Voters in Austin, Texas rejected a ballot initiative proposing to roll back the city’s tough regulations on popular peer-to-peer economy transportation network companies (TNC) connecting drivers and riders, such as Uber.
In 2014, the Austin City Council enacted a temporary ordinance allowing individuals to use those services until more permanent regulations were crafted. In December 2015, the Austin City Council passed an ordinance governing TNC operations in the city, requiring drivers to be fingerprinted and researched by police and imposing a 1 percent tax on all revenue the drivers collect.
In February 2016, when the ordinance took effect, Austin residents collected 65,103 signatures on petitions asking the city council to roll back the ordinance. City lawmakers voted to place the issue before voters for an early May vote. Residents voted 56 percent to 49 percent to reject the proposal.
Following the vote, popular TNCs Uber and Lyft suspended all operations in the city.
Making Competition More Difficult
Austin City Councilwoman Ellen Troxclair says taxicab companies around the country are capturing local lawmakers and tilting the playing field in their favor.
“I think taxicab companies in other cities have been kind of successful in using [lawmakers] as a tool to push out their competition,” Troxclair said.
Troxclair says taxicab companies’ regulatory wins result in losses for consumers.
“People are stranded downtown,” Troxclair said. “There’s a huge crisis, a huge void, a huge vacuum in our city for rideshare services.
“Some smaller companies are trying to ramp up operations as quickly as possible,” Troxclair said. “The incredibly ironic thing is that in the city’s desperation to try to fill the void that Uber and Lyft left, the city is bending over backwards to assist these smaller companies by hosting job fairs [and] putting up city-funded hotlines telling drivers to call these other companies.”
Regulating Competitors Out of Business
James Quintero, director of the Texas Public Policy Foundation’s Center for Local Governance, says taxicab companies influence lawmakers to use regulations to hamstring more-efficient and cheaper transportation services.
“To make themselves more competitive, they have basically forced very duplicative and costly regulations on these other companies to drive up the price point,” Quintero said. “They do it by foisting reams of red tape on these very innovative companies that offer services that people want but are a threat to their business model.”
‘Antithetical’ to Texas Values
Quintero says taxicab companies’ war against innovation doesn’t represent common Texas values.
“You look around the landscape and you see this special-interest influence replicated in a lot of areas,” Quintero said. “It’s becoming very problematic, because it’s very antithetical to what Texas is and what Texas aspires to be.
“To Uber’s credit, and Lyft as well, these companies have taken an aggressive posture when it comes to onerous regulations,” Quintero said. “They’ve pulled out of Midland, Galveston, Corpus Christi. They just threatened to pull out of Houston. It all has to do with the very costly and onerous regulatory structure that these cities threaten to impose on these businesses.”
Danedri Herbert ([email protected]) writes from Kansas City, Kansas.