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Uber and Lyft are coming back to Austin

The Texas Senate passed a law that overruled the city’s ride-hailing regulations


The country’s two ride-hailing giants, Uber and Lyft, will be returning to Austin after the Texas state senate passed HB 100, which creates a statewide system of ride-hailing regulations that, in effect, overrules the city’s own standards.

The law’s passage ends a unique era in Austin transportation, which saw a group of ride-hailing startups fill the gap left when Uber and Lyft vacated the market last spring in protest over Austin’s laws governing the transportation network companies (or TNCs), including a rule that drivers needed to be fingerprinted by a third-party service as a security measure.

"I’m disappointed that the legislature chose to nullify the bedrock principles of self-governance and limited government by imposing regulations on our city over the objection of Austin voters,” Austin Mayor Steve Adler said in a statement. “Our city should be proud of how we filled the gap created when Uber and Lyft left, and we now must hope that they return ready to compete in a way that reflects Austin’s values."

The law, which was already passed in the Texas House of Representatives, will now be sent to the desk of Governor Greg Abbott. Since it passed with a two-thirds majority in both chambers of the legislature, according to state law, it can go into effect as soon as Gov. Abbott signs the bill.

The ride-hailing companies, of course, had a much different take on the news out of the Senate. Both have been pushing for statewide regulations to make it easier to operate across city and municipal boundaries; the nonprofit Texans for Public Justice says the companies has spent more than $2.3 million on an army of 40 lobbyists.

With the passage of HB 100, Texas becomes the 41st state with statewide ride-hailing regulations.

“Ridesharing in Texas took a tremendous step forward today,” said a Lyft spokesman in a statement released yesterday. “Thank you to Senator [Charles] Schwertner and Representative [Chris] 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.”

Uber, which has vowed to be back in Austin as soon as the Governor’s signature hits the bill, echoed the economic and consumer choice arguments.

“A statewide framework for ridesharing will help bring greater economic opportunity and expanded access to safe, reliable transportation options to more Texans,” said Sarfraz Maredia, General Manager for Uber Texas. “We look forward to making Uber available in more cities across Texas and continuing to serve drivers, riders, and the communities in which they live.”

In addition to adding another state to the list of those taking charge of regulating ride-hailing companies, the passage of HB 100 also reflects another growing legislative trend in statehouses across the nation: pre-emption of local laws. According to Joe Deshotel, a former communications manager with Ride Austin, a new nonprofit transportation network company (TNC) that formed after the big players left town, pre-emption of Austin’s liberal laws has become an increasing common move by more conservative state legislators.

The big losers may be the companies that came in to fill the gap, such as Ride Austin, a local startup, or Fasten, a Boston based company that made Austin its second major market after the two ride-hailing giants left town last spring. Based on its statement, Fasten is anything but resigned:

Many people are asking us what will happen to us when Uber and Lyft come back. That’s the wrong question. The right question is, “How will Uber and Lyft win back drivers and customers after leaving them high and dry last year?”

In passing HB 100, the legislature voted against public safety, equality and the rights of cities. In leaving the city last year, Uber and Lyft voted against their drivers and riders. Now, the citizens of Austin get to vote – with their dollars.