Austin, Texas Lawmakers Put Brakes on Uber

Published January 13, 2016

Lawmakers in Austin, Texas approved new regulations on peer-to-peer economy transportation network companies, such as Uber and Lyft.

Starting in February, the new city ordinance, signed into law by Mayor Steve Adler (D), restricts how many hours a transportation-network company (TNC) driver may work, and it requires them to submit to criminal background checks administered by the city’s police department.

‘Reams of Red Tape’

James Quintero, director of the Center for Local Governance at the Texas Public Policy Foundation, says such transportation regulations benefit cartels, not consumers.

“In addition to revolutionizing the way people travel, transportation networking companies like Uber and Lyft have reshaped the entire policy landscape by unleashing forces of creative destruction on legacy industries, like taxicab companies,” said Quintero. “To slow their advance, taxi cartels in certain cities have tried to use the levers of government to hoist reams of red tape on these TNCs.

“Uber and Lyft are uniquely challenged by big government because of the influential special interests that exist and seek to suffocate their competition with onerous and costly regulations,” Quintero said. “Each new local regulation means added costs for consumers, extra hoops to jump through for jobseekers, or both. This ultimately leads to an inferior product or an experience that’s less than it could be otherwise.”

Diktats and Decision-Making

Regulations such as the new Austin rules cost consumers both convenience and money, Quintero says.

“Excessive regulations stifle innovation, create extra costs for consumers and jobseekers, and make it hard for entrepreneurship,” Quintero said. “Government diktats are the more inferior option compared to free people operating in the free-market system responsible for their own decision-making.”

Austin City Councilwoman Ellen Troxclair (District 8) says lawmakers should protect consumers’ interests, not the advantages of government-mandated monopolies.

“It is important that we recognize the important role local governments can have in ensuring consumer safety,” Troxclair said. “I think we disrespect Austinites, however, when we close off choices, especially affordable and innovative choices, and keep people from being able to make decisions about their own transport and employment.”

Equal Playing Field

Troxclair says the regulatory burden on taxicab companies should be reduced, instead of making more regulations for taxicab companies’ competitors.

“In fact, perhaps it’s past time we allowed taxi companies a lifting of their regulatory burden, so they may better innovate and compete with these new arrivals,” Troxclair said. “When government picks favorites in the marketplace, employees, customers, and taxpayers all suffer. Choice is lessened, and those with close ties to regulatory authorities profit.

“A freer marketplace benefits everyone except those who wish to cull revenue from taxpayers for their political agenda,” said Troxclair.

Andy Torbett ([email protected]) writes from Atkinson, Maine.

Internet Info:

Molly Cohen and Arun Sundararajan, “Self-Regulation and Innovation in the Peer-to-Peer Sharing Economy,” University of Chicago Law Review: