New Texas Rideshare Law a Victory for Uber and Lyft

AUSTIN, Texas (CN) — Texas Governor Greg Abbott signed into law Monday a bill that usurps local rideshare regulations, allowing Uber and Lyft to return to Austin and other Texas cities they had exited.

“Today I signed a law to overturn the City of Austin’s regulation that trampled freedom & free enterprise,” Abbott tweeted when he signed House Bill 100 on Monday.

HB 100 gives the state the power to regulate rideshare companies, also called transportation network companies, or TNCs. The bill calls for an occupational permit and also authorizes an annual fee.

The key text of the bill says: “[T]he regulation of transportation network companies, drivers logged in to a digital network, and vehicles used to provide digitally prearranged rides: (1) is an exclusive power and function of this state; and (2) may not be regulated by a municipality or other local entity, including by: (A) imposing a tax; (B) requiring an additional license or permit; (C) setting rates; (D) imposing operational or entry requirements; or (E) imposing other requirements.”

The bill requires a TNC like Uber and Lyft to conduct annual criminal background checks on its drivers, but it does not have a fingerprint requirement that Austin mandated.

The law took effect immediately upon Abbott’s signing, meaning Uber and Lyft could reboot their operations in Austin on Memorial Day.

Uber said in a statement: “We’re sorry, Austin—for leaving the way we did; for letting an honest disagreement about regulations and consumer choice turn into a public fight; and most of all, for not being able to serve you for the last year. It was never our intention, but we let down drivers, riders, and the broader Austin community. We’ve spent the last year listening carefully and learning from the mistakes we made. While we can’t change how we got here, we can and will commit to getting it right this time around.”

On Monday, Lyft sent emails to customers announcing it was once again operating in Austin.

“Lyft is back in Austin. Reliable, affordable rides have returned to Austin. Whether you’re headed to Zilker Park, Rainey Street, or the airport, we’ve got your ride,” the message said.

Both Uber and Lyft left Austin a year ago over a dispute centered on the city’s mandatory fingerprint-based background checks. Uber and Lyft claimed Austin’s background checks were no better than their own name-based background checks for drivers.

Austin voters rejected an ordinance, called Proposition 1, which would have repealed the city’s TNC regulations. The ordinance failed despite millions of dollars spent by Ridesharing Works for Austin, a political action committee funded by Uber and Lyft in support of Prop 1.

The departures of Uber and Lyft led to a plethora of new rideshare companies operating in Austin. These TNCs agreed to implement the city’s fingerprint requirement for drivers. RideAustin, a local nonprofit TNC, provided 2 million trips in its first year of operation.

RideAustin never took issue with the city’s fingerprint requirements. “We’ve always put the safety of our riders at the top of priorities, every driver is finger print verified,” the company said in a tweet.

In a statement about the return of Uber and Lyft, the Austin Transportation Department said, “Transportation Network Companies have always been welcome in Austin so long as they follow the laws applicable to their operation. The Transportation Department’s focus has always been to do our best to ensure safe transportation options for the Austin community and we will continue to concentrate on that mission.”

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