Texas Gov. Greg Abbott on Monday signed into law a measure creating a statewide regulatory framework for ride-hailing companies, overriding local measures that prompted businesses such as Uber and Lyft to leave Austin and other cities.
Representatives for Uber and Lyft have said the companies would resume operations in Austin Monday. Lyft will return to Houston on Wednesday, May 31 at 2 p.m.
“What today really is is a celebration of freedom and free enterprise,” Abbott said during a signing ceremony. “This is freedom for every Texan — especially those who live in the Austin area — to be able to choose the provider of their choice as it concerns transportation.”
House Bill 100 undoes local rules that the two companies have argued are overly burdensome for their business models. It requires ride-hailing companies to have a permit from the Texas Department of Licensing and Regulation and pay an annual fee of $5,000 to operate throughout the state. It also calls for companies to perform local, state and national criminal background checks on drivers annually — but doesn’t require drivers to be fingerprinted.
Ride-hailing platforms, including Lyft and Uber, have been operating off-and-on for the past several years in San Antonio where the City approved agreements with companies in December 2016. The new law changes nothing for passengers and drivers in San Antonio, according to a Lyft spokesperson. The agreements made fingerprint background checks optional for drivers.
After Austin implemented a fingerprinting rule, Uber and Lyft spent millions in a campaign last year to overturn it — an effort that ultimately failed when voters rejected a ballot proposition on the issue. After the vote, both companies immediately suspended services in the city, and the resulting ride-hailing vacuum attracted several start-up ride-hailing apps to Austin that have said they comply with the city’s rules.
During Monday’s ceremony, Abbott called it “disappointing” that Austin “rejected and jettisoned that very freedom from the customers who wanted to have a choice in what transportation provider they could choose.”
“Today is also a day of tremendous free enterprise,” Abbott added.
Following the passage of the bill in both chambers, however, Austin Mayor Steve Adler issued a statement saying he was “disappointed” the Legislature voted to nullify regulations the city had implemented.
“Our city should be proud of how we filled the gap created when Uber and Lyft left, and we now must hope that they return ready to compete in a way that reflects Austin’s values,” Adler wrote.
More than two-thirds of the members from each chamber supported the HB 100. That distinction matters because of a provision in the bill that allows it to go into effect immediately after the governor signs it instead of on Sept. 1.
The bill included a controversial amendment that defines “sex” as “the physical condition of being male or female.” The amendment, proposed by state Reps. Tony Tinderholt (R-Arlington) and Briscoe Cain (R-Deer Park) comes amid a legislative session in which some GOP lawmakers have pushed for measures that would keep transgender Texans from using public bathrooms that match their gender identities. Uber and Lyft objected to the amendment, but did not withdraw their support of the measure. Several House Democrats took their names off the bill after the amendment passed.
Both the upper and lower chambers’ bill sponsors have defended the amendment as “further defining something that’s already defined.”
Currently, 41 other states have adopted comprehensive ride-hailing laws similar to Texas’ new law. The Florida Legislature also passed a statewide measure in mid-April.
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Representatives for Uber and Lyft said an amendment to a statewide ride-hailing bill that defines “sex” as “the physical condition of being male or female” is disappointing and unnecessary.
Disclosure: Uber, Lyft and the Texas Municipal League have been financial supporters of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.