Texas May Soon Have a Statewide Law to Regulate Ride Hailing Companies Like Uber and Lyft

Ride sharing photo courtesy of Lyft

A bill that would let the state of Texas govern transportation network companies like Uber and Lyft passed the Texas Senate this week and is now awaiting Gov. Greg Abbott’s signature to become law.

Texas HB 100 would regulate all transportation network companies, also known as ride hailing companies, operating in Texas and require them to get an occupational permit and pay a fee.

The law would take precedent over similar laws passed by cities like Austin and San Antonio. The state would be the only regulator and cities would not be able to impose a tax, require additional permits or fees or impose other requirements.

Under the legislation, an airport or a cruise ship terminal can impose fees on the transportation network companies.

The law also requires the ride hailing companies to conduct an annual criminal background check on each of its drivers. And it stipulates that each driver is a contractor for the company and not an employee.

The law also requires drivers not to discriminate against passengers based on race, age, disability or area of town.

The law would take effect Sept. 1st.

Uber and Lyft ceased operations in Austin a year ago when Austin voters rejected Proposition One, which would have required the companies to do fingerprint background checks on drivers. While the new law would require annual background checks, it does not require fingerprint based background checks.

Since Uber and Lyft left Austin, homegrown companies like Fasten and Ride Austin, a nonprofit ride sharing company, have filled the void providing rides in the city.

And San Antonio, which initially imposed heavy regulations on Uber and Lyft, decided to let the companies operate there with fewer regulations after Uber and Lyft halted operations because of the restrictions.

“Ridesharing in Texas took a tremendous step forward today,” Chelsea Harrison, Lyft spokeswoman, said in a statement. “Thank you to Senator Schwertner and Representative Paddie for defending consumer choice and all the stakeholders who have helped to create safer roads and expand reliable, affordable rides for Texans. On behalf of the entire ridesharing community, thank you to all of the legislative champions who have helped guide this bill through the capitol.”

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