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Three rideshare bills

The Texas A&M Transportation Institute Policy Center looks at the (first) three bills relating to ridesharing that have been filed in the Lege:

Three bills have been filed so far in the 85th Texas Legislature, regular session, addressing transportation network companies, frequently referred to as ride-hailing or (less accurately) as ridesharing. The bills are

  1. SB 113 Relating to the provision of and local regulation of certain for-hire passenger transportation.
  2. SB 176 Relating to the regulation of transportation network companies; requiring an occupational permit; authorizing a fee.
  3. SB 361 Relating to transportation network companies.

SB 113 and SB 176 have been referred to the Senate Business and Commerce Committee. SB 361 is expected to follow when it is referred to committee.

SB 133 prohibits municipalities from regulating any vehicles for hire (including taxis) and imposes minimal state-level regulation in its place. SB 176 and SB 361 also remove municipal authority over TNCs but introduce state level regulation. There are differences between the latter two (permit fees, for example), but the provisions of both bills are similar to those passed in other states. SB 361 further clarifies that TNCs are not motor carriers and, thus, not regulated under the motor carrier statutes.

There’s further analysis there, so go read the rest. SB361 is by Sen. Robert Nichols, who chairs the Senate Transportation Committee, SB176 is by Sen. Charles Schwertner; it has five co-authors, including Democratic Sen. Juan Hinojosa. SB113 is by Sen. Don Huffines, and it’s basically a part of his plan to turn cities into helpless wards of the state. That’s the order in which I’d rank them from least to most objectionable. I’d be fine if nothing passes, but something likely will, and if that is the case I can live with either of the first two. There’s room to make them less daunting for cities, and I hope that happens. We’ll see how it goes.

Council approves Uber deal

I’d forgotten about this.

Uber

Uber will remain operating in Houston at least through the Super Bowl, after City Council approved changes to the city’s paid ride rules ironed out between the popular ride-hailing service and Mayor Sylvester Turner.

Council members, after a sometimes contentious discussion on Wednesday, approved the revised city rules for taxis, so-called transportation network companies like Uber and limo providers. The changes – which keep Houston’s fingerprint check for drivers in place but eliminates other requirements to operate here such as a mandatory drug test and physical – came after Uber indicated it would leave rather than cooperate with many of the rules.

[…]

City officials said the changes do not compromise passenger safety, while giving Uber and taxi companies more latitude to quickly and easily enroll drivers. When Uber and other companies that connect riders and drivers via smartphone app hit the road in Houston in early 2014, city officials opted to keep many of the same requirements in place that had existed for taxi drivers. After more than two years of study, the city thinks it can roll back some of the unnecessary rules, said Tina Paez, director of the city’s regulatory affairs department.

“We are not going to be everyone’s (human resources) department anymore,” Paez said, referring to redundancies in the company’s background check and the city’s requirements.

See here for the background. This will keep Uber in town through February 5, after which they may or may not finally follow through on that threat to take their app and go home. Or they may wait and see if the Lege takes care of their longstanding complaints about Houston’s and other cities’ regulatory structure. Be that as it may, they’re here for now, so ride ’em if you got ’em.

City reaches deal with Uber

From the inbox:

Mayor Sylvester Turner

Mayor Sylvester Turner

Mayor Sylvester Turner today announced a comprehensive strategy to streamline the City’s vehicle-for-hire licensing process to ensure that Uber remains in Houston and that Houstonians and visitors have as many transportation options as possible during the upcoming Super Bowl. As part of the plan, Uber has committed to continuing operations in Houston with the use of fingerprint background checks through the Super Bowl.

“I am thrilled we can finally put this issue to rest and focus on the real task at hand—providing a great Super Bowl experience that shows off our City,” said Mayor Turner. “We’ve crafted a proposal that reduces the length and cost of a driver application but still protects public safety. This is a win for drivers and passengers alike. These changes will help make sure that visitors have a seamless experience during the Super Bowl and Houstonians have diverse transportation options to meet the growing needs of our city.”

As part of the agreement, the City will bring forward process-improvement changes to Chapter 46 of the City Code which regulates vehicles-for-hire such as taxis, limos, and TNCs (transportation network companies such as Uber). The streamlined changes will reduce the costs of licensing from nearly $200 to $70, cut the licensing process in half, and allow drivers to be licensed in under 20 minutes. The City’s policy on background checks will not change. The proposed changes are expected to come before City Council before the New Year.

Mayor Turner also announced the launch of Arro, the City’s official multimodal transportation app, which will help make the City’s fleet of over 9,000 taxi and limo drivers more readily accessible to the general public. Building on Top Taxi, Houston First’s initiative to improve the quality and customer service of Houston’s taxi industry, Arro will help transform the taxi experience in Houston.

“In a city as large and diverse as Houston, taxis and limos will always play a critical role in our transportation strategy,” said Turner. “Arro and Top Taxi will help modernize our taxi industry by making our fleet more efficient and equipping Houstonians with access to multiple forms of transportation at the push of a button.”

While initially offering taxi rides, Arro’s offerings will expand in the coming months to include limos, wheelchair accessible vehicles, and collaborations with other forms of vehicles-for-hire and METRO. Arro is available for download on Google Play and the Apple App Store.

“We are very excited to bring Arro’s consumer and driver friendly app to the people of Houston starting today. Arro’s presence is a significant step toward enhancing robust transportation options throughout Houston,” said Mike Epley, founder of Arro. “Our app has already enjoyed great success in several cities by offering a potential boost to drivers’ incomes and providing faster and easier transportation access for passengers. ”

“Houston First recognizes that reliable and safe transportation is essential to the city’s success as a destination,” says Dawn Ullrich, president and CEO of Houston First Corporation. “That’s why we launched the Top Taxi Program in 2015 to coach our taxicab drivers on delivering a better customer service experience. Now, Mayor Turner is taking it a step further with the implementation of Arro, which we believe will revolutionize the user experience with taxis in Houston. We’re excited to partner with the city on the ongoing Top Taxi program and the rollout of Arro.”

See here for the background on Arro. You may recall that Uber had threatened to leave Houston after the Austin rideshare referendum was voted down, but since those initial rumblings there hasn’t been much from either them or the city. While Council members were not lining up to support Uber in this, there was some concern expressed about the availability of vehicle-for-hire services during the Super Bowl; Arro’s development was in part a hedge against that. This agreement means that those worries can be laid to rest.

The larger fight remains unresolved, however.

The fingerprint check – as opposed to the company’s preferred Social Security number-based check – has been the major disagreement since Houston legitimized the ride providing companies in November 2014.

“Our stance hasn’t changed in any way on fingerprinting,” said Trevor Theunissen, public policy manager for Uber in Texas. “This is a compromise to improve the driver licensing process so we can get through the Super Bowl.”

The deal does not, however, slow efforts by Uber and state lawmakers to develop statewide transportation rules during the upcoming legislative session. Sen. Charles Schwertner, R-Georgetown, filed a bill Monday to create statewide transportation rules for companies like Uber, but keeps taxis regulated at the local level.

Here’s Sen. Schwertner’s statement about the city’s deal with Uber. You know, I’m old enough to remember a time when it was considered “conservative” to value local government over state or federal government, on the grounds that local government was closer to the people and thus more responsive to their needs and accountable to their votes. That just sounds so adorable now. I mean, what could we Houstonians know about our wants and needs compared to a Senator from Williamson County? So until the Legislature crushes it underneath their mighty boots, chalk up another accomplishment for Mayor Turner.

UPDATE: The Press has more.

Council approves city cab-hailing app development

Here it comes.

Houston residents soon will be able to hail a city cab via smartphone app, after City Council signed off on a plan Wednesday to consolidate dispatching in a single program.

The Arro app, already operating in New York, Boston, San Francisco and Chicago, is expected to be fully operational in Houston by the end of the month, combining dispatch for Houston’s 146 taxi companies. The city is requiring all of its roughly 9,000 licensed cab and limo drivers to participate.

“It is innovative. It’s taking advantage of technology that exists to create a centralized dispatch service,” Turner told City Council. “If you go to the airports, you’ve got cabs that are sitting there pretty much six, eight hours a day, waiting on a customer. Under this system, they can be out there servicing Houstonians. They don’t lose their place in line, and when it’s time for them to do something, they get a ping.”

Cab and limo companies had urged the city to develop an alternative to Uber, which dominates Houston’s ride market. Uber and other ride share drivers would not be included in the Arro app.

No taxpayer money will be used to develop or advertise the app, though city staff will coordinate with Arro, and elected officials could devote time to promoting the program.

Riders who use the app would pay $1.50 on top of the cab fare, and drivers would pay 50 cents for each app-generated trip, plus 3 percent of the total fare for a credit processing fee.

See here for the background. I kind of have zero expectations for this, but it does provide a needed service for independent cabbies, it’s being developed on the provider’s dime, and it’s not like it could hurt. I’ll be very curious to see what its download and usage numbers look like in a year.

Other rideshare companies sued over lack of access for disabled people

Noted for the record.

A state disability rights group has sued the ride-hailing apps Get Me and Fare in federal court, arguing that because the apps only partially offer text-to-speech software, they are unusable for blind people and therefore in violation of the Americans with Disabilities Act.

For example, Austin resident and accessibility consultant Jeanine Lineback, who is blind, was able to set up an account but was not able to request a ride, the lawsuit says.

The Fare app was officially made accessible to blind individuals in its iPhone update Sunday, and the Android app will have the same update in two weeks, Fare’s CEO Michael Leto said. As a result, Leto expects the lawsuit to be dropped against Fare.

Officials with Get Me said they disagree they are in violation of the Americans with Disabilities Act because they do not provide public transportation.

The National Federation of the Blind chapter in Texas is suing on behalf of Lineback and four other Austinites, arguing that they are entitled to damages as well as an injunction against the apps, according to the lawsuit filed Tuesday. The injunction would require that the apps’ companies make these apps accessible to people who are blind.

When the National Federation of the Blind sued Uber in 2014 over some drivers refusing to transport blind individuals with guide dogs, Uber also argued that the Americans with Disabilities Act does not apply to them. However, the federation argued that private entities primarily engaged in providing transportation services are covered by the act, and Uber settled the lawsuit this summer.

[…]

“Get Me and other similar taxi services are a critical transportation option for many blind individuals in Austin, Texas,” the suit says. “Due to distances between destinations and the limitations of public transportation and paratransit, many blind persons must use taxi services to travel from one place to another.”

The suit also argues that if these kinds of apps put traditional taxis out of business, people who are blind will have even fewer options to get around. The suit says “other competing taxi services” operating in Austin have incorporated this technology into their apps, but does not specify which ones.

Color me unimpressed with GetMe’s defense. All of these rideshare companies need to have some level of accommodation for disabled riders. Perhaps the formula for it should be different than it is for a traditional cab company or public transit service, but it needs to be greater than zero, and they need to be accountable for it. That has to be a corollary of the way the vehicles for hire industry is changing. I hope GetMe can follow Fare’s lead and find a way to settle this rather than fight it out in court.

The city cab app

Meet Arro.

Houston’s fractured taxi market is headed toward a rare bit of unity, with a push by the city toward how people hail cabs in the 21st century.

As the taxi and limo industry adjusts to new ways of doing business, under intense competition from firms like Uber, city officials plan to consolidate dispatching via a private smartphone app in an attempt to buoy travel options for visitors and residents.

Citing a need to better use the nearly 4,000 taxi and limo permits across roughly 9,000 drivers, city officials announced Monday that Arro, a company already combining dispatch in New York, Boston, San Francisco and Chicago, will develop a universal taxi app for Houston’s 146 taxi companies.

“We’re excited to bring the taxi industry, fully, into the digital age,” said Tina Paez, director of Houston’s Administration and Regulatory Affairs Department.

Cab and limo companies encouraged the city to develop something to even the playing field with Uber, which has dominated the ride market since arriving legally in Houston in November 2014.

“I think you will have people come to rely on faster cab service than they do now,” said Duane Kamins, owner of Lone Star Cab Company.

The app would mean all cabs could be hailed based on who’s closest, breaking the taxi reliance on downtown cab stands and airport trips that leads to bunching of vehicles and a lack of available rides in other neighborhoods. The app also provides an emergency scenario, should Uber – which opposes some of Houston’s regulations – bail right before thousands descend for the Super Bowl.

City Council is expected to discuss the app at its meeting next week.

Starting with consolidating taxi companies into a single online dispatch system, the app will eventually expand to include other features such as transit schedules, real-time traffic information and bike sharing information.

Council member Michael Kubosh, however, questioned at a Monday committee meeting why the city was entering into the app business – or even encouraging a vendor to jump in.

“If you want government intervention and you all are holding hands singing Kumbaya, I will vote for your government intervention,” Kubosh said.

No taxpayer money will be used to develop or advertise the app, though city staff will guide the process with Arro, and elected officials could devote time to promoting it.

I don’t see any problem with the city’s involvement, especially given the other features mentioned. Cabs remain a regulated utility, so there’s a pretty good argument to be made that the city should get make this kind of investment. The concerns CM Greg Travis raised about Arro’s app receiving mediocre user ratings are more worrisome, but let’s not get ahead of ourselves. It’s a good idea, and it brings independent cabbies into the fold as well. Let’s see what the beta version looks like and go from there.

How do other states regulate ridesharing?

The Texas Legislature would like to know.

Uber

As Texas lawmakers consider filing legislation next year related to ride-hailing companies, they learned Tuesday that more than 30 states have passed laws calling for some level of regulation of companies like Uber and Lyft.

A report presented by Texas A&M University’s Transportation Institute analyzed state and municipal regulations since 2012. It found that 24 states passed legislation requiring ride-hailing apps, sometimes referred to as transportation network companies, must apply for a state permit before operating. The report also found that 30 states require background checks on the driver before or a specific amount of time after the driver begins working.

Lyft

“Transportation network companies have expanded rapidly to cities worldwide,” Ginger Goodin, a senior research engineer and director at the institute, told House Transportation Committee members at a hearing Tuesday. “However, they do not fit neatly within our current regulatory schemes.”

[…]

According to Goodin, there is no statewide policy in the country that requires fingerprint-based background checks. The group did not look into the number of municipalities that require those checks.

“There are many questions and unknowns,” Goodin said. The institute expects to continue to research the ride-hailing companies in the future.

You can see a copy of the report here. It seems very likely we are going to get some kind of statewide Uber/Lyft bill, it’s just a matter of whether the bill is a complete sop to them or if it tries to balance their interests with those of the cities and existing cab companies. The two Transportation chairs – Sen. Robert Nichols and Rep. Joe Pickett – are decent, and the guy who introduced the statewide bill last session (Rep. Chris Paddie) took the process seriously, so if those three are among the main movers, it’ll probably be all right. Just keep the chuckleheads like Sen. Don Huffines away from it, that’s all I ask.

Driverless taxis debut in Singapore

Not fast enough, Uber.

The world’s first self-driving taxis will be picking up passengers in Singapore starting Thursday.

Select members of the public will be able to hail a free ride through their smartphones in taxis operated by nuTonomy, an autonomous vehicle software startup. While multiple companies, including Google and Volvo, have been testing self-driving cars on public roads for several years, nuTonomy says it will be the first to offer rides to the public. It will beat ride-hailing service Uber, which plans to offer rides in autonomous cars in Pittsburgh, by a few weeks.

The service will start small — six cars now, growing to a dozen by the end of the year. The ultimate goal, say nuTonomy officials, is to have a fully self-driving taxi fleet in Singapore by 2018, which will help sharply cut the number of cars on Singapore’s congested roads. Eventually, the model could be adopted in cities around the world, nuTonomy says.

For now, the taxis only will run in a 2.5-square-mile business and residential district called “one-north,” and pick-ups and drop-offs will be limited to specified locations. And riders must have an invitation from nuTonomy to use the service. The company says dozens have signed up for the launch, and it plans to expand that list to thousands of people within a few months.

The cars — modified Renault Zoe and Mitsubishi i-MiEV electrics — have a driver in front who is prepared to take back the wheel and a researcher in back who watches the car’s computers. Each car is fitted with six sets of Lidar — a detection system that uses lasers to operate like radar — including one that constantly spins on the roof. There are also two cameras on the dashboard to scan for obstacles and detect changes in traffic lights.

The testing time-frame is open-ended, said nuTonomy CEO Karl Iagnemma. Eventually, riders may start paying for the service, and more pick-up and drop-off points will be added. NuTonomy also is working on testing similar taxi services in other Asian cities as well as in the U.S. and Europe, but he wouldn’t say when.

“I don’t expect there to be a time where we say, ‘We’ve learned enough,'” Iagnemma said.

Doug Parker, nuTonomy’s chief operating officer, said autonomous taxis could ultimately reduce the number of cars on Singapore’s roads from 900,000 to 300,000.

“When you are able to take that many cars off the road, it creates a lot of possibilities. You can create smaller roads, you can create much smaller car parks,” Parker said. “I think it will change how people interact with the city going forward.”

Uber is planning to roll out its driverless car pilot in Pittsburgh shortly, but they will not be first in line. The claim that driverless cars will ultimately solve traffic congestion is one of which I remain deeply skeptical, but we’ll see, perhaps sooner than I think. In the meantime, you can read more about NuTonomy, which has its origins at MIT, and this pilot test here, here, and here. Would you ride in one of these things?

El Paso revises its rideshare rules

Uber gets its preferred regimen.

Uber

The El Paso City Council approved an ordinance designed to ease regulations and fees on taxis and ride-sharing companies like Uber.

Amendments to the Transportation for Hire Ordinance, which Council approved unanimously on Tuesday, requires all businesses have an operating authority permit and drivers pass a background check. It will also do away with 26 fees and cut costs up to 95 percent.

[…]

Other loosened regulations include no longer requiring drivers to have a medical certification and outdated two-way radios. City vehicle inspections will be eliminated and driver and vehicle permits will not be required. The age limit on vehicles has also been removed.

The newly-passed ordinance also requires companies to provide wheelchair-accessible vehicles upon request. That means Uber would have to have an agreement with a cab company to pick up a client if they did not have a vehicle available.

See here for a preview of the vote, and this story from May about the direction El Paso took in redoing its rules. They basically took the approach of easing or removing regulations that had been in place for traditional cab companies rather than retrofitting existing rules to Uber. And yes, that means no fingerprint requirements, which as you can see from that first story is not what the cab companies wanted. As is their way, Uber had threatened to leave El Paso if the rules weren’t changed; their triumphant press release following this action congratulates them for becoming “the 13th Texas city to adopt modern ridesharings rules”. One presumes Lyft has an interest in this as well, but as of today they don’t operate in El Paso, so we’ll see if that changes.

Fort Worth adopts minimalist rideshare regulations

This ought to be interesting.

Uber

Months of work redrafting the city’s vehicle-for-hire ordinance wrapped up Tuesday night when the Fort Worth Council approved new rules that require transportation companies only to register with the city.

The approach chosen by Fort Worth avoids more onerous regulations — including requirements for fingerprinting drivers — that proved problematic in other cities. And it gives Uber, Lyft and others the hands-off regulatory environment they had pleaded for in the city.

The City Council long ago began exploring how to cover the fledgling industry with an ordinance, only to realize months into the process that it didn’t want to regulate the transportation companies, saying smartphone app-based ride share companies had changed the business landscape.

Council members opted for free-enterprise and competition despite a last-minute plea from the traditional taxicab companies that wanted the city to continue to regulate their industry. Taxicabs have always been regulated, they said, and that’s what the public expects.

Jack Bewley, president of Yellow Cab, said the proposed ordinance did not ensure safety for the passengers. He warned the council the city could see an influx of one-man cab companies with owners who have criminal backgrounds and can’t get insurance.

“This ordinance is being set up where an individual … can come down here and say I want to start a taxicab company,” Bewley said.

Lyft

The council voted 8-0 to approve the new ordinance. Councilman Jungus Jordan was absent.

Mayor Pro Tem Sal Espino said the ordinance meets market innovation.

“Council, in articulating its vision for the regulatory framework, decided the best way is the free-market approach. At this point in time, in the evolution of the ride-sharing services and the transportation services, this is just another option. After much debate, after much discussion, we’re ready to move forward.”

Mayor Betsy Price said, “We just must embrace all forms of transportation to avoid gridlock in our city and allow our citizens to get around. Part of our job is to not cause undue burden on businesses or citizens. Unlike other cities that have gotten so hung up in the hot potato politics of this, Fort Worth is going to do it the right way.”

[…]

Under the new ordinance, which takes effect Oct. 1, companies, whether motorized or non-motorized, will pay a $500 operating license fee that’s good for two years. The companies will be required to annually certify that they have done national background checks on their drivers, that their drivers hold valid driver’s licenses and that drivers and vehicles are properly insured.

The ordinance does come with a strict penalty if the company is found not to be in compliance — it will lose their operating license for two years. Passengers can file complaints with the city.

Well, that’s one way to do it. I sent an inquiry to Uber about how Fort Worth’s ordinance differs from those in San Antonio and Dallas, and I was informed that while Uber’s screening process is the only mandatory background check for those cities, San Antonio offers drivers an opportunity to voluntarily undergo a fingerprint background check, and drivers in Dallas are required to obtain a City permit. The only additional step drivers are required to complete to obtain that permit is undergoing an additional vehicle inspection.

It will be interesting to see what the response is when the inevitable problems arise. Bad apples will always slip through, as they have done in the pre-Uber days, and some of them will turn out to be the kind of person you’d really want to be the kind of person to be identified by a background check as a bad risk. It’s Fort Worth Mayor Betsy Johnson and the members of their City Council who would face any consequences from this. It could easily be overblown by sensationalist news coverage, but if something bad does happen, it could really blow up. Just something to keep an eye on, and to keep in mind as the legislative session approaches.

Not addressed by this story is the question of access to rides for people with disabilities. One of the reasons why cab companies have been regulated the way they are is because they have a mandate to provide service for residents who can’t get themselves around town. How will that work under this structure? In Houston, Uber agreed to provide a certain number of vehicles that can accommodate people with disabilities, and in their more recent threat to leave they stated that accommodations for the disabled could be achieved under a regulatory scheme that was more to their liking (scroll to the bottom). In some cities, this UberACCESS service has partnered with transit agencies as well. What responsibilities do rideshare and traditional cab companies have in this new environment? There’s already litigation over the issue of disabled Texans being denied service by rideshare companies. I’m sure they’ll be watching what happens in Fort Worth with great interest.

All that said, this could work out fine. It may be that the issue of access for disabled folks will continue to be addressed in a way that is acceptable to all, and it may be that the number of problems with drivers of questionable backgrounds is vanishingly small. This will certainly provide fodder for that debate. It’s not the approach I would take, but that doesn’t mean it’s wrong. We’ll just have to see how it goes. The Chron has more.

PocketCab

Austin isn’t the only city with rideshare innovation happening.

Sugar Land-based PocketCab LLC plans to fill the potential void with a new dispatch app for taxi and limousine companies if Uber does decide to leave the Houston market.

PocketCab works similarly to on-demand services today except that it pulls from independent limo and taxi drivers, not someone looking to use their own vehicle for brief periods like as in San Francisco-based Uber Inc.’s platform. Taxi drivers that don’t lease their vehicles from a large company like Yellow Cab struggle in today’s technology-driven industry and need a place to pick up more rides besides a cab stand at the airport, said Edmund Samora, CEO of PocketCab.

“Taxis need to get on a central dispatch system,” Samora told the HBJ. “Individually, they’ll never be found.

[…]

To list as a driver on the service, PocketCab charges about 10 percent of a drivers earnings, Samora said. The company wants to become the app for the city of Houston, which had previously said it wants to launch an app before the Super Bowl in 2017, but PocketCab will still launch in Houston regardless if it’s awarded the city contract or not, Sinhasane said.

Here’s their website and Facebook page. They’ve been operating in Houston since last October, and this story is as much about their joint venture with MobiSoft to improve their app platform as it is about their goals for Houston. I just like to keep track of this sort of thing, to remind us all that there are and will be other options out there.

And on that note:

When Michael Leto heard the news last month that Uber and Lyft were pulling out of Austin, Texas, because of an ordinance regarding driver background checks, he hopped on the first flight there. As the CEO of a Phoenix-based ride-hailing company called Fare, Leto saw an opportunity too good to pass up.

Leto arrived in Austin on a Monday afternoon, met with the mayor on Tuesday and got approval to operate in the city the following Friday. In Fare’s first two weeks there, the company had already paid nearly 1,300 drivers for roughly 20,000 trips. The business in Austin is so good, Leto said, he’s planning on moving his company headquarters there.

For smaller ride-hailing companies like Fare, the prospect of a suddenly wide-open marketplace — one without the 800-pound gorillas of Lyft and Uber in a city full of drivers and riders already accustomed to the concept of ride-sharing — is an unprecedented business opportunity. The scramble to build the “next Uber” in Austin has been rapid. With more than 900,000 residents, a huge university, active nightlife and a tech-savvy workforce, Austin represents an ideal test bed for new tech services.

Since Uber and Lyft left Austin, half a dozen ride-sharing operators have secured the city’s permission to operate, and a soon-to-launch nonprofit is likely to join the list soon. Another company is linking people to rides on a Facebook group while it perfects its peer-to-peer technology.

“You think about competing with multibillion-dollar companies, and then you show up in a city where all of the infrastructure and training have already been done,” said Leto. “It’s been quite a nice transition for us to come to Austin.”

[…]

Austin marks the first place where the public, which Uber often rallies to its side against regulators and policymakers, rejected its policies. Now it could also be the place that shows whether Uber and Lyft are indispensable.

So far, though, it’s unclear how exactly the companies’ departure will impact Austin residents. Demand for rides right now is typically lower than at other times of year. The spring semester for the University of Texas, which enrolls 51,000 students, ended the day before the vote, leaving fewer potential passengers in town. Tourism season hasn’t kicked into high gear yet, and some of the city’s largest draws won’t occur for months — including the Austin City Limits music festival, which begins in September, and South by Southwest, slated for next spring.

For the drivers — many of whom lost their livelihoods when Uber and Lyft left — the city has worked to help them bounce back. It’s held a job fair to match drivers with new companies and helped set up a hotline to assist former Uber and Lyft drivers in finding work or getting services like unemployment.

“Uber and Lyft left their drivers, in particular, and their riders, in the lurch,” said Councilmember Ann Kitchen, who heads the city council committee that drafted the safety rules for ride-hailing companies.

The city can’t favor any of the companies, but it has offered services for all of the drivers and companies that have shown interest.

Kitchen also said that the surge of companies applying to operate in Austin shows that the ordinance is not overly restrictive.

“We always said that Austin is a great market, and we expected there to be TNCs [transportation network companies] that wanted to come to Austin that would operate within the public safety values and requirements of the community,” she said. “That’s what all of these TNCs are doing.”

Not that that’s likely to cool anyone’s ardor for overriding local ordinances via the Legislature, but it is an interesting counter-narrative anyway. And don’t we usually celebrate when a company relocates its headquarters to Texas? That wouldn’t have happened here had it not been for Austin’s ordinance and the Prop 1 election. Funny how these things work, isn’t it?

What do we really want from rideshare regulations?

From Medium:

Uber

To help ensure people have a fair chance at earning a living, Uber’s screening process embraces protections codified in the Fair Credit Reporting Act and other similar laws, ensuring lookback periods are reasonable and arrests without convictions or charges are not considered, among other indicators. We have said time and again that fingerprinting may not be the best way to determine whether or not someone is qualified and able to provide a safe and reliable ride. Further, there’s no evidence to suggest it would improve safety for passengers and it has costs to privacy that other approaches to background checks do not.

We believe the right path forward is to continue to improve the level of transparency and accountability that’s built-into our service and the processes available for screening drivers. Instead of relying solely on flawed databases that are known to have information gaps, our technology makes it possible to focus on safety before, during and after every trip.

When so many people’s lives are deeply affected by their inclusion in a potentially faulty database, it’s important that the public has the time and ability to analyze what’s in it and how it’s being used. We hope the DOJ and FBI not only grant these groups’ well-warranted request for an additional 30 days to comment on its proposal but also, consider the quality of the database and whether or not people should know how it may affect their lives.

From Jay Aiyer, in the Chronicle:

Historically, taxis have been one of the most heavily regulated local industries. City governments have restricted everything from the number of taxi licenses issued to whether a driver can use a cellphone while operating a vehicle. The list can be quite long and intrusive. Ride-sharing companies often argue that these regulations are unnecessary. After all, no other industry is subject to this level of restriction. Municipalities place no restrictions on the number of fast-food restaurants, nor do they require background checks for cable employees entering people’s homes. So why vehicles-for-hire?

The simple reason is the quasi-public function they serve. While private businesses, vehicles-for-hire serve a distinct public transportation function that is unique and still necessary in our society. They are an extension of the city in welcoming visitors, transporters of last resort for transit-dependent populations, and a critical safety valve for impaired drivers. They are simply not the same as a fast-food franchise or the cable company. They are a critical part of a community’s transportation network.

If we accept the need for some restrictions, the obvious question is: what kind? Public safety, access protections and insurance requirements seem obvious. We have a high expectation of safety and security when using a vehicle-for-hire, and having fingerprint-based criminal background checks to determine basic eligibility to drive is important. But even those restrictions should be relatively limited.

While we can agree we don’t want those convicted of serious crimes driving, we need to be more flexible to allow individuals who have paid their debt to society to be employed. Similarly, having broad insurance requirements is a critical need to ensure general public safety and avert catastrophic medical costs. We can’t have accidents with uninsured passengers or drivers. Finally, there should be no debate over the need to protect access to transit services. All people, regardless of neighborhood, should have access to vehicle-for-hire services.

So let’s talk about fingerprints for a minute here. Everyone agrees that there are some people we would rather not have driving cars we pay to ride in. We do background checks, which include checks of criminal records, to try to identify these people that we want to exclude. Fingerprints are an obvious entry point to this data. I presume there are others, for if not then I’m honestly unsure how Uber and Lyft can claim to check these records, but assuming there are then the argument we’ve been having is mostly about whether this is the most effective way of looking at arrest and conviction information.

The discussion we should be having comes back to that question about who we want to keep out of the driver’s seat. Ideally, that should involve a risk assessment of some kind. Not all criminal records are created equal. Violent crimes are a big red flag, but it’s also reasonable – our national conversation about drug reform notwithstanding – to prefer to not have people with drug convictions serve as drivers. There’s also a difference between being arrested and being convicted, and between recent arrests and those that happened ten, twenty, thirty years ago. How do we assess this information and come to reasonable, consistent decisions about who we grant permits to and who we refuse them to? And if we’re going to argue about what if any role fingerprints should have in this process, then it would greatly help to know how Uber and Lyft arrive at their conclusions about those who apply with them. What are their criteria for determining who’s in and who’s out? If they want us to trust them, we need to know that.

As I say, this is the discussion we should be having. It’s hard to do in an environment where a key stakeholder refuses to engage beyond “let us do it our way or we’re outta here”, but that’s where we are. To be sure, the current process mandated by the city could be improved, to make it more convenient and less time-consuming for would-be drivers. I don’t know the specifics so I’ll skip the part where I make suggestions, but I’m sure if Uber or anyone else wanted to make their own to the city, they would be amenable to them. It would help if Uber backed down from the ultimatum first, of course. You know, as a show of good faith. I for one would like to see Uber and Lyft and some other competitors operate in Houston. I’d also like for us to come to a consensus about who we do and don’t want doing the driving. I feel like if we can do this, the rest will follow. Who’s with me?

In the meantime, the State House Committee on Business and Industry is holding a hearing in Austin on Wednesday at 10 AM to discuss the sharing economy. Uber General Manager Sarfraz Maredia has been asked to testify, as have representatives from Houston and Dallas. A livestream of the hearing can be seen here. I’ll be very interested to see the reporting on this.

RideAustin

Another new player gets set to enter the Austin rideshare market.

Adding to the growing number of ride-hailing options in Austin since Uber and Lyft’s wholesale evacuation, a new nonprofit, community-based app called RideAustin was introduced today at the Alamo Drafthouse on South Lamar.

The app is being described as “innovative,” as well as made “by Austin, for Austin,” according to Joe Deshotel, RideAustin’s PR representative.

The initiative is a collaboration of Austin-based tech entrepreneurs and community leaders, for service that “[brings] the community together to build local solutions for Austin’s ridesharing future.” Formed as a nonprofit, and led by billionaire Austin tech giant and Trilogy founder Joe Liemandt and Crossover founder Andy Tryba, RideAustin’s overarching goal to become a “community asset,” per Deshotel, begins with uniting tech advancement with social responsibility.

Only two weeks in the making – Deshotel himself joined the group a week ago – the app joins Get Me, zTrip, Wingz, and still-in-the-works Warp Ridesharing. The RideAustin app will go live for iPhone users this morning, with service starting in June. (The Android version of the app is also expected to roll out in June.) Prospective drivers can start the on-boarding process, and get themselves scheduled for fingerprinting.

Blue-sky success would involve a smooth scale out from its initial services areas: the Austin-Bergstrom International Airport and the Downtown area, for which exact parameters haven’t been set. Not having “to worry about shareholders” as a nonprofit, it “will allow drivers to earn more [RideAustin will take a smaller than industry-standard commission] and riders pay less while helping local charities.”

Initial ride pricing itself is unknown, but unlikely to be as low as Uber and Lyft, at least to start. As reported previously, the best current option, Get Me, has been struggling with driver/rider matches, often forcing riders to wait longer than 10 minutes – Uber took an average of three minutes – and pay significantly higher prices.

Two unique RideAustin app features include a fare roundup option and “optional surge pricing,” says Deshotel. The fare roundup feature would allow riders round their fares up to the next dollar over the fare, to be given to a choice of as-yet-determined charities.

The more interesting (and potentially problematic) feature, optional surge pricing, would allow riders to opt-in to surges, allowing them first ride at premium cost. Riders electing not to opt-in, or financially unable to do so, will remain in driver queues, placed behind those accepting surge pricing. Though RideAustin is surely a business in all contexts, even with its additional aims at targeting the underserved and disabled, locating balance will be paramount, and could throw its first-look presentation as community-facing into immediate question.

Having this be a nonprofit is an interesting variation, and while I’m not exactly sure how well that will work, I see no reason why it can’t work. The point is that we should all hope that at least a couple of these new ventures find success, which they are then able to bring to other cities. I’ve heard an awful lot about the “free market” in ridesharing over the past several months, but the truth is that the rideshare market was and currently is entirely dominated by two enormous firms. That’s a “competitive” market in the same way that the broadband and cable/satellite TV markets are competitive. Surely that’s not what we really want here, right? I’ll say again, the single best outcome here is for multiple viable alternatives to Uber and Lyft to emerge. That would be good for riders, good for drivers, and good for city governments that don’t want to be held hostage by a couple of would-be monopolists. The Statesman and Buzzfeed have more.

Austin rideshare referendum goes down

Boom.

Uber

Preliminary election day results in Austin show 56 percent of voters against Proposition 1, a ride-hailing ordinance supported by Uber and Lyft. With 76.76 percent reporting, 13,957 have voted against the ordinance and 10,901 have voted for.

These numbers mirror early voting results, where of the 54,759 ballots cast, 30,683 (about 56 percent) voted against the ordinance and 24,076 voted for. Early voting for Proposition 1 started April 25 and closed on Tuesday.

[…]

Lyft

Both Uber and Lyft said they plan to cease their Austin operations if the election does not go in their favor. Austin Mayor Steve Adler said he hopes to sit down with Uber and Lyft following the election.

“The people have spoken tonight loud and clear,” he said in a statement Saturday. “Uber and Lyft are welcome to stay in Austin, and I invite them to the table regardless. Austin is an innovative and creative city, and we’ll need to be at our most creative and innovative now.”

Rick Claypool, research director for Public Citizen, a consumer watchdog group, said the clash in Austin is unique because the city’s special election is the first time a proposal backed by Uber has actually gone to voters. Claypool said the city will serve as an “object lesson” for other cities and could cause a “chilling effect” for those considering regulations.

“Likewise, there are probably going to be cities that go out of their way to sort of lower the floor of requirements for companies,” Claypool said. “They’ll say, ‘Come here, we’re Uber-friendly. We won’t make you do those things that those uncooperative places make you do.'”

The election night returns are here. Don’t be misled by the “213 of 229 Precincts Reporting” note, it said that from the beginning and I suspect it was just an oversight. I gave up refreshing the main election returns page at about 10 PM; the most recent update at that time was from 9:46. It’s just a matter of the final margin.

You know how I felt about this. Whether Uber and Lyft follow through on their threat to leave or not was unknown at the time I wrote this. We’ll find out soon enough. I’m glad that this multi-million dollar attempt to hijack the local government process failed. I hope Uber and Lyft learn something from this. I have no doubt that there’s room for compromise and improvement in the process, but that requires a willingness to negotiate in good faith, and not come in with a bulldozer and a bottomless pit of cash to force what you want. If they decide to leave Austin and Uber pulls out of Houston, that will be too bad, but they’re the ones who sent the ultimatum. They went all in and they lost, by a lot. Will they double down or will they dial it back and try a different approach? Like I said, we’ll know soon enough. The Austin Chronicle and the Statesman have more.

What Council members think about the Uber threat

I was scrolling through Facebook and came upon this post from CM Michael Kubosh:

Mayor Turner wants UBER to stay, but they must follow the city’s ordinance that requires a CRIMINAL BACKGROUND CHECK and FINGERPRINTS. Council Member Michael Kubosh said that all public service drivers for buses, cabs, train, limos, shuttles and jitneys require the same CRIMINAL BACKGROUND CHECK and FINGERPRINTS. They must follow the rules. They came to Houston during the 2014 Rodeo operating illegally and the City Council changed the Ordinance to make room for their business model. NOW LOOK WHAT THEY ARE WANTING.

Which got me to wondering about other Council members and what they thought. Of the five Council members that voted against the original ordinance in 2014, four remain on Council: Kubosh, Jack Christie, Jerry Davis, and Mike Laster. I went looking, via Google, Facebook, and Twitter, to see who else has had something to say.

And the answer is, most of them have not said anything as yet. One who has is Brenda Stardig, who is the Chair of the Public Safety committee:

CM Dave Martin was quoted in one of the stories I blogged about after Uber issued its ultimatum:

“If you don’t want to follow the rules we all agreed to, have a good opportunity in another city,” District E Councilman David Martin said. “But we cannot be blackmailed when it comes to public safety.”

And that’s pretty much it for actual opinions. The only other Council member to say something was Greg Travis:

Mayor Sylvester Turner wants uber to stay in Houston, but wants the company to operate under the same rules as other transportation companies. Uber wants to eliminate regulation for its drivers to have city fingerprint check. Rather, uber wants to use its own background check. Mayor says uber’s background check inadequate. Your thoughts?

Comments on that post ran more in Uber’s favor than against, for what it’s worth. Also for what it’s worth. all four of these Council members – Kubosh, Martin, Stardig, and Travis – are Republicans; so is Jack Christie among the No votes from 2014, while Davis and Laster are Dems. I mention that mostly to note that if Uber is trying to make a free-market/deregulation argument, it’s not working on the kind of people you’d think it might work on. This discussion is just getting started, and Lord knows Uber is willing and able to dump a ton of resources into winning it, so this is hardly a final whip count. But clearly, Uber has some ground to make up to win this one.

Austin Uber referendum update

There’s still a crapload of money being spent by Uber and Lyft to win this thing.

Uber

In the last month, Ridesharing Works for Austin – the PAC established by transportation network companies Uber and Lyft – raised $4.9 million and spent $4.6 million promoting Prop. 1, the TNC-supported ride-hailing ordinance. With another million in the pipeline, that brings to $8.1 million the TNC’s intend to spend for the May 7 election.

That was the headline news contained in Friday’s “8-day-out” reports filed with the Austin City Clerk. By contrast, Prop. 1 opposition group Our City, Our Safety, Our Choice raised $88,000 over the last month (spending $68,000), bringing the group’s fundraising to $100,000 for the campaign thus far.

According to the Austin American-Statesman, RWA reported an additional $1 million contribution from Uber just before the filing deadline, for a total of $8.1 million. In case your calculator is overheated, that’s more than an 80 to 1 advantage to the Uber and Lyft resources, and a staggering record for money spent in an Austin city election – the previous standard was $1.2 million spent by Mayor Steve Adler in his 2014 campaign. Even the generally stoic Statesman transportation reporter Ben Wear began a Friday Tweet on the Uber and Lyft spending, “Mother of God” and ended: “Mind=boggled.”

Click over to see details on how all that money was sloshed around. I’d have to go back and do the math, but $8.1 million rivals what all of Houston’s Mayoral candidates raised last year; it’s almost certainly more if you take out self-funding. To put it mildly, that’s an awful lot of money to spend on a local election. But of course, it’s not just about Austin.

Lyft

Let’s put that figure in context. Not only is $8.1 million nearly seven times the most expensive municipal election in Austin’s history—the 2014 campaign of Austin Mayor Steve Adler, who set a new benchmark in political spending just two years ago—but it’s also over a million dollars more than Ted Cruz spent in his 2012 Senate campaign to beat then-Lieutenant Governor David Dewhurst. This is where we are with Prop 1, a municipal election about a very narrowly tailored piece of the city code that applies strictly to ridesharing services is costing more than a successful U.S. Senate campaign.

That is, er, friggin’ crazy, but it also helps reveal the stakes here. That money could certainly pay for a whole lot of fingerprint background checks that Uber and Lyft say are such an onerous burden (202,500 of them, to be exact, at $40 a pop), but it’s not really about whether fingerprinting is too expensive of a process to keep Uber and Lyft profitable. The campaign, ultimately, is a matter of principle for the companies—and they’re not just spending the money to win in Austin, they’re spending the money to show other cities considering similar regulations that they’re in it to win it.

The “yes on Prop 1” forces—that is, the Uber and Lyft side of the battle—have outspent their opponents at a rate of 81:1. (That crushes the argument that the regulations were initially passed by city council as the result of campaign contributions from the taxi lobby—if Austin’s city council was bought and paid for for a few grand, Uber and Lyft clearly slept on a great chance for bargain shopping.) That’s a huge amount for an election in Austin, but it could be worth it to send a message to Los Angeles, Miami, Atlanta, Denver, and other cities contemplating a fingerprinting requirement that this isn’t a fight worth picking.

The fact that the fight over Prop 1 isn’t strictly about Austin is clear in other ways too. Opponents of the recall campaign note that, when fingerprinting requirements went into effect in Houston, Uber continued to operate in that city. So if they didn’t follow through in Houston, why would Austin be any different? That argument is harder to make now than it was just a week ago: Uber announced on Wednesday that it was considering leaving Houston if the fingerprint regulations there aren’t overturned. That threat comes without a specific timetable, but the timing of the announcement—just as the “Uber will leave Austin if the regulation passes” argument needed some more urgency—suggests that the strategy here is a lot more than local.

All of that is fascinating, but ultimately, the expenditures, lobbying, messaging, and gamesmanship at work here are only part of the puzzle. Is all of this enough to get people to actually vote?

Early voting totals have been quite robust in Austin. As the TM Daily Post notes, given the unanimous opposition to Prop 1 among the reliable-voter factions, some of that money Uber and Lyft have spent has been to bring out the less-likely voters, whom they hope are in their corner. They’re getting the turnout; whether those voters are indeed on their side, and if there’s enough of them, remains to be seen. Whatever happens in Austin, Houston is next in the spotlight. The Chron urges Mayor Turner to stand strong.

For too long, Houston’s ride-for-hire business was dominated by a taxi cartel that used restrictive ordinances to keep out competition. Uber’s arrival smashed that status quo and brought Houstonians a quicker, cleaner and cheaper free-market alternative to rickety taxis.

Sure, Uber willfully disobeyed local laws and used every trick in the book to put political pressure on City Hall, but it was worth it so that Houstonians wouldn’t have to wait two hours to learn that a cab wasn’t coming. In the end, City Hall hammered out a deal to remove the regulatory barriers that prohibited Uber from entering the market.

But apparently that wasn’t enough. Now, as Turner and council tackle a budget crisis, a pension mess and all the fallout of recent floods, Uber expects them to drop everything and put its bizarrely specific pet issue on the immediate agenda.

Don’t let them take you on a ride, Mayor Turner. Don’t give in to their threats.

In the world of political carrots and sticks, Uber deserves a good bop on the nose for its tone-deaf and entitled attitude towards our city.

As I said before, that will be easier to do if the Austin referendum goes down. I’ll post results on Sunday.

Finally, I received the following press release from Uber in my mailbox yesterday morning:

As the Houston City Council considers revising the City’s ridesharing ordinance, a poll commissioned by Uber indicates that the vast majority of Houstonians support modernizing the outdated rules.

In the past nine months, a growing number of Texas cities have adopted new ridesharing regulations that uphold strong safety standards while also preserving economic opportunity for Texans. According to a survey conducted by We Ask America, 73 percent of Houstonians support changing the rules to make them more in line with the rest of the state.

The poll also revealed that 72 percent of Houstonians believe people are less likely to drink and drive since Uber and other ridesharing services launched.

The survey was conducted of 1,015 likely voters in Houston using live interviewers from both landlines and cellphones. The margin of error was ±3.0 percent.

Sounds impressive! Here’s a copy of the basic poll data. The question about changing the ordinance reads thusly:

Houston has more regulations on ridesharing services than any other city in Texas, which has forced some companies to cease operations. Would you support the City of Houston adopting new rules that are more like other Texas cities to increase access to safe rides?


Response           Percentage

Supports changing      72.51%

Oppose changing        12.81%

Not sure               14.68%

Crosstabs are here. I daresay that one could garner a different percentage with an alternate but equally accurate question about the issue. It’s a good starting point for Uber, but it’s just that, a starting point. How the issue is presented matters greatly, and it’s why I called the forthcoming fight over Uber and Houston’s current ordinance a public relations fight. The side that gets to define the question to be answered is the side that will win. BOR has more.

More on the Uber ultimatum

Initial reaction is not terribly receptive.

Uber

Ride-hailing giant Uber threatened Wednesday to stop operating in Houston unless city leaders amend local regulations the company said are making it tough for them to recruit drivers.

The ultimatum, the latest skirmish in what has been a contentious relationship between Uber and the city since it started operating here two years ago, drew a strong rebuke from city leaders.

“This is just not how we do business in Houston,” said Mayor Sylvester Turner, who added the city “will not compromise on public safety.”

[…]

The Uber announcement, which officials viewed as a threat to meet the company’s demands or lose the service, was met with frustration by city leaders, some of whom have grown increasingly exasperated by the tumult.

“If you don’t want to follow the rules we all agreed to, have a good opportunity in another city,” District E Councilman David Martin said. “But we cannot be blackmailed when it comes to public safety.”

[…]

Uber and its supporters argue that part-time driving for the company helps people make money while keeping rates for riders cheap.

The company in its report said drivers take an average of four months to sign up with Uber and complete the city permitting process. Houston officials said the longest a driver has waited is two months, and that the average time to clear the regulations is 11 days. About 47 percent of drivers received a license within a week, officials said.

“What they are putting out is factually incorrect,” Turner said, adding that he thought the company’s motive is to put pressure on politicians to capitulate.

See here for the background. I didn’t expect Uber’s announcement to be greeted warmly, but I am a bit surprised that no one stepped forward to defend them, or at least to criticize the fingerprint policy, in the story. CM Martin’s comment is of particular interest, since Uber’s main allies on Prop 1 in Austin are a couple of conservative Republican Council members there. I’ve look around at other coverage but have not seen any other reactions from Council members. I will be very interested to see who, if anyone, is in Uber’s corner on this. It was one thing to advocate for allowing Uber to operate here. This is a whole ‘nother level, and unless a Council member comes under pressure from constituents, it’s rather a large stretch.

The Press brings up another aspect of this fight.

Notwithstanding the curious timing (voters in Austin will decide May 7 whether to keep similar regulations; early voting for the ballot measure started this week), it’s hard to know what to make of Uber’s claims. Officials with the City of Houston insist that, by pretty much any trackable measure, Uber has been a resounding success here. The city’s Administration and Regulatory Affairs department says that every month it sees an increase in drivers who want a license to drive for the company. And, according to city officials, judging by the company’s revenue in Houston (under the regulations passed in 2014, Uber pays 2 percent of gross bookings to the city), Uber is doing quite well.

It seems there’s either fundamental difference of interpretation or someone’s not telling the whole truth. We’d love to get to the bottom of this, but here’s the problem: Uber has sued to block the city from releasing pretty much any internal data that could show whether Houston’s regulations have been a success or unreasonable burden for rideshares.

Lara Cottingham, deputy assistant director of the city’s Administration and Regulatory Affairs department, insists that Uber has had an undeniably good run here since the city began enforcing its rules for licensing drivers for so-called transportation network companies (or TNCs) like Uber, limo services and taxi companies. “The number of drivers is increasing, their revenue is increasing, everything seems to be working out for them very, very well,” Cottingham told us. “But because Uber sued us to stop us from releasing [those numbers], I can’t tell you how successful they are.”

[…]

While Uber claims it takes drivers on average four months to get a city license, Cottingham says that’s just not the case. She says that according to a survey the city conducted this spring (which, of course, she can’t release because of Uber’s lawsuit), nearly half of all drivers got their license within a week of applying – almost all (about 84 percent) had al license within three weeks of applying, she claims. Whatever the case, Uber’s Meridia said in the letter to city leaders yesterday that demand in Houston “continues to grow approximately twice as fast as our ability to onboard qualified drivers.”

Cottingham says the city has streamlined the process as much as possible, but what Uber’s really asking for – axing the city’s additional background check provision – isn’t an option.

KTRK also noted that some of the facts in dispute cannot be checked on either end. That makes this more of a PR battle than anything else. Do people, who clearly like using Uber’s service, side with them against the city and buy into the argument that needless regulation is making it impossible to operate? Or do they see the fingerprint requirement as a basic safety measure, which Uber should have no issue with complying? That seems to me to be the basic outline of the dispute, and it’s why I’m so interested in who Uber’s proxies will be in the fight. I’m sure Mayor Turner’s response to this has been along the lines of “I don’t need this $#!+ right now”. Who will be on his side? BOR has more.

An outside view on Uber in Houston

The Statesman looks at how Austin’s fight with Uber and Lyft over fingerprint requirements compares with other cities in Texas, including Houston.

Uber

Officials in Houston said they decided early on that their city, despite having almost 2,500 licensed taxis, could benefit from the emerging ride-hailing industry. So they approached Uber and Lyft a few years ago and began to try to work out a framework for operations there.

That stringent framework, including a requirement for fingerprinting, drug testing, physicals and vehicle inspections, passed the Houston City Council in August 2014, just two months after Uber and Lyft had more or less barged into Austin and set off a furor by operating in defiance of city law. At first, Houston officials say, Uber officials had nothing but praise for the new law and worked with Houston to set up procedures and a facility for licensing of ride-hailing drivers.

Lyft, however, left town. That company operates in only one place that requires fingerprinting: New York City.

The Houston law took effect in November 2014, and the city’s permitting center in downtown Houston, along with a temporary off-site location to handle an initial rush of drivers, began operations, said Lara Cottingham, Houston’s assistant director of administrative and regulatory affairs.

Drivers can get a 30-day provisional permit without fingerprinting, Cottingham said, although they do need to undergo the physical, drug test and a check for active criminal warrants. Then, within that month, the drivers would have to be fingerprinted and pass the background check to get a two-year ride-hailing license.

Getting a provisional license at the agency’s Houston office, can take as little as 20 minutes, Cottingham said. The process of being fingerprinted and getting background results from the FBI, which can be done during those 30 days after the applicant is already driving, can take three to five days, she said.

Uber spokeswoman Jenn Mullin contends that jumping through those hoops can take several weeks and that it has been a noticeable deterrent to becoming a driver for the company. That, in turn, has increased waiting times for rides well beyond the average 3-minute wait that Uber customers see in Austin, she said.

But testing this assertion is difficult. Mullin declined to provide driver or wait time figures in Houston. And the company has resisted, through the courts, any attempts by the press and public to find out how many drivers have Houston-issued ride-hailing permits.

When Uber lobbyist Adam Blinick testified in December before the Austin City Council, [Austin City Council Member Ann] Kitchen asked him why the company was resisting fingerprinting in Austin but operated with it in Houston.

“Houston has been a very difficult city for us to operate in,” Blinick said. “It requires a lot of resources. It does not scale to a good quality of service.”

So, Kitchen asked, would Uber be leaving Houston anytime soon?

“I’m not in a position to answer that tonight,” Blinick said.

That’s a question I’ve been pondering too, as you know. I feel like if Uber and Lyft win this election in August, the issue will come up again in Houston whether Mayor Turner and Council want it to or not. The article also looks at the experiences in San Antonio and Midland, where Uber backed out after an agreement had been hammered out, so go read the whole thing.

Get Me goes to Galveston

Swooping in to fill the gap left by Uber’s departure.

Galveston is close to getting app-based transportation back.

Get Me, a Dallas-based company that started serving Houston in October, has submitted an application with Galveston to provide ride services on the island, city spokeswoman Kala McCain said Monday.

Galveston has not had any competition to cabs since Uber – the most popular ride-hailing service – left the city over its decision in February to regulate the company exactly as it does taxi firms. The loss of Uber was predicted to mostly hit tourists, especially the cruise lines.

Get Me, which provides both ride and delivery services via smartphone app, has started Galveston’s application process, McCain said. Licensing is a multi-step process that includes providing detailed insurance and licensing information.

“It is my understanding everything is going well,” McCain said, saying the company could be operating in a matter of a few weeks.

Get Me is a new entrant on the scene, operating in a handful of places so far. Galveston was recently dumped by Uber, so this is an opportunity for them to come in and have this market to themselves. They have said that they will comply with municipal ordinances that mandate fingerprinting as part of the background check process for drivers, so that opportunity for them is potentially lucrative, especially if Austin rejects that referendum to repeal its ordinance. Has anyone used Get Me? I’m curious what you think, in particular how the experience compares with Uber and Lyft.

UberACCESS debuts in Houston

Good to see.

Uber

A partnership that has helped disabled people connect with a popular ride service launched in Houston at midnight.

Uber officials confirmed UberACCESS, which offers wheelchair-accessible rides for the same price as UberX, began service Wednesday. Like all Uber service, it is available via smartphone app, 24 hours a day.

“I’m thrilled to see Uber applying the same creative ingenuity to provide more consumer choices and opportunities for Houstonians with accessibility needs,” former California Congressman Tony Coelho, co-author of the Americans with Disabilities Act, said in a statement. “UberACCESS will empower people requiring wheelchair accessible vehicles to get a ride when they need one by simply pressing a button.”

The service fulfills a goal of the city’s transportation accessibility task force that helped write regulations related to allowing Uber to operate legally in Houston. As part of its suggestions, the task force allowed taxi companies and app-based companies a choice of having a set number of vehicles that were wheelchair accessible or provide service to disabled residents based on how quickly they could provide a ride.

Toby Cole, who led the accessibility committee, said the goal of both options is improved quality of service for those who are blind, wheelchair-dependent or otherwise in need of assistance.

“I am hopeful,” Cole said of the rules leading to better service. “We tried to close down as many loopholes as possible.”

[…]

In other markets where UberACCESS has debuted, the company has partnered with other firms capable of providing rides to wheelchair-bound riders. Company officials would not disclose the name of the Houston area partner.

See here for the background. The story emphasizes that the regulations for UberACCESS were agreed to by Uber and the cab companies, in addition to the disability activists. One hopes that means this will work well for everyone, and will provide a decent, cost-effective option for a greater population. If it does work as hoped, then it ought to attract the attention of Metro, since like many other transit agencies around the country it has had to deal with an increasing budget for its MetroLift service, and needs to seek less expensive alternatives to provide that.

Several U.S. transit systems looking to defray costs of providing services for the disabled are weighing partnerships with Uber and Lyft, unsettling some advocates who note that ride-hailing services have themselves faced criticism over accessibility.

Paratransit, better known under names like “The Ride,” ”Access-a-Ride,” or “Dial-a-Ride,” is required under the 1990 Americans with Disabilities Act. But the costs, which include door-to-door pickup and drop-off, can be steep.

The average cost of operating a single paratransit trip is about $23 in the U.S., compared with less than $4 for the average trip on bus or light rail. In Boston, the average cost per ride is about $45, in Washington, about $50, and in New York, nearly $57, officials said.

Transit agencies nationwide logged about 223 million paratransit trips at a cost exceeding $5.1 billion — about 12 percent of total transit operating costs — in 2013, according to the most recent data from the American Public Transportation Association. The price tag is particularly high in major cities, where agencies struggle with regular service and maintenance.

[…]

A potential incentive for riders: Uber or Lyft can be summoned immediately with an app; trips on MBTA vehicles must be scheduled a day ahead.

“My guess is it will be very appealing to people who need to go shorter distances where the fares are under $15 and they can get an on-demand ride as opposed to booking 24 hours in advance,” said Brian Shortsleeve, the agency’s chief administrator.

But convenience comes with a catch.

With a limited number of wheelchair-accessible vehicles, the ride-hailing services would be available largely to people who can walk. And while a majority of individuals certified to use paratransit fit that bill, advocates worry about creating an unfair and possibly even illegal two-tiered system for the disabled — one serving people who can walk, the other those whose needs the private vehicles can’t accommodate.

“We don’t want racial segregation, and we also don’t want disability segregation,” said Marilyn Golden, senior policy analyst for the California-based Disability Rights Education & Defense Fund.

Uber and Lyft have both cited efforts to improve offerings for disabled riders. But the services have argued they are technology, not transportation, companies, meaning they are not required to provide accessible vehicles. Advocates for the disabled have filed a handful of lawsuits.

Again, if the service works as designed in Houston, then perhaps that can serve as a model elsewhere. The first indicator will be if Metro gets in on it. I’ll keep an eye on that.

Lots of money being spent on the Austin Uber/Lyft ordinance referendum

Wow.

Uber

David Butts, meet Goliath.

Campaign finance reports filed Thursday for Austin’s ride-hailing services election show a beyond-massive lead in money for Ridesharing Works for Austin, the Uber- and Lyft-backed political action committee supporting a proposed ordinance that would become law if Proposition 1 passes on May 7.

Ridesharing Works reported that between Jan. 1 and March 28 it raised $788,750 in cash contributions and received $1.38 million in in-kind contributions, all of it from Uber and Lyft. The report says the committee spent $781,251 during that period, the bulk of it on Block by Block, a Washington company that conducted the petition drive that led to the May 7 election.

But that understates the costs already incurred. The in-kind contributions — huge consulting fees paid directly by Uber and Lyft as well as lodging, travel and staff time from both companies — were all expended before March 28 as well.

That means that, with more than five weeks left in the campaign, Uber and Lyft have already plowed $2.16 million into the Prop. 1 campaign. That already dwarfs the $1.2 million Mayor Steve Adler spent to get elected in 2014, up to now the gold standard for spending in an Austin municipal election.

The primary group opposing Prop. 1 reported raising and spending less than $15,000. Butts — a consultant who spent Thursday afternoon hammering in yard signs for the Our City, Our Safety, Our Choice political action committee — said he hopes to raise $100,000 by May 7, less than 5 percent of what the other side has spent already.

Lyft

[…]

Chelsea Wilson, a Lyft spokeswoman, said in an emailed statement that the heavy spending is necessary to avoid voter confusion about what is at stake.

“Unfortunately, the ballot language voters will see on May 7th is extremely misleading,” Wilson said, “and we will continue working to ensure that people have all the facts about this election.”

Uber contributed $387,750 in cash and made about $905,000 of in-kind contributions, including more than $450,000 on “consultant fees for campaign strategy.” Lyft made $401,000 in cash donations and nearly $475,000 of in-kind contributions.

Butts said that what Uber and Lyft are putting into the election indicates a lack of confidence that the public supports their cause.

“They see their own polls, and it obviously can’t be that great,” Butts said.

Our City, Our Safety, Our Choice reported just $12,459 in cash and in-kind contributions, and $8,560 in loans, all of that from Butts and Dean Rindy, another political consultant working to defeat Proposition 1.

That sure is a lot of money for any kind of municipal election, and that’s not even counting the cost of conducting the election, which the Trib pegs at $500K. Uber and Lyft drew a line in the sand here, so it’s not a surprise that they’re going all out to win. I’m sure they’d prefer to operate in Austin, which is as amenable a market for their services that they’re likely to find in the state, and they would like even more to make an example of it. If they get what they want here, that gives them a fair amount of leverage in other cities. Losing would also be a pretty big disaster for them. I keep thinking this issue is going to come up again in Houston one way or another. The chances of that a much greater if Uber and Lyft win this fight.

If I were in Austin, I would likely vote against this referendum. I don’t like the idea of companies overriding the normal legislative process like this, and as I’ve repeatedly said here, I disagree that including fingerprint checks is an unreasonable burden on Uber and Lyft. The existence of Get Me, which offers similar ride for hire service and which has said they will comply with fingerprint requirements, is evidence of that. That said, the void that Uber and Lyft would leave in Austin is non-trivial. Austin On Your Feet explains why tat city’s situation pre-Uber and Lyft was so ripe for disruption.

1 THE CITY (STILL) LIMITS THE NUMBER OF TAXIS
Finding a taxi in Austin when you needed one was hard. At 2:00 AM on Friday and Saturday nights (closing time for bars), throngs of downtown revelers used to line up desperately searching for cabs. Many folks had to wait until the first wave of cabs had already driven to the suburbs and back. Others gave up and either drove home intoxicated, took unpaid rides from strangers, or hired unlicensed cabs. Since Uber and Lyft have arrived, the number of people offering rides for money and the number of paid rides have both risen dramatically, showing that the demand was always there, but couldn’t be provided for with the limited number of taxis the city permitted.

2 THE CITY (STILL) FORBIDS TAXIS FROM PRICING APPROPRIATELY
Uber and Lyft vary their prices for a variety of reasons. They use sales and first-ride discounts to promote their services; they use temporary price hikes to motivate drivers to get on the road at times of high demand. Given the city-mandated taxi shortage, taxi companies could have used similar tactics to build ridership at down times and motivate all their drivers to drive at times of highest demand. Except the city doesn’t allow taxicabs to change their prices except by act of City Council. The tools that Uber uses to provide reliable service aren’t available to taxis.

3 THE CITY (STILL) LIMITS THE NUMBER OF TAXI COMPANIES
Ever wonder why, when riders and drivers both complain vigorously about the existing taxi companies, no other company came into existence and tried to lure drivers away to work for them instead? After all, Uber and Lyft are constantly fighting for each others’ drivers. The city only grants franchise agreements to three companies and limits the number of drivers for each, so they have no incentive to compete for drivers. As a member of my neighborhood association, I’ve met with people looking to start a new taxi company. Unfortunately, all their time was spent on the politics of convincing City Council members to allow them to serve customers rather than the actual logistics of serving customers. Starting a business is hard enough; starting a business that requires political approval before you are allowed to operate is a step too far for most people.

4 THE CITY (STILL) FORBIDS OTHER COMPANIES FROM OFFERING ANYTHING THAT EVEN VAGUELY RESEMBLES A TAXI RIDE
With the city-mandated taxi shortage, you might expect people to get more rides from slightly differentiated services like prearranged ride companies (called limousine service, but not limited to stretch limos). However, the city code includes many rules with no conceivable consumer benefit. For example, limo services are forbidden from charging less than $55/hour, must wait half an hour before providing service, and must keep trip tickets proving both of those facts.

That’s a terrible status quo, and as someone who supports efforts to enable people to live without (or with fewer) cars, having convenient options like Uber and Lyft are necessary. I don’t envy anyone the decision they have to make for this. Mike Dahmus and Austin Teacher Dad, both of whom will vote for Prop 1 but for different reasons, have more.

Lubbock to consider rideshare ordinance

You know what that means.

Uber

Uber drivers may soon be required to have background checks and operational permits in the city of Lubbock, a move that in the past has prompted the company to pull out of some Texas cities.

Uber is a technology company that provides a mobile phone app connecting riders with drivers. The company launched in Lubbock in late June 2014. With Uber’s app, riders can ask a driver to pick them up and take them where they need to go, with all transactions done over the phone.

Councilwoman Karen Gibson has been working with city staff to update the city code of ordinances to account for ride-sharing companies like Uber and Lyft, which she said have been operating illegally in the city since their inception.

It’s an issue officials at Lubbock Preston Smith International Airport say they also hope to tackle, as Uber drivers currently aren’t being asked to follow the same rules as licensed cab and limo services, said Kelly Campbell, administrative director at the airport.

After multiple discussions since stakeholders — including representatives from Uber, local taxi companies, police and city officials — first met in July 2014, Gibson said she intends to introduce an amending ordinance at the second City Council meeting in April that puts similar restrictions on transportation network companies as to those already placed on local taxi and limo companies.

“It’s more of a blanket ordinance that encompasses everybody. If they want to operate under that blanket, they will be able to operate here,” she said. “This is necessary for public safety. We live in a college town, we’ve got moms and dads in Dallas sending their daughter here and they expect us to make sure it’s safe.”

[…]

The city’s code states taxi and limo drivers must apply for an operator’s permit, furnish the city a sufficient performance bond, make sure the car is inspected, have a background check and minimum liability insurance of $50,000.

The amended ordinance will place transportation network companies like Uber and Lyft under the same guidelines as the other businesses.

“We’ve been following everything from coast to coast that’s been going on with these new market models,” Harris said. “We’re trying to find out a good way to address those types of industries within our code and allow them to operate, basically, legally.”

A spokesperson for Uber declined to comment to A-J Media until the company is able to review the ordinance.

But looking at cities that have passed similar regulations, Uber’s typical response has simply been to leave.

See here and here for more on the places Uber has recently abandoned. Of interest here is that the word “fingerprint” doesn’t appear anywhere in this story. That’s been a point of conflict in other cities, but it’s not the only one. In the first link from that previous sentence, I solicited a statement from Uber that said they had “made the difficult decision to cease operations in every city that has adopted new laws that require similarly​ duplicative r​egulations on drivers”, which was a reference to the Houston ordinance. They cited “Beaumont, San Marcos, College Station, and Abilene” as the cities they want others to emulate. That doesn’t sound like what Lubbock is doing, so we can expect Uber to respond as they have in cities like Corpus, which is to say they will close up shop. (Though now apparently COrpus is reconsidering.] We’ll see how it goes.

Two more places that Uber won’t operate

Goodbye, Galveston.

Uber

Just days after the City Council passed an ordinance designed to regulate transportation networks, Uber has shut down its service in Galveston.

Monday evening, people in Galveston who tried to use the phone app to order a ride received a message that Uber is no longer available in Galveston

“Due to new regulations passed by Galveston City Council, Uber is no longer available in the city,” the message says. “We hope to resume operations in Galveston under modern ridesharing regulations in the future.”

The council passed those regulations on Thursday.

The rules require that ride-hailing companies apply for operators’ licenses from the city, and require the company’s drivers to apply for chauffeurs’ licenses.

As part of the licensing procedure, drivers have to go through a background check that includes a federal fingerprint analysis.

Uber has objected to cities, including Austin and Houston, who require fingerprint checks from its drivers. In other cities, the company claims that its business model does not allow for the time required to conduct such background checks.

“These new regulations will make it difficult for partners to earn extra money on a flexible schedule and create barriers to entry instead of improving access to reliable transportation options such as ridesharing,” Sharraz Maredia, the general manager of Uber Houston said in an message to drivers sent on Monday evening.

KHOU and the Chron have more coverage on this. I had seen a blurb on this a few days ago when Galveston City Council passed their ordinance, but it was behind a paywall so I didn’t know any of the back story. I did not expect this reaction to the ordinance, but all things considered I should have.

See ya later, Midland.

The rider-sharing sic company Uber has told potential customers it will no longer provide service in Midland County.

[…]

“Uber gives municipalities an ordinance and says pass this or we will leave,” said District 4 Councilman J.Ross Lacy on Monday night. “It is becoming an ongoing battle with cities in state of Texas that they don’t want to follow same rules as someone else.”

Lacy expressed disappointment with the result. He said he personally worked hours on negotiations with Uber. In December, City Council passed the second reading of an ordinance that Lacy said featured work from those negotiations.

[…]

“They (Uber) will not agree to terms of the ordinance because they don’t want to set a precedent,” Lacy said. “I worked a long time and had a handshake agreement, and for them to come back after the fact is disappointing. I negotiated in good faith. They didn’t.”

The Midland ordinance included allowing transportation network companies (TNCs) like Uber to conduct their own background checks, which last I looked was a big deal for them. I don’t know if there was more to this story than what this report has, but if these rules were unacceptable them, I don’t know what they would accept. They’re really making the case for statewide regulations for TNCs, which is not a position I ever expected to support.

And here’s another reason to want to get this fight out of the local arena.

A group shrouded in mystery failed to deliver on its promise of a political blockbuster on Monday, in the process digging up new questions to pile upon a tall stack of older unanswered ones. After teasing a big announcement late last week, the group – known as Austin4All – declared that it had gathered enough signatures to force City Council Member Ann Kitchen into a recall election. However, as of Monday evening, the group hadn’t submitted its petition to the city clerk.

Austin4All’s co-directors, Rachel Kania and Tori Moreland, did not respond to an email from the Austin Monitor asking when – or, indeed, if – they plan on turning the petition in. In earlier messages, they explained that they were both in Iowa for the presidential nominating caucuses on Monday night.

The recall effort is purportedly a reaction to Kitchen’s attempts to tighten regulations imposed on transportation network companies such as Uber and Lyft. Austin4All’s petition is a separate venture from another petition that aims to bring the regulations to a voter referendum. After announcing that they had collected enough signatures, the organizers of that effort quicklydelivered the petition to the Office of the City Clerk.

If Austin4All’s boasts prove to be true, Kitchen will have five days after verification of the signatures to resign or to face a recall referendum as early as May.

[…]

Austin4All’s existence may predate the city’s new system of geographical representation. In 2014, a group with the same name conducted a petition drive whose aim and organizers raised questions.

The Monitor found documents from January of that year showing that an Austin4All incorporated in Hays County as a 501(c)(3) nonprofit – which are forbidden from participating“in any campaign activity for or against political candidates.” When asked on Monday whether that was the same group, Moreland said, “We had no involvement and cannot speak to any affiliation.”

There are no other records of another Austin4All, let alone one that is filed as a political action committee, as the group appears to claim to be. According to campaign finance rules, any group that spends more than $500 must report the expenditures. As of the most recent filing deadline, no such records exist.

Kitchen said that she views the recall effort as an attack on her constituents, who made Kitchen one of only two Council members who were elected without having to face a runoff. “Now they’ve got someone from the outside,” Kitchen told the gaggle of press outside City Hall. “They don’t know who’s funding it, they’re telling lies throughout the neighborhood, they’re not identifying themselves. So it’s really a threat to the people of District 5 who have the representative that they chose. And I think it is a horrible precedent for this new system that we have and a threat for the entire city.”

Yeah, who doesn’t love a faux-“grassroots” organization with secret donors led by a couple of political pros (Moreland and Kania have ties to Ted Cruz and Rand Paul) coming in to try to overturn an election? Spare me. I’ll say again, I believe that there is an needs to be room for innovation in the vehicles for hire market, and that cities should find a reasonable way to allow such companies to operate. But by the same token, those companies need to actually abide by the legally enacted ordinances, and they need to accept that some oversight is necessary for the process of doing background checks on their drivers. Fingerprint checks aren’t the be-all and end-all, but they’re perfectly sensible in a way that “take our word for it” isn’t. I still don’t want to see a one-size-fits-all approach from the Legislature, but a law mandating some minimal requirements that includes fingerprints or the equivalent is something I do support.

In any event, the Travis County Clerk has certified the petitions to overturn the Austin ridesharing law on the ballot. City Council there will vote on that next week – they could simply ratify the alternate ordinance put forth by the petitioners or possibly some “compromise” ordinance that everyone can agree on, or it goes to the voters. That will make the month of May a lot more interesting around here. The Trib has more.

Another Uber lawsuit update

Looks like we are headed towards a jury trial soon.

Uber

U.S. District Judge Vanessa Gilmore has denied Uber’s request for summary judgment and rejected parts of the company’s motion to dismiss.

“This court has found that the question of the literal falsity, or allegedly misleading nature, of Uber’s representations is a question of fact to be determined at trial,” the judge’s 53-page order filed on Dec. 18 said in explaining why she was rejecting the company’s efforts for summary judgment.

On the motion to dismiss, the judge said slogans such as “safest ride on the road” and “background checks you can trust” are general statements that can’t be measured and amount to “non-actionable puffery.” The same goes for a glowing 2014 online evaluation of Uber’s services from former New York City Mayor Rudy Giuliani, a company safety consultant, who clarified that he was offering his opinion.

Lyft

But, the court determined that some company representations amounted to “cognizable” claims under the federal Lanham Act, which covers false advertising and is named after the late Texas Congressman Fritz Lanham. Those included a 2014 blog entry by Uber’s head of communications for North America that Gilmore decided “was clearly intended to lead and could lead a reasonable consumer to believe that an Uber ride is objectively and measurable safer than a taxi ride.” The judge viewed company representations about the “Safe Rides Fee” as well as media statements about the superiority of Uber background checks over those required for taxi drivers in the same light.

Gilmore said the plaintiffs also can proceed on an unfair competition claim under Texas law.

See here for the background. I have no idea how this will go but I can’t wait to see how it gets resolved.

Austin versus San Antonio on ridesharing

The Current reviews the state of play.

Uber

In the spring of 2014, Lyft led the way in Austin, but the company launched without city approval and was eventually banned, along with Uber, which launched in the capital a short time later. Roughly a year ago, Austin’s city council eased its fight, allowing ride-hailing companies to operate. Last week, Austin policy makers approved requiring drivers to pass finger-print based background checks. Now Uber and Lyft are warning that they may cease operations in the city.

Sound familiar?

Lyft

Around this time last year, city council amended its vehicle-for-hire ordinance to include regulations for Lyft and Uber. Part of the new rules meant that drivers needed finger-print based background checks. So the companies threatened to leave the city, and followed through about three months later. That move came two months before a mayoral election, and bringing the companies back became a regular campaign talking point.

However, over the summer, San Antonio’s city council worked out a compromise with the companies: a 9-month pilot program with a driver option for finger-print based background checks that provide those who pass with a city-certified badge in the ride-hail applications. Lyft immediately agreed to return when city council narrowly approved the pilot program in August, and Uber returned in October.

See here for some background on San Antonio, and here for some on Austin. As the story notes, it’s unclear what will happen when San Antonio’s pilot program, in which fingerprint background checks were an option but not a requirement, comes to an end. I suppose that will depend in some way on how things play out in Austin, whether Uber and Lyft make good on their threat or if Austin’s City Council blinks. Remember, there’s another player in this, which is Get Me, and they have agreed to abide by the fingerprint requirement. They may wind up with the Austin market to themselves, and who knows what effect that could have. I will note that Houston has a fingerprint requirement, and Uber has chosen to stick it out here anyway. They claim to be thriving here, which seems to me to undermine their argument that having fingerprint background checks is a dealbreaker for them. Whatever else happens, all this strongly suggests to me that we will see another attempt to pass a law setting regulatory guidelines for transportation network companies in the 2017 Legislature. What we have now isn’t politically stable for the long term.

Austin passes new vehicles for hire regulations

It’ll be very interesting to see how this plays out.

Uber

Defying implied threats that such a vote would chase Uber and Lyft out of town, the Austin City Council late Thursday put into city statutes mandatory fingerprint-based background checks for ride-hailing drivers.

But the move will not immediately empty the streets of transportation network company drivers. The ordinance, approved on a 9-2 vote with Council Members Ellen Troxclair and Don Zimmerman opposed, would not take effect until Feb. 1, and it phases in the fingerprint requirement in four steps. The companies, subject to further action by the council, would not have to do the checks on any of their drivers until well into the spring.

Still to come, perhaps as soon as late January, yet another transportation network ordinance that would outline what council members call “incentives” and “disincentives” to encourage the companies and their thousands of drivers to undergo the fingerprint checks.

What might those perks and penalties look like? Adler suggested both more money per ride for drivers who are fingerprinted, or offering them better locations for pickups at big events like the ACL and South-by-Southwest festivals. The specifics would be crafted as part of a separate ordinance the council hopes to pass in late January.

“This is taking an aspect of what is happening in San Antonio” where drivers can volunteer to be fingerprinted and shown as such on apps, Adler said, “and trying to put it on steroids.”

Lyft

[…]

Both companies have issued thinly veiled threats to cease Austin operations if the fingerprint requirement becomes law.

Under the earlier city ordinance, Uber and Lyft have been able to conduct the name-based criminal background checks that they prefer. They say that process, which requires little more from the driver other than providing a name, Social Security number, driver’s license and a few other pieces of information, maximizes the number of drivers and thus available cars on the street. (Lyft also conducts an in-person interview.)

The changes announced Thursday met with poor reviews from the companies.

“We haven’t had time to fully examine the details,” Uber spokeswoman Debbee Hancock said in an email Thursday afternoon, “but it appears the only substantive change is the implementation date is now after the next election. Similar to earlier proposals, these rules reflect a fundamental misunderstanding of how drivers use ridesharing platforms and the safety features inherent in our app.”

A third player in the market, Get Me, began providing rides Tuesday in Austin and has just 60 drivers at this point, the company said. Get Me officials have told Council Member Ann Kitchen that they will comply with fingerprint requirements.

See these Statesman stories for the runup to this. I have a hard time believing that Uber and Lyft will actually pull out of Austin, where I’m sure they do a lot of business. Good move by Get Me, which recently entered Houston and Dallas to pipe up that they’ll follow the new law – I’m sure they’ll be delighted to show Uber and Lyft out if it comes to that. I’m sure the two big boys will do what they can to put pressure on Austin City Council to ease up – they’re already doing that now, in fact – and they may well succeed. They’ve got the Austin police chief and Travis County Sheriff on their side because of their claims to reduce drunk driving, a phenomenon that has been observed elsewhere. The new regs are being phased in, so there’s plenty of opportunity for brinksmanship and one-upping. I can’t wait to see how it plays out. The Trib, BOR, and Newsdesk have more.

Update on the cab companies’ lawsuit against Uber and Lyft

Yesterday I noted the latest lawsuit against Uber, filed in San Antonio by a former Uber driver who alleged that their pay amounted to a sub-minimum wage total. Over the weekend we got an update on the lawsuit filed here last April against both Uber and Lyft by various cab companies.

Uber

The federal lawsuit in which Houston and San Antonio taxi companies accuse Uber and Lyft of a digital disruption that upended cab markets has dwindled to just a few claims.

But the case, which continues on unresolved safety inequity allegations, has forced Uber to do what other court filings across the country have not: Reveal detailed information about trips and drivers that the company previously argued were trade secrets.

The ride-sharing company, as well as the taxi firms, recently turned over 18 months of financial data, according to court filings.

[…]

Lyft

The original lawsuit, filed in April 2014, claimed that the companies unfairly competed with the taxicab industry by failing to comply with local regulations and misrepresenting the nature of their services to customers.

Houston revised its rules in November 2014 to establish a process by which the new companies could operate legally despite ferocious opposition by entrenched local taxi drivers and companies. Unlike many cities, Houston’s permitting process requires fingerprint background checks and vehicle inspections for ride-sharing drivers, which exceeds Uber’s requirements. Lyft opted not to comply and exited the market that month. The company was terminated from the lawsuit in August.

This March, U.S. District Judge Vanessa Gil-more dismissed all of the taxi companies’ claims except for allegations related to false advertising – namely Uber’s assertions to the public about its insurance coverage.

Now, the plaintiffs and Uber have set aside their disagreement about insurance coverage but remain in a narrow conflict about safety.

An order signed by Gilmore in late October continued the lawsuit on “Uber’s alleged representations related to safety and background checks” including to the extent that “insurance is relevant to the alleged safety representations.”

[…]

The remaining plaintiffs in the case include the companies that own Yellow Cab in Houston and San Antonio as well as Fiesta Cab Co., Houston Transportation Services, Pasadena Taxi and Enterprise Transportation.

In a joint status report, the parties said they have exchanged data about trips and income.

“Uber has produced financial information detailing monthly net revenues and expenses broken down by category and trip volume from its operations in Houston and San Antonio from February and March of 2014, respectively, through August of 2015,” the report said. The plaintiffs handed over similar data. The parties are conferring about how to understand and analyze the information.

See here and here for the background. I was pretty skeptical about this lawsuit when it was filed. Whether that was justified or not is debatable, but at this point most of the original issues have been resolved or dismissed, and this is what’s left. I suspect that the plaintiffs in other legal actions against Uber and Lyft will be interested in these proceedings when all is said and done.

A new Uber competitor enters the scene

Here’s Get Me.

Less than two years after Uber disrupted Houston’s taxi market – with most of that time spent largely competition-free – the company now finds itself the established player facing upstart competition.

Get Me, a Dallas-based company that launched in North Texas in August and Austin earlier this month, is scheduled to start serving Houston on Thursday.

The company, similar to Uber and others in that it connects clients and drivers via a smartphone app, offers rides for people and the delivery of goods.

In the company’s parlance, it is providing something or somewhere, said Jonathan Laramy, Get Me’s co-founder.

“We built around those SOS moments,” Laramy said this week from Las Vegas, where the company will launch next month. “We all have these different scenarios where we’re having people over and need something, or you have an emergency and need to get somewhere.”

Every driver who accepts passengers will comply with the city’s regulations regarding paid rides, company officials said. Many drivers who have signed up so far are already approved because they are joining Get Me after stints as Uber drivers, Laramy said, and will likely work for both organizations.

“They should do whatever works best for them,” he said. “The drivers deserve to earn a fair wage. If that’s with us, great.”

[…]

Meanwhile, many Uber drivers have grown increasingly frustrated with the company, especially former cabdrivers that jumped to Uber’s black car service.

A recent increase in the company’s share of each trip’s cost – to 28 percent from 20 percent – irritated drivers, though the increase only applies to new drivers.

Others have complained an oversaturation of drivers has made it more difficult to make a living, pitting the full-time UberBlack drivers against the part-time UberX folks. UberBlack drivers organized in August at Bush Intercontinental Airport, and have had preliminary discussions about striking.

In Houston, Get Me is feeding off uncertainty about the deal drivers have with Uber.

“We love Uber, they paved the way for this crowd-sourcing economy with the other (companies),” Laramy said. “But when we got into this we came in and said ‘Can we make this work for the driver, so it’s something they want to do?’ What we found is you can maximize the amount of money from a driver’s perspective over the course of an hour.”

This helped inspire the “something or somewhere” model, Laramy said. By adding deliveries, drivers need not rely solely on carrying passengers to make money.

Get Me, working out of a trailer in a parking lot on Washington Avenue, has 300 drivers signed up, exceeding its goal of 100 before Thursday’s Houston launch.

Here’s their webpage and Facebook page. What’s good about this is that it gives the drivers some options, which is the best way to make their experience better. Uber is pretty pervasive here, so I don’t know how successful they’re going to be at attracting riders, and that’s ultimately what matters. But hey, if competition was good when Uber entered, it’s good when someone other than Uber enters. I wish them well.

Uber and Lyft versus fingerprints

They prefer to do their own background checks, which of course do not require fingerprint checks.

Uber

Houston, San Antonio and Austin currently take different approaches to a key regulatory issue: whether vehicle-for-hire app drivers must undergo fingerprint background checks.

The issue has proven pivotal to Uber and Lyft in Texas. Lyft refuses to operate in Houston, where fingerprint checks are required. Uber isn’t currently available in San Antonio, which has a voluntary fingerprinting program. And both companies are worried that Austin is about to become a lot less hospitable.

“Don’t fix what’s not broken,” Uber Chief Adviser David Plouffe urged Austin leaders at a press conference Monday. “This is working. It’s delivering jobs and it’s delivering important transportation to people that have had a hard time getting it.”

Last October, Austin passed a temporary ordinance allowing vehicle-for-hire apps to operate legally with few restrictions. A year later, Austin City Councilwoman Ann Kitchen is leading an effort to tweak the city’s rules, including requiring fingerprinting drivers so the city can conduct more comprehensive background checks than the companies do.

[…]

Lyft

Uber and Lyft collectively operate in more than a dozen Texas cities, most relying on the companies to handle background checks on drivers. Officials with both companies have said fingerprint requirements are too burdensome. Drivers working fewer than 20 hours a week are critical to the reliability of their services, they say, and requiring them to visit an office to be fingerprinted dissuades many from signing up.

In an email to Austin customers Tuesday, Uber called Kitchen’s proposals “toxic.” Lyft has said it “could jeopardize the future of ride-sharing in Austin.”

“What Austin did last year was really one of the most forward-looking approaches to ride-sharing,” Plouffe said. “This would be a surprising place to take a huge step backward when so much of the regulatory discussion in the U.S. has moved forward.”

Neither Uber not Lyft officials would say for certain what they will do if Austin adopts a fingerprinting requirement. Their recent experiences in Houston and San Antonio show different approaches to the issue.

Houston is one of Uber’s only markets in which its drivers have to undergo fingerprinting. Lyft pulled out of Houston nearly a year ago.

“We do not operate in any market that requires drivers to be fingerprinted,” Lyft spokeswoman Chelsea Wilson said.

Though Uber is still available there, the company isn’t exactly thrilled with Houston’s policy. Uber has more drivers in Austin than much larger Houston “due to the excessive regulations the city has enacted,” spokeswoman Debbee Hancock said. Over the past year, the company has pulled out of other cities that launched fingerprint requirements “in large part because of our experience in Houston.” She declined to say why the company is still operating in Houston.

I figure there are four possible outcomes here. In ascending order of likeliness:

1. Uber and Lyft pull out of Houston, San Antonio, and Austin, because they just don’t care for the regulatory requirements and they can’t get any changes made either in the cities or the Lege.

2. Uber and Lyft accept the status quo and quit trying to change things, staying in the cities they’re in but not going to cities where they’re not.

3. Uber and Lyft manage to come to an accommodation with these three and other cities, and expand where they don’t exist under rules everyone has agreed on.

4. Uber and Lyft manage to convince the Lege to pass a bill that accommodates their preferences and overrides local rideshare ordinances.

You can see why I ordered them that way. Unless #3 happens, I expect a much bigger effort to get a bill similar to the one Rep. Chris Paddie introduced in this last session passed. Anyone see this happening differently?

Uber update, part 4

Here’s the last installment of the Chron/Al Jazeera analysis of how Uber is operating in Houston. Most of the story is about what parts of town have better service from Uber – short answer, inside the Loop – and how Uber is attempting to improve service in parts of town that have not been well served by cab companies in the past, a subject we have discussed before. It’s the section at the end about service for disabled riders that I want to focus on.

Uber

Uber gives drivers information about how best to serve blind and hearing-impaired riders, and it caters to people with service animals and elderly patrons with special needs. In many cases, a collapsible wheelchair can be accommodated.

Hancock, however, did not provide a single example of an Uber vehicle in Houston that can accommodate a non-collapsible wheelchair.

Technically, as independent operators using Uber to solicit rides, the drivers are individual providers, and Uber isn’t required by federal law to have wheelchair-accessible vehicles. Cab companies, however, are.

That disparity frustrates some disabled riders, who want the same cheaper and convenient options for rides.

“Let’s say McDonald’s, they don’t own any of the restaurants themselves, but they have franchises. Those franchise owners have to comply with law,” said Michelle Colvard, a Houston resident who uses a wheelchair.

City officials asked Uber to participate in discussions about how to serve disabled riders. Cab companies also had a slot on the task force, along with Lyft, an Uber competitor that remained on the task force even though it is not operating in Houston.

“We started from a difficult place,” Toby Cole, a disability rights advocate who led the task force, told City Council members in August. “There was a huge amount of mistrust between the community, the representatives of the transportation companies and a mistrust of the process.”

After months, the task force settled on proposed regulations that let cabs set a minimum number of wheelchair-accessible vehicles in their fleet, which grows over time, depending on the size of the company. Uber and similar companies, meanwhile, can elect to meet disabled access standards based not on how many vehicles are available but how quickly they can respond to a ride.

Uber most likely would provide service by contracting with another vendor to handle its calls related to disabled clients. The company has a similar arrangement in Austin.

Cole, who called the task force recommendations a “workable solution,” said having rules is just one part of a better system for disabled riders. The rules will not take effect until the City Council approves them.

“Enforcement is one of the strongest areas we need from the city,” he said, responding to a question about Uber’s checkered history following Houston’s rules. “Without enforcement, these regulations mean nothing.”

See here and here for the other installments. I did not know that there was a task force working on this issue – Uber rolled out a solution for riders with disabilities a year ago, so it will be interesting to see what these new regulations are. There’s still a federal lawsuit pending against Uber (and Lyft) over access for disabled riders. I have to think this task force had an eye on that as they crafted the new regulations. We’ll see how that goes. In the meantime, I completely agree that enforcement is the key. That’s an issue that the city struggles with sometimes, so let’s keep watch on that.

Uber update, parts 2 and 3

Driving for Uber is a tough way to make a living.

Uber

One hundred job applications and still nothing. Jennifer Cantrell, 34, partway through a master’s degree in social work, had depleted her savings and needed a new plan. Through Facebook, she found out about someone subleasing cars to prospective drivers for Uber, the smartphone-based ride service.

It seemed promising: She had a license and was willing to learn the road. Uber offered freedom and flexibility, she’d heard, and an annual full-time income of $90,000. So Cantrell leased a car and signed up.

Yet after several months of working as much as 70 hours a week, she found herself in the red, not only with the owner of her new Toyota but with her landlord as well. Her weekly earnings statements looked decent on their face – after Uber’s cut, around $400 for 35 hours – but she’d somehow be left with just $100 a week once she figured in gas and the lease.

Uber likes to boast that its casual, affordable service is powered by part-time drivers seeking work “outside the 9 to 5.” That sounds like a convenient sideline for people like Cantrell: a cooler, more middle-class population than is usually drawn to taxi driving. For Cantrell, though, Uber became a full-time job that paid less than the minimum wage.

Other Uber drivers interviewed in Houston and elsewhere, speaking on condition of anonymity because they feared retribution from Uber, cited problems including pressure to provide costly amenities or to accept too many passengers in order to get good customer ratings. One driver said immigrants who drive for Uber tend to draw lower ratings.

Others, mostly part-time drivers with other sources of income, said their Uber experience had been positive. Uber maintains most of its drivers are part-time.

“You have to find what works for you,” said Lateefah Eburuche, who lives and drives part-time from the Third Ward, near the University of Houston.

Eburuche said Uber gives her flexibility so she can go out of town for trips related to her clothing design business.

“To me, Uber was the perfect answer for the convenience,” she said.

[…]

Uber requires drivers to get a license and to use their personal cars, so long as they meet certain minimum standards: a 2008 model or newer, four doors and under 150,000 miles.

Drivers like Cantrell can’t afford to buy an Uber-compliant vehicle and thus resort to formal or informal leases. Uber itself offers vehicle discounts and financing options. Last year, Uber was criticized for partnering with Santander Consumer USA, a leasing giant investigated by the Department of Justice for illegally repossessing vehicles from military personnel.

“I have seen [Uber] try to finance cars for other people, and I’m like, ‘That’s a disaster. Don’t do it,’ ” Cantrell said. “They offer new drivers these subprime auto loans, to pay over $200 a week on their car note while the car depreciates like crazy.”

[…]

On each ride, a passenger chooses a rating between one and five stars, with five being the best. But, drivers say, anything less than a high four average can undermine their ability to get rides.

Such basics as the cost of a fare are similarly unpredictable, Uber drivers say. One Houston driver recalls starting with the company at a rate of $2.50 per mile in 2013, “but eight months later, it was $1.89 and last November, $1.10 a mile,” said the driver, speaking on condition of anonymity for fear of retribution. “Now, to make $200, I need to stay on the app for 15 hours.”

Houston’s current base Uber fare of $1.10 per mile can “surge” to as much as 10 times the regular amount in certain locations during periods of high demand. By offering this boost in fares through driver alert emails and text messages, Uber nudges workers to meet the increased passenger load of the Houston Livestock Show and Rodeo, large conventions and sporting events.

There’s another incentive: “guarantees,” or minimum hourly rates paid to drivers who meet certain conditions.

In general, these surges and guarantees pull drivers into downtown and central Houston, the eight neighborhoods identified by Uber’s technology as having consistently high demand. But when Uber vehicles crowd into these zones in search of higher pay, supply sometimes exceeds demand. A driver may “chase a surge” only to find, upon his arrival, that the area is no longer hot. And those trying to meet the requirements of guarantees may find it difficult to snag the requisite rides-per-hour.

It’s been rough on cabbies, too.

Houston and other big cities have long debated how best to manage vehicles-for-hire. Are taxis private or public transportation, free-market animals or creatures of the state?

Cabs were first licensed during the Great Depression, when thousands of unemployed men flooded the industry, spurring violent competition. City by city, regulators set qualifications, normalized rates and issued permits or medallions to limit the number of cars on the road. Some drivers became owner-operators, while others were company employees paid wages per shift.

Since the 1960s, waves of deregulation and re-regulation have buffeted the industry. Deregulation in the late 1970s and ’80s created real competition, variable fees and new services. On the other hand, deregulation meant that drivers were converted from employees to independent contractors, depriving them of the rights to a minimum wage, overtime and collective bargaining.

Many U.S.-born drivers sold their permits and quit the industry. New immigrants have since taken their place – but mostly as leaseholders. They pay rents to garages that in turn funnel money to permit-owners with hundreds to their name. A study of the Houston taxi market found that “a driver working long hours could be expected to average $210 to $240 per day driving his cab.” Nationwide, the average, full-time taxi driver earns just $23,000 per year.

[…]

In cities such as Houston, Austin, Philadelphia, San Francisco, Los Angeles, San Diego, Chicago, Washington, D.C., New York and Boston, taxi drivers and worker organizers are playing defense. For decades, they’ve wrangled with medallion- and garage-owners; now, all eyes are on Uber.

“Oversupply – Uber’s economic model depends on that,” said Bhairavai Desai, leader of the National Taxi Workers Alliance, an informal union.

Ebrahim Ulu, president of the United Houstonian Taxi Drivers Association, understands a driver’s desire to go with Uber and escape the clutch of traditional taxi companies.

“But what did Uber do in every city?” he said. “They didn’t improve permits or driver conditions.”

In 2013, the association sent Houston a 22-page document listing grievances – lack of time off, abuse by lease owners, poverty-level income – that it says reveals the “slavery” of the lease-to-drive structure. It proposed that the city grant new permits to individual drivers for the purpose of forming a worker cooperative that would offer protections and benefits to owner-employees.

Nothing ever came of this proposal. In taxi-industry time, 2013 is ancient history. Back then, neither the city nor the UHTDA foresaw the effect Uber would have on Houston and beyond.

See here for part one. Both stories are basically anecdotal evidence, so one should be hesitant to draw broad conclusions. The complaints about oversupply are understandable given Uber’s intent to recruit more drivers here, but if it really is the case that its drivers can’t make decent money, that’s going to be hard for them to do. As for Uber’s drivers, the best thing that could happen to them may be for Lyft to be lured back to town, as this would provide competition for their services and a catalyst for their per-mile rates to increase. What might be done to help out cabbies that are having a hard time paying their leases is a harder question, and I have no ideas offhand. Again, this is a subject that maybe the Mayoral candidates should be asked about.

Uber update, part 1

The Chron, in conjunction with Al Jazeera Americas, gives the first of what should be a four-part look at how Uber is doing in Houson.

Uber

Less than a year after Houston began regulating so-called transportation network companies, questions persist about safety assurances from Uber, the city’s sole entrant in the field. Uber is testing local officials’ good graces by criticizing the rules it agreed to follow and lobbying for the state to supplant them. In certain instances, Uber has failed to abide by rules that Houston changed to accommodate the company.

Some drivers, meanwhile, say Uber is squeezing them, saturating the market so it’s impossible for most to make a living wage.

“They want to own Houston, and they will,” said one driver, who asked not to be identified because she feared the company would disable her account. “But those of us out here, doing the work… we won’t see a dime they don’t want us to have.”

Yet none of the company’s problems – not even the highly publicized case of a driver accused of sexually assaulting a passenger in Houston – seems to have dented its popularity.

“I use it everywhere,” said Sami Tamska, 30, who moved to Houston last year. “Here, Dallas, whenever I go anywhere. It’s all the same.”

The enthusiasm of customers like Tamska suggests that Uber is likely here to stay. What remains to be seen is how the rules of the road will continue to evolve for the company, and what that will mean for consumers.

“Innovation has gotten out ahead of the public policy environment,” said Susan Shaheen, co-director of the Transportation Sustainability Research Center at the University of California-Berkeley. “Things haven’t changed in 100 years in this industry, and suddenly, it’s changing rapidly, and I think everyone is still figuring out what that means.”

That includes city officials in Houston, who went through a rigorous process to try to assure customer safety without stifling innovation. Rather than accept Uber’s background checks, the city demanded drivers go through the same, more rigorous process as cab drivers.

Less than six months into the new system, Uber acknowledged hundreds of its drivers were not licensed to drive in Houston and were removed from the platform only after an unlicensed driver with a federal prison record was accused of sexually assaulting a passenger.

[…]

In Houston, at least for now, Uber is undercutting cab prices. A typical ride from Bush Intercontinental Airport to downtown in a taxi could top $60, compared to around $40 in UberX, the company’s least-expensive option. Taxi fares, however, are standard and predictable, while Uber often increases its rates when demand is highest.

With Uber’s entry, on top of 2,446 permitted taxi cabs, the number of people offering rides for money is unclear. Uber, via court filings, has resisted public release of information on how many trips it has provided or its number of drivers, calling the data a trade secret.

“It’s safe to assume there are thousands (of drivers),” said Duane Kamins, owner of Lone Star Cab Company, part of a legacy industry that lobbied hard to prevent Uber’s entry into Houston.

It’s a good story, though I can’t say I learned a whole lot of things I didn’t already know. Given that this is the first part of a four-part series, here are some topics I’d like to see explored in the others:

– San Antonio has revisited its vehicles for hire ordinance, as its original version caused both Uber and Lyft to leave town. Lyft has since promised to return there, but it does not operate in Houston as it did not care for Houston’s background check requirements. Does anyone on either side regret Lyft not being here? Do any of the Mayoral candidates think revisiting Houston’s ordinance is a good idea?

– There was an effort in the Lege last session to create statewide regulations on vehicles for hire, which would have overridden city ordinances, at least in its initial form. One can reasonably expect a similar bill to be filed in 2017. What if anything did the city of Houston do to affect the outcome of the 2015 bill, filed by Rep. Chris Paddie? What if anything would the Mayoral candidates do in 2017 when the next such bill gets filed?

– How much business have the cab companies really lost, and how much of Uber’s business here in town is new users? How does this compare to other Texas cities?

– Uber drivers in Dallas recently went on strike to protest new rules promulgated by Uber about fares for UberBlack drivers. What do Houston UberBlack drivers think about this? What if any role should city regulators play in such disputes?

– Is there any local data to corroborate or refute recent claims that ridesharing companies have a positive effect on DUI homicide rates? I know it’s way too early to draw any conclusions, I’m just looking for anecdotal evidence.

What questions would you like to see examined?

Uber wants to add more drivers here

An Uber surge is coming.

Uber

Eighteen months after launching in Houston, Uber, the popular ride-sharing service known for its conflicts with regulators, plans to add 5,000 drivers in the area over the next year.

Uber leaders, staff of the nonprofit Change Happens and local NAACP leaders on Thursday are expected to announce a partnership aimed at recruiting drivers, especially in underserved areas where the new hires might fill a growing demand. The announcement will be at the nonprofit’s headquarters in the Third Ward.

“Our driver-partners live all over the city,” said Sarfraz Maredia, general manager of Uber Houston, which claims to have provided 3.5 million rides to more than 1 million users in Houston. “We’re seeing demand throughout the city grow. … The partnership is focused on economic empowerment in the city, creating incremental opportunities.”

[…]

Uber representatives said they were pleased that wait times in the Third Ward, a predominantly poor, African-American neighborhood in southeast Houston, averaged seven minutes. This is slightly longer than typical waits in high-traffic areas such as the central business district and Montrose area, but far less than some residents report waiting for a cab.

“It can take 30 minutes to get a cab,” said Freddie Jackson, 40, as he waited for a light rail train along Scott Street near Elgin.

Jackson, who does not own a car, said he hasn’t tried Uber, but his nephew, who lives with him, has. Based on what he’s heard, he would try it, Jackson said.

Uber driver Lateefah Eburuche said more people east of Texas 288 would use the service once word of mouth lets them know it is available. Eburuche said when she began driving for Uber shortly after the company launched in Houston, trips were all circulating around NRG Park and western neighborhoods.

“Now it’s surging over here,” said Eburuche, who also lives in the Third Ward.

Much of that demand comes from students at the University of Houston and Texas Southern University, she said. South of the campuses, Eburuche said, she believes many people would ride if drivers were available.

“The lady that lives next to me has to be 80 and catches a cab twice a week,” Eburuche said. “Last week she took an Uber for the first time. If the cabs are doing well, Uber would do well.”

Say what you want about Uber, this is a smart strategy. They’re aiming at a market that’s both underserved by traditional cabs and more likely to be in need of them. They still have to recruit and keep all those drivers, and they have to get the Uber app out to the people they want to use the service, but they’ve got the pieces in place. And if they succeed, it will be strong evidence (as the story suggests) that the city’s more stringent background check requirements aren’t too onerous for Uber. More onerous than they might have liked, sure, but not so much that they can’t succeed. I wonder if Lyft will come to regret its decision to pull out.

Uber’s class action lawsuit woes

Of interest.

Uber

Uber’s business model is on the rocks late Tuesday after a federal judge granted class-action status to a lawsuit targeting the company’s treatment of drivers as independent contractors.

The case is one of several high-profile suits brought by drivers against the technology start-up that has displaced traditional taxis in many markets. A California labor board ruled against the company in a separate but similar case earlier this summer, in an administrative decision that does not bind the courts but outlined some weaknesses in Uber’s legal argument.

Now those weaknesses will face a test with much higher stakes — though just how high is a matter of dispute. The plaintiffs wanted the court to include 160,000 drivers in the class as party to the current lawsuit alleging that drivers are full employees of Uber with full labor law protections, rather than independent contractors. Tuesday’s order places some restrictions on the class, and it’s unclear how many of those 160,000 drivers will ultimately be part of the suit. Uber believes “only a tiny fraction of the class” will be eligible, a spokesperson wrote in an email, though Tuesday’s ruling leaves the door open for arguments to expand the class.

[…]

The cost of paying back wages and payroll taxes for the class Chen certified Tuesday, while certainly smaller than the $50 billion that the company is currently worth according to investors, would be vast — especially if plaintiffs’ attorneys accept Chen’s invitation to make further arguments about including other drivers in the class, and succeed.

And perhaps more importantly, having a giant chunk of its driver base collectively re-classified as employees would chip away at the company’s reputation for disrupting the taxicab business. Uber would start to look like any other company that hires workers to drive fares around for tips and wages under the normal protections of employment law.

This is the first step in what would be a long fight, and as Uber is likely to appeal this ruling, there’s no guarantee it would stand. As things are now, Uber drivers outside of California are not involved, so there’s nothing at stake here just yet. Still, it’s worth keeping an eye on this, because the effect if the ruling ultimately stands would be big. Slate has more, while ThinkProgress looks at the bigger picture.