Austin, Texas is a youthful, entrepreneurial city, known for its tech startups, food trucks, and innovation. Although a liberal bastion, it still isn’t the type of place you’d expect residents to reject technological advancements.
Yet recently, Austin voters rejected an arguably misleading ridesharing proposition that claimed its aim was to enhance safety. But the regulations were so overly onerous and based in cronyism that ridesharing companies Uber and Lyft had to leave.
“The story of how Uber and Lyft were driven out of Austin is a textbook example of how government-backed cartels force out competition under the guise of creating a ‘level playing field’ or ensuring ‘consumer safety.’
In this case, the cartel is the local taxi cab lobby, which successfully saddled Uber and Lyft with cab-like regulations that shouldn’t apply to ridesharing companies.
The result is that thousands of enterprising Austinites have been deprived a source of income, while thousands more have been deprived of ridesharing services that were reducing congestion and drunk driving while expanding transportation options to underserved parts of town.”
Due to this, Austin is now the only major city in the country without Uber. Even Las Vegas, which has arguably the most powerful taxi cartel in the country, acquiesced to Uber last year under public pressure.
And now, Austin is needlessly suffering.
As tech entrepreneur Courtney Powell noted at AustinStartups.com, “If we estimate the total wages earned by part-time Uber and Lyft drivers in 2015 using … 10k drivers in Austin multiplied by 60% part-time drivers, multiplied by 5 hours per week … multiplied by $19 per hour — that’s $29 million in part-time yearly earnings alone that will no longer be fed right back into the local economy in the form of income, spending, and taxes.”
And this doesn’t even touch how consumers are affected. In fact Greg Hamilton, the Sheriff of Travis County, has expressed support for ridesharing, because it has reduced instances of drunk driving. As he explained, the arrival of Uber and Lyft to Austin had a positive impact.
“The number of DWI arrests [in Austin] fell 16-percent in 2014. DWI-related crashes fell even more citywide, decreasing by 23-percent last year,” said Hamilton.
Psyched uber and lyft are leaving ATX. Now we can go back to waiting on taxis that never show up or driving drunk. Well played, the man.
— Willy Braun (@WillymfBraun) May 8, 2016
This begs the question, what’s next for Austin? Ellen Troxclair, one of Austin’s few libertarian-conservative councilmembers, had this to say about the future of ridesharing in her city:
“I continue to believe that a fair and limited regulatory environment for transportation providers benefits all consumers, and I hope we can work toward that outcome … I remain hopeful that the Council will work on solutions that will allow Uber and Lyft to return to Austin as soon as possible.”
The battle isn’t over. And as Troxclair has noted, Austin is entirely unprepared to even enforce its new regulations. “Uber and Lyft left Austin because they were unable to comply with the city’s new fingerprinting rules,” wrote Troxclair.
“Meanwhile, the city is bending over backwards to encourage customers to use Get Me and Wingz, who not only arenot fingerprinting their drivers, but may not even run any kind of background checks before passengers get in the car.”
Sadly, this goes to show that, as is typical, government is using “public safety” as a stand-in for their desire to control an economy absent unwanted competition. And as usual, people continue to defy these unnecessary regulations.
View From the Wing, a travel blog, had a smart tip for Austin area residents and visitors: Simply drop your location pin outside of the city limits, then immediately call your driver and ask if he or she will pick you up where you’re actually located.
Talk about a smart market solution to a silly law! While this workaround might be a good temporary solution for some, Austin does need to allow Uber and Lyft back into their city indefinitely.
Halting progress for the sake of cronyism is bad policy, and I have faith that Austin’s consumers will fight alongside their pro-ridesharing city council members to eventually undo this travesty.