House approves bill that would overturn Austin’s local ride-hailing ordinance, prompting return of Uber and Lyft

Mikaela Cannizzo

The Texas House of Representatives approved a bill Wednesday that would invalidate Austin’s local ride-hailing ordinance, a move that could potentially prompt Uber and Lyft to return.

House Bill 100, authored primarily by state Rep. Chris Paddie, R-Marshall, strips cities of their authority to regulate certain ride-hailing companies. Instead, the bill proposes a statewide approach to regulating and licensing these companies. According to the bill, the new law would address transportation systems that operate through digital networks such as apps, and would not have any effect on taxis, carpools or limousine services.

Austin is one of 20 cities in Texas with local ride-hailing rules. Paddie said the bill would prevent disparities in driver requirements and operational standards among cities in Texas.

“This patchwork of ordinances demonstrates the need for a statewide regulatory framework that first and foremost works to ensure consumer safety, but also provides this growing industry with a regulatory certainty that will allow continued growth in this industry,” Paddie said during the House session Wednesday. 

Currently, 41 states have statewide laws pertaining to these transportation companies, and Paddie said his legislation pushes for Texas to join what has become standard practice across the country.  

Uber and Lyft decided to leave the city last May after voters supported regulations mandating these companies provide fingerprint-based background checks, rules put into place by the Austin City Council in
December 2015.

While HB 100 does not include a fingerprint requirement, companies would have to review driving records of potential drivers and complete background checks that include searches on the sex offender registry and criminal records.

Uber and Lyft representatives expressed support for the bill at a public hearing last month. 

Trevor Theunissen, Uber’s public affairs manager, said statewide regulation of services would better suit users who tend to travel between cities. He said drivers who use Uber to travel from one city to another — 26 percent of all Texas trips in 2016 — would be confused by the variances among city laws.

“Uber wishes to be in many more cities in Texas and our hope is that one day we can cover the entire state,” Theunissen said during the hearing. “The local regulations under which we currently operate vary as much as the Texas landscape and it presents unique challenges when it comes to moving people across multiple lines of jurisdiction.”

April Mims, senior public policy manager at Lyft, said she believes the bill expands transportation options for Texans through elimination of certain city rules that limit the number of drivers. 

“HB 100 provides the greatest opportunity for the most (ride-hailing companies) to compete in Texas, which will ultimately benefit the consumer,” Mims said during the hearing. 

Mayor Steve Adler said he believes ride-hailing operations are beneficial to the city and have the ability to lower DWI rates while providing opportunities for people to make extra money. However, Adler said he opposes the bill’s statewide approach at regulating these entities because it devalues local citizens’ rights to choose what is best for their city.

“The ability to have that measure of local guidance is important,” Adler said. 

While the House tentatively approved the bill by a 110-37 vote, it needs one more vote to officially pass out of the House and into the Senate. If signed by Governor Greg Abbott, the new law could go into effect as early as this summer.