Texas Ridesharing Bill Signed into Law

June 19, 2017

A bill that preempts local regulations for ridesharing companies in Texas and replaces them with statewide standards has been signed by Gov. Greg Abbott.

HB 100, sponsored in the Senate by Georgetown Sen. Charles Schwertner, sets statewide operating standards, including insurance requirements, for transportation network companies (TNCs) like Uber and Lyft. It takes effect immediately.

These companies have been regulated in the past on a city-by-city basis in Texas. TNCs operating in the state have clashed with cities over local ordinances, particularly over driver fingerprint requirements, and have pushed for statewide regulations.

Uber and Lyft subsequently withdrew from Austin in May 2016 after the city passed and voters rejected an attempt to overturn an ordinance requiring ride-hailing service drivers to be fingerprinted as part of the background check process. The two companies reportedly spent $9 million in the unsuccessful attempt to convince voters to repeal the measure.

The companies continued to operate in Houston and San Antonio, where fingerprinting was required, however. Other major cities, including Dallas, El Paso and Fort Worth haven’t required driver fingerprints.

Under HB 100, local ordinances already in place would be preempted by state regulations, meaning TNCs wouldn’t be required to fingerprint drivers in any city.

Uber tried to get a bill passed in 2015 that would have regulated ride-hailing services statewide but the measure failed in the waning days of the legislative session. It was actively opposed by the taxi industry and the state’s largest cities, including Austin, Dallas, Houston and San Antonio.

According to Schwertner the inconsistent patchwork of regulations was a problem. He said that 40 other states already regulate ridesharing at the state level.

The Texas Department of Licensing and Regulation would oversee TNCs and would have the power to revoke licenses to operate in the state if the businesses don’t comply with state rules.

The bill includes provisions aimed at protecting customers. It would require that ride sharing drivers undergo a yearly criminal background check, not be on the sex offender registry, and carry auto insurance.

TNCs would have to provide an electronic receipt to customers, and would have to maintain records for all rides within the past five years.

According to an announcement by Gov. Abbott’s office, the bill also requires that the zero-intoxication standard for drivers be strictly enforced.

The bill would specifically prohibit discrimination based on disabilities, and would require licensed TNCs to implement pilot programs in one of the four largest cities in the state specifically to serve customers with disabilities.

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