Preview: Ridesharing at Austin City Council

Austin City Council is slated to take up the city staff’s recommendations on ridesharing as soon as early August. (See my previous posts on this subject here, herehere and here.) I did a quick search a week or so ago, found and read the staff’s report. The key recommendation is that the City Council refrain from allowing such services to operate unless they follow current regulations or partner with an already-licensed company. These are probably the most important four paragraphs of the report. I’ve highlighted some choice nuggets:

Staff believes that it continues to be in the City of Austin’s and citizens’ best interest that the City regulates the vehicle-for-hire industry. Staff recommends clarifying the definition of vehicles-for-hire, including the definition of compensation, tips, and fares so that citizens can clearly differentiate between vehicles-for-hire and car/vanpool activities. Staff believes that it is in the interest of the City to manage and regulate the industry for purposes of public safety and to assure that a base level of mobility is provided by the industry to all parts of the community regardless of time, geographic location, or circumstance. Further, it is staff’s best recommendation that all rideshare activities either fall into the definition of car/vanpool or vehicles-for-hire. The introduction of smart-phone enabled rideshare (SPER) applications to assist in either matching like-trips or in the solicitation of customers is demonstrated by both car/vanpool operations and by licensed vehicles-for-hire within Austin. Thus, the issue is not one of a new technology creating a “third space” for ridesharing, rather the question is can citizens reasonably differentiate between a legitimate car/vanpool activity and that provided by licensed vehicle-for-hire providers in Austin.

Staff believes that these two services (car/vanpool or licensed vehicles-for-hire) represent the full spectrum of ridesharing activities possible and that smart phone enabled rideshare (SPER) applications either facilitate legitimate car/vanpool activities where compensation is on the basis of trip cost (now legal under City Code); or they are serving as dispatch for a vehicle-for-hire activity, that if not licensed through a taxi franchise or operating authority, is illegal.

In other words, as soon as a passenger and driver’s individual trips lose a commonality of purpose, they potentially cease to be a car/vanpool and begin to take on the characteristics of a chauffeured trip. As soon as a passenger is encouraged or enabled to over-pay for a trip (i.e., provide profit), tip for the quality of the trip, or compensate a driver for more than what the actual trip costs, then the passenger becomes a customer and the driver a taxi driver. Thus the question is not one of technology creating a new type of ridesharing but rather one of a legal or illegal business transaction as defined in City of Austin Code, Chapter 13-2, Vehicles-for-hire.

Staff recommends that the franchise and licensing requirements for vehicles-for-hire, including franchise requirements, be maintained to assure the safety of the traveling public. Further, staff recommends that new technologies be required to work within current City Code, either promoting car/vanpools as defined previously or obtain a franchise license (or alternatively operate under a current franchise license holder).

You should read the full report as it gives definitions of ridesharing, vanpooling, vehicles-for-hire and other forms of shared transportation as well as a more detailed explanation of the reasons for limiting services like SideCar, Uber, et al. It shows that Austin Police Department’s infrequent enforcement (while admittedly a super-small sample but reasonable given limited enforcement mechanisms) has found the majority of the drivers using unregulated smartphone apps are unlicensed and/or uninsured. One was even a parole violator with an alcohol detection device in his car. (To spin that another way, the ones who were caught using the app were not the best examples, we hope, of the typical users of these apps. We hope.)

Beyond just the report, though, I want to mention a couple of other important things:

First, a friend noted that the Austin taxi industry is an entrenched interest ripe for disruption, especially in a town with as poor cab service as this one. Aside from the entrenched interest bit (SideCar has interests, they just aren’t entrenched yet), I think it really important to note that city staff writes, “City code currently would allow up to two additional franchises, if there has been an established need for additional permits.” I’m not sure how you demonstrate need, but step out onto Fourth Street at 2 AM on a Friday or Saturday night and you’ll feel a need to punch the next taxi driver who passes you by for the hot girl on the next block. Disrupting the industry isn’t what’s needed. Opening up those franchises to more businesses (possibly, as city staff suggest, partnering with a SPER like Uber?) and getting more cabs/vehicles-for-hire on the street is needed. Like, yesterday.

But I’d like to end on my usual snarky note to Sunil Paul over at SideCar. I’ve previously noted his preference for lawsuits over taking part in lawmaking. This report makes it plain. He and SideCar refused to help at all with the report. If you ask me, that shows contempt for all Austinites and fair play.


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