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Houston City Council's new ordinance allows Lyft and Uber to operate

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On Wednesday, August 6, Houston City Council debated nearly 5 hours before passing an amendment to Chapter 46 of the Code of Ordinances governing vehicles for hire to authorize Transportation Network Companies (TNC) including Uber and Lyft to operate. Under the new rules, each TNC must register for an annual fee and assure that all its drivers carry commercial insurance while transporting passengers. In addition, Uber drivers must pass a criminal background check, be fingerprinted, and submit to a drug test within 30 days of applying to drive.

The lengthy debate was a tour de force of policy issues aimed at striking a balance between the stringent regulations applicable to traditional taxicab companies and users of a cell phone app who are willing to drive on an occasional basis using their own cars. Among the most contested proposed amendments were an effort by Council Member Martin to require each driver to carry commercial insurance at all times, and a temporary cap on the number ot TNC drivers at 250 per company. Many aspects of fairness were proposed including allowing surge pricing for all vehicles (traditional cabs and TNCs) for rides solicited through a mobile application.

The new statute also creates a task force to be comprised mainly of disabled persons to review issues related to the availability of handicap-accessible vehicles, data on usage, demographics, and geographical distribution of services in 6 to 12 months of passage.

As with all the recent public speaker sessions, Council meetings and related Committee hearings, the chamber was packed with interested members of the public. Most wore yellow t-shirts or stickers saying “play by the rules” or other slogans used by the pro-taxi companies and lobbyists. But today's session was quiet with little silent cheering or standing in support of results. The pro-taxi side lost on virtually every issue, albeit by some narrow margins. The final vote was 10 in favor, 5 opposed, and 2 absent. Most of the spectators left the chamber in silence. But the pro-TNC side was clear on certain conditions and restrictions that will assure more accountability and professionalism. Under the rules all licensed companies traditional and TNC's will be required to collect and retain more data about trips, locations, and services, and submit it to City regulators to provide a robust database ahead of a scheduled review of the impact of the new law.


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