Fort Worth poised to let Uber, Lyft remain unregulated

May 5,2016

By Sandra Baker

City Council members don’t want to start regulating ride-booking companies such as Uber and Lyft after all and indicate they are now more willing than ever to let the marketplace do the job.

For well more than a year, the city staff has been rewriting its vehicle-for-hire ordinance in an attempt to create a “level playing field” for taxicabs and limousine services with the growing app-based transportation network companies. Many Texas cities and nationwide have been in the throes of figuring out how to regulate the companies — which have long argued they can regulate themselves.

This weekend in Austin, for example, voters will decide on whether Uber and Lyft drivers need fingerprint background checks by the city. If voters say yes, the companies may pull out. Uber is threatening to pull out of Houston, too, if city hall doesn’t eliminate fingerprint background checks. The ride-booking company says they conduct their own checks.

Over the past several months, the Fort Worth staff has met at least seven times with representatives from taxi, limo and ride-booking companies to hash out what Fort Worth’s ordinance should look like and formaulate one they could all agree on.

And just when they thought they were there, the council threw a curveball this week and sent the staff back to the drawing board. They were hoping the council would approve the latest, stripped-down version of the ordinance on May 17 and that it would take effect Oct. 1.

The new draft ordinance would place much more responsibility on the companies, but it would still require background checks done by the city and permit fees, among other things. In December, Fort Worth had already repealed a section of the ordinance that limited the age of cars being used to carry customers.

Assistant City Manager Jay Chapa, in asking council members for “more direction” on what they now want, said the proposed new ordinance reflects what the council had been asking for.

“I’m trying to understand, is, Do we want two separate ordinances?” Chapa asked.

Mayor Pro Tem Sal Espino said that regulating ride-booking companies would create another level of bureaucracy at city hall and that perhaps the city should also simplify taxi company regulations.

“We don’t need to add more regulation,” Espino said. “The market has spoken clearly in favor of letting each do their own thing.”

‘Political hot potato’

Mayor Betsy Price said it’s the council’s duty to facilitate business, not regulate businesses out of the city.

“This has turned into a political hot potato in far too many communities,” Price said. “We don’t want to get there in Fort Worth. I’m not sure we can regulate them under the same ordinance … or else we get out of regulating any of them. The city doesn’t need to regulate a lot of this. It’s market-driven.”

After Tuesday’s meeting, Uber issued a statement: “We are encouraged by the Fort Worth City Council's ongoing commitment to ensuring residents and visitors have the ability to request a ride and make money on demand. We are especially encouraged by the City Council’s latest recommendation that protect the public while preserving innovation.”

More than 40 cities and 30 states where Uber operates have adopted ride booking laws, the company said. In Texas, it’s unregulated in Waco, Amarillo and Killeen.

Ride-booking companies are revolutionizing the vehicle-for-hire industry in the U.S. and other countries by encouraging customers to use a smartphone app to request a ride. But traditional cab operators, which must be licensed and permitted by the city, complain that the tech-savvy companies aren't regulated.

In Fort Worth, taxicabs, limousines and shuttles — even pedicabs and horse-drawn carriages — are regulated through annual operating fees, vehicle inspections, stiff insurance requirements, criminal background checks and drug testing.

Change in direction

The change of direction is likely happening because some of the council members said they have a better understanding of the ride-booking business model.

Councilwoman Gyna Bivens said fellow Councilwoman Kelly Allen Gray helped her put the Uber app on her cellphone and she uses the business a good deal.

“I’ve matured into being this free-thinking transportation person I am today,” Bivens said. “It took me a while and I share that with you because I think we have old mindsets looking at this new industry and if we’re not careful, we’re going to penalize creativity. Allow the market to take care of itself.”

By regulating the ride-booking companies, the city would essentially be regulating some people out of a part-time job, said Gray, who also uses Uber. Some of her drivers, she said, have been students trying to earn a few extra dollars and, in one case, a mother who was trying to put her children though private school.

“And that’s not who we are,” Gray said. “What really does concern me is the permitting thing. Why don’t we go back and have this conversation again? Maybe we do this with an open mind instead of thinking everyone is a taxicab.”

Councilman Jungus Jordan questioned how a permit will be enforced if the city does issue one.

“Why collect to administer a permit for a permit we don’t know what it does, other than create bureaucracy to collect $75,” Jordan said. “I know the staff has worked hard to follow the guidance the council gave. We’ve gotten to a place on council we’re OK with the business model.”