TNCs: Disrupted Market, Disrupted Council

Council continues debate

TNCs: Disrupted Market, Disrupted Council

City Council deliberations over the uncertain legal fate of transportation network companies will last another week. At last Thursday's Council session, Council Members Laura Morrison and Kathie Tovo successfully amended the language of CM Chris Riley's ordinance designed to legalize TNCs such as Uber and Lyft, to the point that representatives for both companies expressed "very considerable concern" (in Uber's words) about their willingness to sign a city contract.

Much of the companies' reluctance stems from Tovo's repeated insistence that TNC drivers have Uber and Lyft's highly publicized commercial insurance policies as commercial insurance any time they have the apps up and running, not only during periods when they are actively engaged in commercial activity (as is company policy). Lyft Public Policy Manager April Mims said the company has "never entered into an operating agreement" with another city that included this stipulation, and expressed concern over the company's ability to maintain its business model with the added insurance cost.

Ultimately, the hesitation from both companies was enough to encourage Riley to withdraw his motion to pass the ordinance on an emergency basis – a move that would have allowed all parties to bypass the mandatory 10-day waiting period before an ordinance goes into effect and placed the companies under contract as early as that Friday morning, not coincidentally the same day thousands would descend upon Austin for the Austin City Limits Music Festival (Uber is an official sponsor, offering festival-specific promotions). Instead, Riley successfully moved to pass only on second reading. Coun­cil next convenes Oct. 16, aiming at approving a third reading with presumably additional amendments.

Even without an approved ordinance, it's safe to assume both Uber and Lyft spent Monday morning celebrating a successful weekend. Both companies were ubiquitous in ACL conversation, as thousands of out-of-towners and plenty of locals who didn't want to deal with driving booked Uber and Lyft to get around the city. I talked with people, throughout the weekend, who used the ride-booking services as their sole means of transportation. Their wait times, they said, proved significantly shorter than the anecdotal wait times for taxi cabs during previous ACLs – but the newer option didn't prove entirely ideal. In particular, Uber's "dynamic pricing" led to a number of costly trips: One friend traveling at midnight from my house north of the UT campus to another house in Rosewood – a distance of 2.8 miles – ended up paying $50.44. Uber's fare calculator quotes that ride as typically costing $10-14.

During Thursday's Council discussions, Tovo attempted to limit surge pricing by suggesting a hard cap at 2.5 times the standard rate, and a 100% ceiling on the option during times of "abnormal market disruptions" like natural disasters. CM Mike Mar­tinez quickly suggested a complete moratorium on surge pricing during times of emergencies, which Riley passed as friendly, but Tovo's plan to cap surge pricing was voted down.

The early returns: The services are fine for a festivalgoer in town for a weekend vacation, but if an Austinite actually needs to get somewhere, these "market disruptors" are creating an expensive trip.


This story has been revised to clarify details concerning Uber and Lyft’s insurance coverage. Previously, it noted that the companies only provide primary coverage to drivers when they are actively providing someone with transportation. In fact, the companies extend primary coverage whenever drivers are engaged in commercial activity.

A note to readers: Bold and uncensored, The Austin Chronicle has been Austin’s independent news source for almost 40 years, expressing the community’s political and environmental concerns and supporting its active cultural scene. Now more than ever, we need your support to continue supplying Austin with independent, free press. If real news is important to you, please consider making a donation of $5, $10 or whatever you can afford, to help keep our journalism on stands.

Support the Chronicle  

READ MORE
More Transportation Network Companies
Rideshare Wars Continue
Rideshare Wars Continue
The ground transportation game is changing

Nina Hernandez, Dec. 29, 2017

Changes Coming to Ground Transportation Industry
Changes Coming to Ground Transportation Industry
Keep, keep, keeping up with the times

Nina Hernandez, Dec. 8, 2017

More City Council
Council: Can Social Impact Investing End Homelessness?
Council: Can Social Impact Investing End Homelessness?
Catching up with the dais as they bet on success

Mike Clark-Madison, March 29, 2019

Council: Child Care “Scandal” Highlights City’s Own Failures
Council: Child Care “Scandal” Highlights City’s Own Failures
CMs also mull fate of APL’s Recycled Reads

Nina Hernandez, Feb. 15, 2019

More by Chase Hoffberger
Revisiting the Railroad Killer
Revisiting the Railroad Killer
Local journo Alex Hannaford’s Dead Man Talking podcast investigates the case against a man on death row

Nov. 16, 2018

EMS Union Set for Leadership Contest
EMS Union Set for Leadership Contest
Association to cast ballot between incumbent Tony Marquardt or challenger Selena Xie

Nov. 16, 2018

KEYWORDS FOR THIS STORY

Transportation Network Companies, City Council, Laura Morrison, Chris Riley, Uber, Lyft, April Mims, Austin City Limits, Mike Martinez

MORE IN THE ARCHIVES
NEWSLETTERS
One click gets you all the newsletters listed below

Breaking news, arts coverage, and daily events

Can't keep up with happenings around town? We can help.

Austin's queerest news and events

Updates for SXSW 2019

All questions answered (satisfaction not guaranteed)

Information is power. Support the free press, so we can support Austin.   Support the Chronicle