Do we need a statewide solution for Uber and Lyft?

Bill Hammond of the Texas Association of Business thinks so.


Fans of apps like Uber and Lyft may find that the rules governing their operations in one city differ dramatically from those in a community down the street or across the state. That not only creates unnecessary confusion for consumers and drivers who use the apps but also chills and complicates efforts to bring this new technology — or other similar innovations or services — to more Texans across the state. And in some instances, it has forced these companies to cease operations in cities where they were already providing safe rides.

I’ve long been a proponent of forging compromise and pioneering solutions for many of our state’s most vexing problems, and congested roadways are clearly high on that list. Transportation network companies are an important part of a larger effort to reform and transform the state’s transportation system.

That’s why it’s time we brought clarity and consistency to regulations governing these new technologies.


Texas boasts a long-running tradition of embracing public policy that encourages competition, increases consumer choice and expands economic opportunity. House Bill 2440 is consistent with this successful Texas model.


HB 2440 is a way for Texans’ locally elected state lawmakers to ensure that consistent, reasonable requirements and local concerns governing the technology are established and applied statewide.

We should embrace policy that creates clear standards for insurance and ensures that all current and future transportation network technologies fully protect drivers and riders. Background check requirements are extensive and clearly defined in the proposed legislation as well.

I noted HB2440 before, and wasn’t a fan of it then. I still think it should be within the discretion of cities to regulate transportation network companies as they see fit. That said, if this bill or another like it were to clarify some of the thorny insurance questions that have made the process of writing local ordinances that much harder, I’d support that. I get the urge to deal with this in the Legislature, but let’s take a more minimal approach first. Surely someone like Bill Hammond can appreciate that.

Or the Lege could maybe take up the issue of what constitutes minimal safety regulations, since stories like this don’t do much to enhance Uber’s reputation.

Duncan Eric Burton would not have been eligible for a city-issued permit to drive for Uber, a city official said Tuesday, because he had left prison less than three years earlier after serving 14 years on a felony drug charge.

But Burton, like an unspecified number of other drivers for the smartphone-app ride-sharing service, was working without a permit in January, when he allegedly sexually assaulted a passenger.

And Uber’s background check, which he passed, didn’t flag his federal conviction because it occurred more than seven years before he applied to drive for Uber; the company limits background checks for all crimes other than sex offenses to seven years.

The disclosure of Burton’s criminal record just a few days after he was charged with sexually assaulting a drunken passenger raised new questions about the company’s procedures and the city’s capacity to enforce regulations intended to ensure passengers’ safety.

The conviction here was for drug trafficking, not a sex crime, so one can’t really say that this driver was any more of a risk to passengers than anyone else. On the other hand, a “background check” that fails to reveal a 14-year stint in the federal clink doesn’t exactly inspire confidence. You may recall that Lyft left Houston rather than comply with the city-mandated background checks. More recently, Uber’s contention that San Antonio’s background check requirements were too onerous was one reason why they abandoned that city. I’m thinking this is a statement they’d like to have back.

The regulations adopted in December would have required drivers to pass a city-reviewed criminal background check, including fingerprinting, before getting a permit. The proposed changes would have allowed drivers to start operating once they pass the company’s background check, but still required them to pass the city background check within 14 days to get a full permit.

[Chris Nakutis, Uber’s general manager for Texas] said Uber partners with a third party to conduct background checks on people applying to become drivers and that it checks sex-offender registries and criminal databases. That should be sufficient, Nakutis contended.

Yeah, maybe not. And once again, we cannot escape the local control implications.

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.

The contrast between the demand for “states’ rights” and the push to subjugate cities to the will of the state government would be funny if it weren’t so infuriating. We’ll see if this approach, which as the Texas Monthly post notes includes a petition effort by Uber, gets anywhere.

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2 Responses to Do we need a statewide solution for Uber and Lyft?

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