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Texas Senator Proposes State-wide Rideshare Regulations

Texas Senator Proposes State-wide Rideshare Regulations

At the start of the 2017 Legislative Session in the Texas State legislature today, State Senator Charles Schwertner, a republican from Georgetown, filed Senate Bill 176, which lays out specific, statewide ride-hailing regulations for TNC rideshare companies like Uber, Lyft and Fasten. Today is the first day of the session and many bills gets filed with the Senate to be discussed during the legislative session. The first day to discuss these bills won’t be until January in Austin.

As most drivers know, Uber and Lyft voluntarily left Austin earlier this year over the fingerprinting. The fingerprinting law wouldn’t go into effect until months after they left and there was a generous lead-in period for the law. Uber and Lyft decided to leave anyway in protest over the law. In the past, this type of tactic has worked to pressure lawmakers to amend current laws so that Lyft and Uber would come back to their city. This time around, a slew of companies rushed in when Lyft and Uber decided to shut down. Fasten eventually won the war and now has about a 90% market share in Austin. This is mainly due to their application flow and ease of use. You can read more about Fasten in Austin in my below article:

Texas Senator Proposes State-wide Rideshare Regulations

Texas Senate Bill 176 proposes state wide rideshare (or ride-hailing) legislation over TNC companies such as Uber, Lyft and Fasten. This law will supersede any law on a local level. This bill may allow Uber and Lyft to operate in Austin as early as next year.

Here is my summary of Senate Bil 176:

What Does This All Mean?

If you see the second line of the above summary, it removes the power to regulate rideshare companies on a local or city level and puts it solely in the hands of the state. It also removes a requirement to get a local rideshare permit in every city or county, which will open the door for rideshare companies to operate anywhere in Texas. This is a similar move that occurred in Pennsylvania where the state legislature passed a state-wide rideshare regulations that allowed Uber and Lyft to operate anywhere in the state. Previously, it was banned in Philadelphia by the local utility commission. Similar statewide measures are being proposed in Massachusetts, despite not having a regulatory problem in Boston and the surrounding areas.

One key omission in the proposed state bill is the requirement of fingerprinting, which Uber and Lyft was vehemently against. They consider it to be too much a financial burden on drivers. Initially, this was the case. It was complicated to get fingerprinted and many forms were required to be filled out in person. However, local resources ramped up to match the legislation in Austin. There are now many locations to get fingerprinted and it is now all digital, similar to the machines used for Global Entry. Most forms are also online. All of these changes has drastically reduced the time needed to get fingerprinted. Once you are fingerprinted, you will get an official ID to drive for various TNC companies in Austin. This means you won’t need to get fingerprinted again if you want to work for another company. The one downside is that the fingerprint is only valid for a year.

When this bill gets approved, Austin will no longer be able to regulate rideshare (TNC) companies on a local level, which may bring back Uber and Lyft in Austin. The one big caveat is that this is only a proposed bill in the Senate. This bill will need to pass the Senate and the House in Texas. This bill will most likely go through numerous changes as it goes through the Senate and House. We will have to see if fingerprinting will end up in the final state-wide legislature. If it ends up in the statewide legislature, Uber and Lyft will have no choice but comply with the regulations. If they pull out of Texas, Fasten will have much more territory and will begin to pose a significant threat to both Uber and Lyft nationwide.

With so much infrastructure set up to perform fingerprinting in Austin, it could be used as a model for the rest of the state if the Texas TNC rideshare legislation includes fingerprinting. Austin has shown the rest of the state, and the country, that fingerprinting regulation is not burdensome and can easily be implemented. We will need to see if it ends up on the state regulation next year.

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