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Thursday, May 18, 2017

Uber Plans Its Triumphant Return to Austin

Texas is paving the way for Uber and Lyft to return to Austin.

Almost exactly a year after both Lyft and Uber chose to stop servicing Austin, Texas, new legislation passed at the state level that may signal their imminent return to the area.

The new laws nullify the city restrictions that have kept Uber and Lyft out of Austin.

After passing both the state House and Senate, House Bill 100 will soon be making its way to Governor Greg Abbott’s desk, where he is expected to sign the legislation, officially placing the regulation of the ridesharing sector in the hands of the Texas Department of Licensing and Regulation.

One of the bill’s sponsors, Sen. Charles Schwertner, spoke on the Senate floor on Wednesday expressing that his primary goal in sponsoring the bill was to put the success or failure of ridesharing companies in the hands of the market and not the government.

While this would still give the state of Texas the power to pass regulations on the industry, it will nullify city restrictions like those that have kept Uber and Lyft from giving rides in Austin.

The Cronies Strike Back

The ridesharing sector has faced a constant uphill battle when it comes to justifying its existence to the state. While the popularity of ridesharing has proven that consumers prefer using their smartphones to hail a ride rather than attempting to flag down a cab that may or may not choose to ignore them, the taxi industry has been less than pleased with this unexpected competition.

In an act of protest, both Lyft and Uber left the city of Austin.But instead of adjusting its model to be more compatible with our modern, technology-reliant society, the cab companies have sought to use the state’s power to create a monopoly in the market. Claiming that ridesharing endangers riders, these cronies have launched national campaigns aimed at scaring consumers from utilizing apps like Uber and Lyft.

Unfortunately, these scare tactics worked on residents of Austin, who voted in favor of harsher restrictions and screening processes for ridesharing drivers.

Part of the ridesharing model, especially for Uber, is signing up new drivers quickly so that it can meet the market demand for its services. Under Austin’s year-old regulations, the process was greatly inhibited and created a financial burden to these companies. In an act of protest, both Lyft and Uber decided to stop serving the city of Austin until the new restrictions were amended.

The ideal solution: a law that abolishes the potential for any future regulations on the market. 

Shortly after Uber and Lyft left and before new ridesharing companies—all too willing to capitulate to the state—entered the Austin market, the number of drunk driving arrests skyrocketed, showing just how integral ridesharing has been in encouraging safe driving practices.

However, while Austin’s citywide restrictions caused two of the biggest names in the ridesharing market to leave, Uber continued to service the area with its Uber Eats app, which does not have to abide by the new screening regulations since there are no passengers actually riding in the car with drivers, who simply deliver to-go food orders to their patrons.

The Freedom to Ride

Lyft spokesperson Chelsea Harrison issued a statement after the bill passed the Senate saying:

“Ridesharing in Texas took a tremendous step forward today. Thank you to Senator Schwertner and Representative Paddie for defending consumer choice and all the stakeholders who have helped create safer roads and expand reliable, affordable rides for Texans. On behalf of the entire ridesharing community, thank you to all of the legislative champions who have helped guide this bill through the Capitol.”

If signed, the new statutes will go into effect in September, but that doesn’t necessarily mean those in need of a ride in Austin will have to wait quite that long to use either company again. Both Uber and Lyft are no strangers to participating in a little civil disobedience as both have ignored unjust city restrictions that inhibit the market from operating free from government interference.

While the ideal solution to the ridesharing sector vs. the cab companies debate would be a law that abolishes the potential for any future regulations on the sector, Texas is at least making steps to protect some semblance of a laissez-faire model within the state.

  • Brittany is a writer for the Pacific Legal Foundation. She is a co-host of “The Way The World Works,” a Tuttle Twins podcast for families.