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Uber-wars escalate in Texas

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Traditional cab companies have long had a lock on their niche within the transportation industry and the recent wave of competition posed by new technology companies like Uber and Lyft is meeting resistance in what often appears – at least in Dallas and Houston – a partnering of entrenched local business and government.

A Dallas Morning News series in late 2013 revealed how recent actions against Uber, a smartphone car service, suggest the city’s willingness to ignore free market principles in favor of using city policy to determine winners and losers.

As the city’s credibility on this issue attracted deserved scrutiny, a task force was formed and has been studying Dallas’ transportation-for-hire regulations in order to make recommendations to the city council.

Meanwhile, a similar debate is going on in Houston with the city taking interesting action.

In February, Uber.com launched an online petition seeking an update to current city of Houston regulations. Noting Houston as having been named “America’s next great global city,” the company further contended “a lack of modern transportation options is handcuffing that future.”

Days later, the company posted this:

Over the past three days, nearly 10,000 Houston residents and visitors have signed a petition demanding that Mayor Parker and the City Council make way for modern transportation options like Uber.

And how has the city responded? The City Attorney has issued a cease and desist order against its own constituents. That’s right, the City of Houston has demanded that Houstonians stop emailing the Mayor and the City Council.

The city attorney’s order:

From: Feldman, David M. – LGL [mailto:David.Feldman@houstontx.gov] Sent: Wednesday, February 26, 2014 8:46 AM
To: Miller, Robert
Subject: Uber Cease and Desist

Robert – Please consider this as a formal demand that your client, Uber, cease and desist from transmitting or aiding in the transmission of form e-mails to City officials regarding the adoption of an ordinance to accommodate their enterprise. Despite my informal request to you by telephone on Monday, the excessive number of e-mails has gone unabated, to the point that it has become harassing in nature and arguably unlawful. Failure to cease and desist will be met with appropriate action by the City.

David M. Feldman
City Attorney
City of Houston

Akin to the allegations in Dallas, a Houston Chronicle editorial suggested its own local government’s guilt when it comes to cronyism and protectionism of the traditional cab and limo companies.

That’s not the Houston we know. NASA scientists, Texas Medical Center researchers and energy corridor engineers all make ours a city of innovation. But the accusations of lagging behind the times ring all too true at City Hall, where lobbyists are pulling out the stops to make sure that City Council clings to an antiquated taxi and limousine ordinance.

Folks on the front lines of Houston hospitality , like Houston First and OKRA, have called for a change. It is a call echoed by the scores of Houstonians frustrated with inadequate taxi service. Mayor Annise Parker and our council members need to answer by clearing city ordinances of protectionist regulations and bringing the law in line with modern-day business models.

For new companies like Uber or Lyft, operating in Houston is like trying to drive a car in a city where traffic rules haven’t been updated since the horse and buggy. The list of special interests willing to defend this out-of-date status quo reveals just how preposterous the rules are: There’s either the folks on the Yellow Cab payroll, big government busybodies who take personal offense when someone tries to make money without City Hall permission or reactionaries who oppose any new innovation out of Silicon Valley.

But this fight at City Hall isn’t about Uber, Lyft or any other Internet application. It is about whether our city’s ordinances are written for the benefit of Yellow Cab or the benefit of Houston. An interoffice memo to Mayor Parker on taxi and limo regulations makes the point perfectly clear: “The facts show that these regulations may even inhibit customer choice without providing a tangible benefit to the customer.”

And as another city always happy to protect allies and “favorite sons,” the city of Austin issued this warning to SXSW attendees who might be tempted to use the Uber or other non-traditional vehicles brought in for the festival:

Unpermitted ground transportation services are possibly recruiting for drivers in Austin, so the City of Austin wants people to be aware of the rules and risks before unintentionally breaking the law and incurring legal costs.

In order to drive a ground transportation vehicle, a compensated driver must carry an operating permit, a chauffer’s permit and commercial insurance. Violating any one of these requirements could result in up to a $500 fine, totaling a possible $1,500 fine if all requirements are violated. Additionally, drivers who do not comply with the law risk having their vehicle impounded.

The Austin Transportation and Police Departments encourage South by Southwest festival goers to use permitted transportation services and to learn the law before registering as drivers for vehicle for hire services during SXSW.

To help residents and SXSW festival goers navigate downtown Austin, the city’s Austin Center for Events is hosting an interactive map March 7 – 16 that includes road closures, landmarks and transit stops. Travelers are encouraged to visit www.austintexas.gov/citystage to plan their routes through downtown Austin in advance.

Some available resources are available to help people in Austin get around during Spring Break and SXSW:

On its blog, Uber says it won’t cease or desist.

This issue is about efficient transportation options, but it’s also about economic freedom – healthy competition with minimal government intervention. On this front as well we should neither cease nor desist.

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