By Tim Shea
Special Contributor
With last Wednesday’s passage of HB 100 through the Senate, it seems pretty much inevitable that the bill will be signed into law and, as of June 1st, Texas will begin regulating ride-sharing at the state level. Further along in that chain of inevitability is the triumphant if controversial return of Uber and Lyft to cities such as Austin. After all, it’s not like they’re exactly being coy about their intentions.
So, as with any economic regulation, Governor Abbot’s signature on HB 100 will bring with it winners and losers. Texas’ taxi companies and labor unions are obviously not happy this new development, arguing that the law represents a regulatory double standard and will serve as a detriment to both workers’ rights and public safety. Similarly, companies such as Fasten and RideAustin, who swept in to fill the void created by last summer’s departure of Uber and Lyft from the state capitol, also stand to suffer from the return of the big dogs.
But, at least in the short term, those negatives should be overshadowed by the benefit to ridesharing consumers. Uber and Lyft have been out of the game in major Texas cities for just about a year now. In that time, the above-mentioned competitors have (for the most part) been able to fulfill the local demand for ridesharing. That means that if Uber and Lyft want both their customers and their drivers back, they’re going to have to work for them. Likewise, those competitors are going to have to up their game if they’re going to survive. In short, residents of these cities can look forward to lower fares, better promotions, and more options as the ridesharing market battles towards a post-HB 100 equilibrium.
Another less tangible benefit of the regulation is that uniform application of regulations statewide should reduce compliance costs, and thus overall costs. Before, a patchwork of local regulations meant companies operating statewide had to navigate a different and often complex set of legal hurdles for every market they worked in. Or, you know, they just left certain markets altogether. Now that the regulatory framework has been centralized, however, compliance can also be streamlined to save both time and money.
Of course, the giant elephant in the Texas statehouse (that wasn’t a GOP pun, we swear) is that a state which places such a heavy emphasis on self-determination is now overruling the will of not only local governments, but the will of the people. It is in many ways not too dissimilar from the fiasco surrounding SB 6. As we’ve noted in our previous research, the so-called “bathroom bill” would result in billions of dollars of economic losses if passed precisely because it offers a one-size-fits-all solution for the entire state. Many, if not all of those losses, would be prevented if the issue was kept at the local level.
Fortunately, it doesn’t seem like the passage of HB 100 will bring about such widespread negative consequences. Ridesharing is largely an economic and policy issue, as opposed to a social one, and as such should not inspire boycotts and other detrimental effects. Even those consumers who feel strongly about the need for their drivers to be fingerprinted will still have options available to them in the short term.
That is not to say there will be no downsides. It’s easy to see how many of the benefits could be offset by the costs of potential legal battles between cities and the state, not to mention the potential for negative externalities brought about by less stringent background checks. As of now, it’s hard to say if the costs associated with higher driver-related crime will outweigh the benefits of streamlined regulations. What we can say is that, with as much bad blood as HB 100 has stirred up, it’s an issue that many people will be watching very carefully.
—
If your company has an issue in legislature and is looking for professional support, take a look at how we helped the Texas Association of Realtors with two bills:
https://www.angeloueconomics.com/our-work/case-studies/texas-association-of-realtors
