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Texas DMV Questions if Moving-Service App Complies with State Laws

Essentially an Uber for movers, Austin-based Burro received a letter from the department saying its operators needed to be registered with the state.

(TNS) -- The battle between mobile phone application-based businesses and state regulators fired up again last week, when the Texas Department of Motor Vehicles asked an Austin-based company that uses a mobile application as its platform to stop operating until its drivers prove they are complying with state laws.

On May 6, Burro, an Austin-based company that links local truck owners with people or stores in need of delivery or hauling services, received a letter from the department saying its operators needed to be registered with the state and asking its drivers to stop operating if they were not so registered.

“Anyone moving household goods in a pick-up truck or other type or size of vehicle for hire is required to register with the Texas Department of Motor Vehicles and show proof of insurance in the amounts required by law,” reads the letter from William P. Harbeson, the department’s director of enforcement.

That includes people moving a piece of furniture bought at a garage sale for pay, according to the letter.

Jason Ervin, co-founder of Burro, said the company has hired a lawyer and is trying to work out an agreement with the state that will let it continue operating. He told the tech website Pando Daily that Burro hopes to be back to normal operations next week after a few tweaks are made to the business model.

Until then, Burro is offering its services to customers for free and losing out on revenue until the problem is worked out, Ervin said.

Essentially an Uber for movers, Burro is part of the so-called “sharing economy” and works by connecting people in need of hauling or delivery services to one of their “laborers” through the app.

Once a client requests service on the app, the call is broadcast out to the company’s list of laborers who receive an alert on their phones.

“Have a truck and laborer in an hour or less,” the company’s website says. Transactions are handled through phones so cash isn’t needed or accepted.

Until now, Burro had advertised the lack of a license requirement as one of the advantages of working for them.

“You’re set! No commercial license required,” reads the company’s fourth step to becoming one of their “laborers.”

But in the letter, the Texas Department of Motor Vehicles said Burro’s drivers need to be registered and licensed to offer those services.

“A piece of furniture bought at a garage would qualify as a ‘household good,’” the letter reads, “and the person hired to transport that item from the point of sale to the purchaser’s residence must be registered as a household goods mover by the state of Texas.”

Ervin said the attempt to regulate the business was “ridiculous.”

“People do that all the time,” he told the American-Statesman. “If you knew a guy with a pickup truck and say, ‘Hey buddy, can you help me out with your truck and I’ll buy you a beer or something?’ It happens all the time.”

Ervin said Burro had not run into any regulation issues since it started operating its services in October and wondered why it is being singled out now when websites such as Craigslist had offered moving services in a similar way for years.

“You can go on Craigslist right now and there’s posts that say, ‘I’ll move your stuff,’” Ervin said. “Are you shutting Craigslist down?”

Uber and Lyft, the two most recognizable transportation network businesses based on mobile phone applications, have struggled with regulation in the past. The services were illegal in Austin until last October when a City Council ordinance allowed them to operate in the city.

In recent months, Uber and Lyft have cut short-term deals to operate at Austin-Bergstrom International Airport, where they faced tough opposition from taxi associations, who argue that the tech-based companies should have to pay the same fees as taxis for offering the same services.

Ervin said Burro’s problem is similar. The company already offers a bill of lading and $1 million insurance, in addition to whatever insurance the laborers already have.

But like Uber and Lyft drivers, Burro laborers set their own schedules and often only work on the platform to make extra cash. Requiring them to register and get a commercial license would be too complicated and could hurt Burro’s business model, Ervin said.

“It’s too much of a pain, and too costly to get every driver on the platform to register, especially when they’re guys who may be working only one day a week,” Ervin said.

Harbeson could not be reached for comment.

©2015 Austin American-Statesman, Texas. Distributed by Tribune Content Agency, LLC.