Editorial: Uniform, state-wide rules for ride-booking apps make sense

Published on Friday, 19 May 2017 11:46 - Written by

We commend the Texas Legislature for its passage of ride-booking reform - new, uniform rules for apps like Uber and Lyft that apply everywhere in the state. This is good for Texans, it’s good for business, and it’s good for the drivers who can now supplement their income at times most convenient for them.

It’s also a win for public safety, as ride-booking apps have been shown to decrease drunk driving accidents and arrests.

As USA Today noted on Thursday, “Uber and Lyft - the ride-hailing behemoths embattled in this city - may soon be returning to the Texas capital. Texas lawmakers this week passed a bill that puts regulation of the ride-hailing companies into state hands, overriding municipal rules.”

Bryan Mathew of the Texas Public Policy Foundation says the new law is a victory for consumers and entrepreneurs.

“Our ultimate goal should be creating an open market in the transportation services sector that does not favor any one business model over another,” he said.

In a study released in April, Mathew showed that ride-booking apps fill a need in Texas cities - including Tyler.

“Ride-sharing solves a coordination problem by matching drivers and passengers at the moment of demand through an online platform,” he wrote for The Hill last month. “It does so more efficiently than traditional taxi services by closely aligning the incentives of the ride-sharing company and the consumer. This is the market at its best - entrepreneurs meeting consumer needs in new ways.”

But not all Texas cities viewed ride-booking apps in a positive light.

“Over the last few years, Texas cities like Houston have passed heavy regulations on the ride-sharing industry in the name of public safety,” Mathew wrote. “Often, these regulations mirror those foisted on the taxi industry - fingerprint background checks against an FBI database to screen drivers, or vehicle inspection mandates for cars.”

Sure, ride-booking apps are disruptive to the existing taxi industry, Mathew admitted. But that can be a good thing, he added.

“For decades, the transportation service sector stagnated under taxicab and limousine regulations,” he wrote. “Expensive barriers to entry prevented competition; there was no incentive to improve quality of service. Ride-sharing's innovative business model enabled it to avoid many of these regulations, compete on quality, and thrive. These regulations are wrongheaded, and substantially raise the cost of providing the service while providing little to no public benefit.”

On the other hand, the benefits of apps like Lyft and Uber are demonstrable.

“A June 2016 study from Providence College indicates that when Uber enters a city, DUI rates decrease by 15 percent to 62 percent,” Mathew noted. “In contrast, a KEYE news report showed that in the weeks after Uber and Lyft stopped providing services to Austin in May 2016, DUI arrest rates spiked by 7.5 percent.”

That’s why the Legislature was right to pass a bill setting statewide rules for such apps, rather than continuing to allow cities to bow to industry pressure to overregulate them.

And that’s why Tyler was right to take that approach last August.