The ongoing struggle to figure out how to incorporate tech-based transportation entities like Uber and Lyft into the regulatory tapestry that governs similar businesses is one of the prominent challenges facing cities right now. Those companies clearly represent a growing marketplace demand, but they don’t fit within the framework that currently exists for the types of businesses that provide similar services. You need to buy a permit to drive a pedicab in Austin or a taxi in San Antonio or otherwise operate a transportation company, but Uber drivers just need to download an app and plug in some information.
That’s created a playing field that cab drivers have decried as unfair, while Uber argues that its network of drivers serve a fundamentally different role than traditional drivers. That argument was at the front of their letter to the San Antonio mayor and city council earlier this spring, when they argued that the regulations the city proposed were too intense:
To be clear, the majority of Uber partners drive a few hours a week and use their own vehicles (which are inspected by the state of Texas) to make extra income and provide for their families. They are veterans, spouses of active duty military, retirees, teachers, and single parents. Uber creates a marketplace where these people can use their own car to provide a ride to their neighbors when, where, and how often they want, a strong contrast to taxi, where multiple full-time drivers drive one car 24 hours / 7 days a week with high mileage and significant wear and tear with the majority of the profit going to the taxicab company. Simply put, there is virtually no comparison between taxis and TNCs [transportation network companies] that use “smart apps” to connect riders looking for transportation to drivers that provide transportation.
And what does the City of San Antonio have against veterans, active duty military spouses, retirees, teachers, and single parents, right?
The language may have been a bit manipulative, but the point stood: Uber sought a regulatory framework that treated their drivers very differently from cab drivers. And, in San Antonio, they didn’t get it.
San Antonio passed some of the more restrictive regulations on Uber in March, which included fingerprinting drivers and requiring them to submit to random drug tests, and charging the company fees to operate. Following that vote, Uber opted to cease operations in the city.
In most other cities, Uber’s response to regulations it didn’t like was to ignore them. In Austin, for example, after rival Lyft reached a deal with the city to serve the airport and Uber declined, the company was banned from operating out of Austin Bergstrom for the year-long duration of the deal. That went into effect during the high-demand time surrounding SXSW, however, and Uber’s drivers instead went to the airport and picked up passengers anyway, eventually resulting in a crisis that brought the city back to the negotiating table, with terms that both Lyft and Uber found acceptable. (The Austin American-Statesman characterized the move as “corporate civil disobedience,” a term that may prove handy in years to come.)
Transportation companies like Uber and Lyft operate throughout the state, minus the San Antonio exception—those needing a ride in Corpus Christi or Amarillo or El Paso or Waco or College Station can find one with the Uber app. Larger cities like Dallas and Houston have similarly negotiated ways for the services to operate despite outcry from cab drivers.
Now, however, the companies are seeking a much broader framework to operate not only in the above-mentioned cities but throughout the state. And Uber, at least, has enlisted their users to try to push the Legislature to do it.
Uber’s no stranger to imploring its customers to treat crafting a favorable regulatory framework as a civil rights issue—before leaving San Antonio, it gathered over seven thousand signatures in a petition—but this new push is its largest yet. The company seeks support for legislation introduced by Republican legislators Chris Paddie, John Kuempel, and Lyle Larson that would create a standard regulation for its operations (regarding imposing fees and requiring permits) throughout the state of Texas.
As part of the support-gathering for HB 2440, the company is sending emails to people who’ve signed up for the service with subject lines like “Sign the petition to keep Uber in Texas!” and urging anyone who’s ever taken a ride to add their name to the list.
So far, that list is over 92,000 names long (though signatories don’t need to be based in Texas to urge the Texas Legislature to pass the bill), and it makes a certain amount of sense: a standard framework for Uber across all of Texas certainly streamlines things for the company, and ensures that someone who needs a ride from the Greyhound station in Abilene can get one without having to wait for the local government to vote on it.
At the same time, the idea that it’s in the public’s best interest to have the ability to regulate companies like Uber stripped from municipalities is one that’s hard to fully justify. This business model is a relatively new one, and it’s unclear as of yet what the long-term impact on the transportation infrastructure will turn out to be. It’s possible that Uber and Lyft are the future, and even if they do drive the cab companies out of business, no one will miss them. It’s also possible that there may be an unforeseen impact on the market that would be best managed by an entity that’s more active than the part-time body that is the Texas Legislature.
Furthermore, it’s hard to say that what’s right for Abilene, when it comes to maintaining a regulatory framework for new, technology-based companies, is what’s right for San Antonio. The city government out by the Alamo may be in the pocket of Big Taxi, but if one city wants to take a slow, measured approach to dealing with massively disruptive business models, while others are more keen to embrace them wholeheartedly, it’s hard to see why exactly the Legislature needs to put a stop to that.
In other words, we’re very much in the experimental phase when it comes to Uber, Lyft, etc. It seems to make sense for those experiments to be confined to lower-stakes situations (i.e., one city rather than all of them), flexible regulatory bodies (i.e., a full-time city council rather than a legislature that meets for just a few months every other year), and a multitude of approaches to regulation to see what might be most effective, rather than rushing to a plan that the companies being regulated endorse so strongly that they’re suggesting their customers co-sign, or risk Uber leaving the state of Texas for good.
It’s unclear at the moment which way the wind is blowing on HB 2440, but laws that would restrict local governments in Texas from maintaining their own regulations—whether they involve plastic bag bans, fracking, polluters, or app-based transportation companies—have a certain amount of appeal in the Legislature right now. We’ll see how it shakes out—but so far, for the most part, what Uber wants, Uber gets.
