Rideshare Regulations: a State or City's Responsibility?

A new bill in Texas could pass the regulatory matters of Lyft and similar companies over to the state.

by Kathryn Cargo, Victoria Advocate, Texas / May 15, 2017
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(TNS) -- A bill this Texas Legislature that passed the House recently could make it easier for ride-sharing companies to operate under state authority.

House Bill 100 sets statewide regulations for paid ride companies that connect registered drivers and interested riders by smartphone. This bill comes on the heels of the arrival of Lyft in Victoria in mid-March.

May 1, Victoria's City Council passed the first hearing of an ordinance that would permit Lyft to operate in Victoria. The council will vote on the ordinance for a planned final time Tuesday.

Under the city's proposed ordinance, Lyft would have to pay an operating fee of $750. Lyft drivers would only be able to book rides through the Lyft app and not sell or accept otherwise.

They also need to have a state-issued driver's license and proof of registration for their Lyft vehicle and must be at least 21 years old.

The drivers would need to have vehicle insurance and undergo background checks for any criminal or driving history.

Mayor Paul Polasek is optimistic HB 100 will become law, but with the city ordinance almost in place, Lyft can continue operating in Victoria should the bill not become law Sept. 1.

Pro: Operating throughout state would be easier for ride-sharing companies

Normally, Victoria Mayor Paul Polasek would be opposed to the city losing any form of control to the state, but it seems to make sense because of the way these ride-sharing programs operate.

It's easier for the state to regulate these companies because they operate in different cities that each have different regulations ride-sharing companies must follow, Polasek said.

House Bill 100, if passed, would put all the companies, like Lyft and Uber, under one umbrella, he said.

Lyft, which recently started operating in Victoria, lets the potential rider see the driver's rating and what kind of car they drive through the phone app, giving the consumer power, Polasek said.

"Because of the nature of the network, the consumer is in control with the app, so I don't see too much for us to be involved in regarding regulation," he said.

The bill would not affect taxi and limousine companies in Victoria, Polasek said, because the bill applies to ride-sharing companies that operate through smartphone apps.

The state would provide good oversight to companies like Lyft and Uber because it would manage them properly, said Brian Fontaine, owner of Affordable Taxi of Victoria.

"It can be very shady if it's not managed properly," he said. "People tend to think if they have a vehicle, they can call themselves a taxi and go make money."

Since these companies are not operating in every city, like Corpus Christi, those cities wouldn't be ready to regulate them, Fontaine said. If not regulated properly, these companies would become a large problem regarding safety.

This would also benefit these ride-sharing companies because the entire state would have the same law regarding them instead of different regulations for every city.

For the state to regulate companies like Lyft and Uber would be fair, said Victoria Lyft driver Mike Getter, 41.

Getter registered to become a Lyft driver in December 2016 because he figured it would eventually come to the city. He started operating as a driver at the end of March.

"There were only taxicabs here in town, and there's not enough to move the people around," he said. "Every rider I've had with Lyft has complained about the taxis, and they're happy that Lyft was here now."

Con: State regulations not strict enough

City governments would better regulate companies like Lyft and Uber because their officials understand the needs of their communities better, said Bob Constantine, Elegant Limousine and Charter of Victoria regional manager.

House Bill 100 would not require fingerprint background checks - only criminal background checks. Fingerprint checks apply to national records instead of only state.

"Uber and Lyft drivers have been known to be in conjunction with other criminal people," Constantine said.

Constantine said that the drivers could, for example, pick people up and take them to the airport, then tell their friends their customers aren't home and then their home would get robbed.

Another aspect of the bill that would cause a problem is that there would only be a state inspection for the vehicles, which would be very minimal, Constantine said. In cities like Houston and Austin, vehicles have to go through a city inspection to be part of a ride-for-hire service.

"If you're going to be a Lyft driver, you have to have a fire extinguisher in Houston," he said.

Under state regulation, Lyft and Uber would be unsafe, Constantine said. If under city regulations, they could be responsible.

"They could do fingerprint backgrounds on people," he said. "They should and could inspect the vehicles, even our vehicles."

Constantine also said state insurance requirements would be too minimal for these companies.

Cesar Hernandez, owner of Cesar's Taxi and Limousine, agrees with Constantine that each city has different needs and the state couldn't possibly know them for every community.

Hernandez gave the example of San Antonio where ride-for-hire vehicles have to meet certain conditions for operations and appearance. Tourism is a large economic benefit to of the city and why these rules are in place, he said.

Cities can do a better job of background checks on drivers than the state, Hernandez said. The state would have a hard time regulating that or paying for it.

"Some require a lot more, and some require a lot less," he said. "Sometimes their needs could be standard so the minimum would work, but others need more . The regulation of this type of transportation should be at the local level."

©2017 Victoria Advocate (Victoria, Texas) Distributed by Tribune Content Agency, LLC.