Austin, Texas, Regulates Ride Sharing

AUSTIN, Texas (CN) - Austin, Texas can enter agreements with ride-sharing companies such as Uber and Lyft, the City Council decided Thursday.

The ordinance allows the city to enter agreements with so-called Transportation Network Companies (TNCs).

The law defines TNCs as "transportation services that use an online-enabled application (app) or platform to connect passengers with drivers."

The City Council approved it after looking into "realistic alternatives to driving a personal vehicle."

"Many Austinites prefer or rely on modes of transportation other than their own private vehicle, including those who are not able to drive a car, those who choose not to own a car, and those who have been drinking and should not be behind the wheel," the ordinance states.

"Austin is in the midst of a drunken driving epidemic, with over 6,000 DWIs occurring in 2013 alone, fed in part by revelers' lack of transportation options late at night.

"Taxicab service in Austin is not consistently meeting the demand for a variety of reasons, including inefficiencies of the owner-operator system of our taxi franchises which prevent cabs from being directed to drive at certain times or places, having three individual dispatch systems, and having times of extreme peaks in demand for these services.

"Through smartphone technology, TNCs are able to be more responsive to meeting the needs of specific passengers, particularly with regard to wait time, and can also be more responsive overall to fluctuations in demand."

Uber and Lyft already had been operating in Austin, carrying thousands of riders a week without regulation. The City Council said this resulted in Austin "expending precious police resources by citing and impounding the vehicles of TNC drivers, taking resources away from such initiatives as arresting those who are driving while impaired."

TNCs will be required to carry a minimum of $1 million of commercial automobile liability insurance coverage for bodily injury and property damage. TNC drivers must pass criminal background checks, with no convictions within the past seven years for DUI, fraud, sex offenses, theft, reckless driving or gun-related violations. Drivers may not have had more than three moving violations within the previous three years.

TNCs must have a website, provide a 24-hour customer service phone number with email address, and have an Austin-based agent for service of process.

The ordinance provides other protections for riders.

"Before a TNC trip is accepted, a rider must be able to view the estimated compensation, suggested compensation, or indication that no-charge is required for the trip," the law states.

"A TNC must transmit an electronic receipt documenting the origin and destination of each TNC trip, and the total amount paid upon completion of each trip. ... A TNC app used to connect drivers to riders must display an accurate picture of drivers, and a picture or description of the type of vehicle, as well as the license plate number of the vehicle."

When TNCs use dynamic pricing to match a high demand for rides, it must be disclosed before a rider requests a ride, along with provision of a fare estimator.

"A TNC must maintain accurate records of all drivers providing service, and discontinued from providing service, through the platform. ... All information must be available for audit by a private, agreed-upon third party at any time, no more than four times per year.

"A TNC may not allow its drivers to refuse to accept a passenger who is disabled, or to charge a higher fare or additional fee to a person who is disabled, based on the person's disability, use of a support animal, wheelchair, crutches, or other mobility assistance device."

TNCs have 30 days to accept the provisions of the ordinance, which will be reviewed by the City Council within six months.

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