As Texas lawmakers consider filing legislation next year related to ride-hailing companies, they learned Tuesday that more than 30 states have passed laws calling for some level of regulation of companies like Uber and Lyft.
A report presented by Texas A&M University's Transportation Institute analyzed state and municipal regulations since 2012. It found that 24 states passed legislation requiring ride-hailing apps, sometimes referred to as transportation network companies, must apply for a state permit before operating. The report also found that 30 states require background checks on the driver before or a specific amount of time after the driver begins working.
“Transportation network companies have expanded rapidly to cities worldwide,” Ginger Goodin, a senior research engineer and director at the institute, told House Transportation Committee members at a hearing Tuesday. “However, they do not fit neatly within our current regulatory schemes.”
Although committee members didn’t discuss future bills at the hearing, it’s no secret a handful of lawmakers have plans to draft legislation for the 2017 session, which starts in January.
After a May vote in Austin failed to pass a proposal backed by ride-hailing companies, state Sen. Don Huffines, R-Dallas, called for further deregulation when it comes to the companies. Sen. Charles Schwertner, R-Georgetown, said he was considering drafting legislation that would affect ride-hailing companies.
At Tuesday's hearing, state Rep. Chris Paddie, R-Marshall, said the Legislature should stray from telling business specifically how to operate, such as giving riders a fee estimate before they accept a ride on their smartphone.
“We need to allow the market to work,” Paddie said. “They’re going to react to the consumer, or they’re going to die.”
In 2015, lawmakers passed House Bill 1733, which establishes minimum automobile liability coverage for drivers operating a car for one of the companies.
Uber and Lyft suspended operations in Austin following the May election, which upheld city regulations requiring ride-hailing drivers to undergo fingerprint-based background checks.
Since then, a handful of ride-hailing companies have surfaced in the city to fill the gap. Uber and Lyft have left three other Texas cities – Corpus Christi, Galveston and Houston – because of similar disputes between transportation network companies and cities, according to the report. Houston is the only city the companies have returned to following negotiations.
According to Goodin, there is no statewide policy in the country that requires fingerprint-based background checks. The group did not look into the number of municipalities that require those checks.
“There are many questions and unknowns,” Goodin said. The institute expects to continue to research the ride-hailing companies in the future.
The committee also heard an analysis from the Texas Department of Transportation on the state's toll roads.
According to the department’s executive director, James Bass, 9 million toll tags have been issued in the state, which has more than 700 toll roads. It would cost the state $24 billion to retire toll-related debt, according to Bass, but “the state is not financially liable for any of the debt.”
Rep. Joe Pickett, D-El Paso, the committee's chairman, voiced his concern at the meeting, saying he thinks toll projects sometimes “exacerbate congestion” and become difficult to remove because they are part of a larger road system.
"We have put a lion's share into toll projects,” he said.
Read more coverage about ride-hailing companies in Texas:
- Republican state Rep. Jason Isaac has asked the Federal Trade Commission to investigate Austin's rules for ride-hailing companies, raising concerns that the city's "burdensome regulations" are anti-competitive.
- State lawmakers are poised to discuss ride-hailing for the second time in two weeks on Thursday, attention many expect to carry into the upcoming legislative session as some legislators attempt to wrest regulatory power from cities.
- Less than a month after Uber and Lyft left Austin over the city's regulations, at least six new companies offering similar services have launched in the city and are fighting for market share.
Disclosure: Uber, Lyft and the Texas A&M University System have been financial supporters of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.
- Texas A&M Transportation Institute Report (1.1 MB) DOWNLOAD