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Uber, Lyft Back in House Headlights

Another round of sparring between Texas cities and car service companies Lyft and Uber played out on Tuesday, when a panel of Texas lawmakers considered letting cities regulate Lyft and Uber the same way they regulate cab companies.

Uber and Lyft, two San Francisco-based transportation networking companies, have launched services in several Texas cities.

Another round of sparring between Texas cities and car service companies like Lyft and Uber played out on Tuesday before a panel of Texas lawmakers. The proposal that was debated — which would let cities regulate Lyft and Uber the same way they regulate traditional taxi companies — would have the opposite effect as a bill another House committee considered last week to strip cities of that authority.

The House Urban Affairs Committee heard public testimony on House Bill 3358 by state Rep. Eddie Lucio III, D-Brownsville, which gives cities oversight of all commercial transportation services, expanding their control of taxicab and limousine services to include transportation network companies like Lyft and Uber.

“This bill is about fairness — period,” Lucio said. “If they’re going to provide the exact same service, whether it’s on a part-time basis or not, it should be done fairly.”

The companies use smartphone apps to connect people seeking a ride with freelance drivers who drive their own vehicles and set their own schedules. Ride fares are based on demand — customers pay higher rates during peak hours when more users are requesting rides. 

Lucio’s father, state Sen. Eddie Lucio Jr., D-Brownsville, has filed an identical bill in the Senate.

Last week, the House Transportation Committee considered an opposing measure to give that authority to the state — effectively leaving it up to Lyft and Uber to perform their own background checks and set their own prices.

Representatives for both companies criticized Lucio’s bill, saying a patchwork of unique city regulations would stifle their innovative business model.

April Mims, public policy manager for Lyft, said applying taxi regulations to transportation network companies was “forcing a square peg into a round hole.”

But traditional cab companies, whose business practices are highly regulated by cities, argue that Lyft and Uber should have to play by the same rules as everyone else. 

Ed Kargbo, president of Yellow Cab Austin, said allowing Lyft and Uber drivers to operate without city background checks was like allowing doctors or lawyers to practice without a degree just because they work part time.

The debate has focused on public safety recently, following news that an Uber driver in Houston charged with sexually assaulting a passenger had been driving for Uber without a city permit — and without passing a city background check that would have turned up his criminal record.

Lyft and Uber have clashed with Texas cities like Houston and San Antonio over allowing the companies to conduct their own driver background checks. After San Antonio’s city council issued an ordinance allowing the city to oversee driver background checks and requiring extra measures like fingerprinting, both companies said they would cease operations in the city. 

Lucio told Mims that she was being disingenuous when she said Lyft was safer than a taxi service.

“I take exception with you saying ‘safer,’” Lucio said.

State Rep. Matt Schaefer, R-Tyler, also grilled several witnesses, making the case that government oversight was not necessary because the free market would weed out unsafe companies.

The bill was left pending by the committee.

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

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