Analysis: Texas Legislators, Not Local Voters, Have the Final Say

By , The Texas Tribune,

Ever wish you could appeal an election?

On Saturday, Austin voters said they wanted drivers for ride-hailing companies like Uber and Lyft to follow existing local laws on background and fingerprint checks and on stopping in traffic to drop off and pick up fares.

Less than 24 hours later, state Sen. Charles Schwertner, a Republican from nearby Georgetown, announced he would file legislation countermanding voter sentiment in Austin or any other Texas city that “impedes free markets and competition” in the cab business.

“What we have is this patchwork of municipal regulation that is out-dated and protectionist,” he said.

Count at least one of his colleagues, Sen. Don Huffines, R-Dallas, as a supporter. “Local control is not a blank check to trample liberty. Austin’s #Prop1 is latest of too many examples in too many cities. #txlege will act,” Huffines tweeted.

Maybe they’re right. But politicians should overrule voters cautiously.

It’s true that voters do stupid things on a relatively frequent basis — consider this year’s presidential primaries, or the new chairman of the Travis County Republican Party, or the local elections in Crystal City, the state’s current hotbed of best government practices.

But the ride-hailing fight in Austin has been fraught with misinformation and bad blood, pitting a smug pack of bullying capitalists against a city government with expansive regulatory ambition. It’s hard to muster genuine sympathy for either side.

No need to litigate it here — you can find everything you need in 45 seconds on Facebook, or by Googling the names of the combatants.

The greater regulatory war here is over who sets the rules we’re supposed to live by — a kind of “which-parent-is-boss” matchup between the state of Texas and its multitude of local governments and special districts.

“I think this issue has a broader constituency than just the individuals that voted on Prop. 1,” Schwertner said of Austin’s ride-hailing regulations. “This is an issue that affects all of Central Texas and, really, in a lot of ways, the entire state.”

Here’s a short guide to that state-local tug-of-war: If a company or industry loses a fight over a local ordinance, the Texas Legislature serves as the court of appeals. Want to put hydraulic fracturing wells inside the city limits in Denton? The voters said no, but the Legislature said yes. Want grocery stores to offer plastic bags, which is outlawed in several Texas cities, including Brownsville and Austin? That one is on appeal. Want to run a taxi service that doesn’t follow the same rules the existing cab companies follow? Schwertner and others stand ready.

The ride-hailing debate threw two safety issues into play. One is that the easy rides home have cut into the number of drunk drivers on the road; the other is that riders — women in particular — are vulnerable if drivers are not screened for criminal backgrounds. This cab medallion has another side, too: If the regulations that the Lyfts and Ubers are trying to avoid are so onerous, why do the existing cab companies have to follow them?

You can regulate the new companies, as Austin wants to do, or deregulate the taxicab companies that were already there, licensed and living with municipal regulations that differ from city to city.

Freeing the ride-hailing companies — or the cab companies, for that matter — from background checks on their drivers carries a risk. It potentially holds lawmakers accountable for what those unregulated drivers do. That’s an easy political commercial to write, whether you like the premise or not.

It’s also easy to write the commercial about lawmakers and regulators who protect existing and somewhat unpopular cab companies from newcomers with great ideas about how to make over that industry.

Playing referee in business vs. business bouts is one of the key roles of state lawmakers. Various licensed professionals — doctors, lawyers, engineers and architects are examples — are constantly asking lawmakers to keep competitors at bay, just as the competitors are fighting for entry. Walmart has lobbied lawmakers to allow it to sell hard liquor; the current sellers don’t want the competition. Tesla wants to sell cars on the Internet; car dealers see that as a direct threat. Some cities have outlawed texting while driving; the Texas Legislature has looked more than once and decided that’s not worth regulating.

This is another one of those standoffs. Eventually, it could open a vein of competition that benefits consumers and profits businesses. Right now, it looks more like a food fight.

Disclosure: Uber, Lyft and Walmart have been financial supporters of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.

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