policy requirement is for when a fare is accepted and is equal to what the TNCs already carry so it doesn’t represent any burden what so ever.

    I’d like to point out here though that the state’s requirement effectively means ZERO coverage for that driver since any and all insurance providers will deny coverage of any claim involving a person driving while the app is on. USAA is starting a pilot program, but unlike Colorado’s law which requires insurance coverage during the “app-on” period, this law leave all of us in danger, just like that 6 year old girl in San Francisco who was struck and killed by an Uber driver during the “app-on” period and nobody is paying anything.

  3. My concern is for Yellow cab and white car cab drivers…. Even with background checks, some still feel unsafe. Many of those commercial drivers attitudes and lack of care is what is alarming. Never had the same experience Uber as with commercial over priced inconsiderate commercial taxis. People begin to panic when competition comes and takes away what others take for granted.

  4. With an army of 23 lobbyists, Uber and Lyft are spending up to 700,000 dollars to convince state legislators in Texas to override municipal ordinances, including those in San Antonio.

    Uber wants to conduct its own background checks on drivers and do away with mandatory fingerprinting. A Uber driver named Duncan Burton is an Houston jail right now accusing of raping a woman passenger. Burton was a convicted felon. Uber’s internal search did not catch Burton; a more stringent ordinance, like the one on the books now in San Antonio, would have caught monsters like Burton.

    Do we want to give up local control over city laws to state legislators swayed by Uber’s and Lyft’s swarm of lobbyists? The city’s amended rules for Uber and Lyft are fair and reasonable. The mayoral candidates, aside from Ivy Taylor, need to quit cozying up to Uber in order to look “progressive” and think more about the public safety of our local citizens.

    Do what is right, not what is trendy.

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