Paddie's Lyft-for-Hire Bill Runs Uber Cities

An East Texas lawmaker has filed a bill that would undo efforts by several cities to regulate vehicle-for-hire apps Uber and Lyft and transfer regulation of the services to the state Department of Motor Vehicles.

House Bill 2440 from state Rep. Chris Paddie, R-Marshall, would grant firms like Uber and Lyft statewide operating permits if they pay an annual $5,000 fee and follow various rules. In some cases, such as background checks conducted on drivers, Paddie’s bill would be less rigorous than ordinances approved in some Texas cities.

Paddie described his proposal as allowing “innovative technology companies such as Uber and Lyft to operate under predictable, sensible statewide regulations."

“As Republicans, we talk a lot about free market principles,” Paddie wrote Friday on Facebook. “This bill enacts those principles and will ultimately empower you, the consumer.”

The bill is the latest example of battles emerging this session between the state and cities over the definition of “local control.” Over the past year, nearly a dozen Texas cities have grappled with balancing long-standing regulation of traditional taxi companies with fast-growing firms that connect people with freelance taxi drivers using their personal vehicles and adjusting fares based on demand.

Uber and Lyft are active in Arlington, Austin, Corpus Christi, Dallas, Fort Worth and San Antonio, according to their websites. Uber is also active in Amarillo, El Paso, Houston and Lubbock. In several cities, Uber and Lyft drivers have been ticketed for operating illegal taxis.

Local efforts to bring drivers of vehicle-for-hire apps into compliance with city rules have been mixed. Traditional cab firms like Yellow Cab have argued that cities create an unfair playing field if they allow companies like Uber or Lyft to operate while maintaining current regulations for traditional cabs, which often include strict rules on fares and requiring some wheelchair-accessible vehicles.

Some have also questioned whether companies like Uber might ultimately put traditional cab companies out of business, shutting out people who can’t use vehicle-for-hire apps because they don’t own a smartphone or have a credit card.

"The underserved communities will not get serviced," said John Bouloubasis, president of Yellow Cab, which operates in several Texas cities including Austin, Houston and San Antonio.

Paddie’s bill is likely to be at the center of an intense political fight this session. Uber and Lyft have collectively hired nearly 30 lobbyists to tackle their issues in the Legislature, according to state records. Traditional taxi firms like Yellow Cab and Texas Taxi have also retained lobbyists for the session. 

Paddie has not received any donations from Uber or Lyft, but is a frequent user of Uber, according to his campaign finance reports.

Uber and Lyft have argued that they should be treated like technology companies, not taxi providers, and that their handling of issues like driver background checks and liability insurance is sufficient.

“We applaud Rep. Paddie for introducing a statewide bill that protects riders, increases transportation options, expands economic opportunity and ensures Uber has a permanent home in Texas,” Uber spokeswoman Debbee Hancock said.

This week, both Uber and Lyft announced plans to end their services in San Antonio because of a new ordinance requiring all drivers to pass a city-reviewed background check, including fingerprinting. Paddie’s bill would allow the companies to continue using third-party background screeners and not require fingerprinting.        

“The state Legislature needs to understand this isn’t about hampering free enterprise or innovation,” Bouloubasis said. “Trying to water down public safety is not a good operating platform for anybody.”

Disclosure: Uber Technologies is a corporate sponsor of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.