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Estimated Two-year Net Impact to General Revenue Related Funds for HB100, As Introduced: a negative impact of ($128,078) through the biennium ending August 31, 2019, if the effective date of the bill is June 1, 2017; or a negative impact of ($162,862) through the biennium ending August 31, 2019, if the effective date of the bill is September 1, 2017.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
House Bill 100 would amend current Occupations Code by adding a chapter that would regulate transportation network companies (TNC). The bill would require that digitally prearranged rides operated on a digital network register, be granted a permit, and comply with state regulations. If enacted, the bill would only pertain to companies that operate a digital network of prearranged rides using personal vehicles. It would not affect taxicab, limousine, or other private transportation providers.
This bill would preempt local regulation of TNCs. The state would have exclusive jurisdiction to regulate TNCs.
Additionally, drivers would be required to have their cars properly insured, provide passengers with identification, and provide a receipt for the transaction. The bill would require drivers maintain a valid driver’s license and pass a national criminal background check. Certain offenses within a given time period would prohibit a person from driving for a TNC. All drivers would be considered independent contractors as opposed to employees of the TNC.
Furthermore, the bill would require that transportation network companies retain information of compliance records for at least one year after the ride was provided. Records must be submitted to the Texas Department of Licensing and Regulation. A driver may refuse to provide service to a passenger who has demonstrated unruly and disorderly conduct. A driver may not refuse to provide service for discriminatory reasons or to passengers with service animals.
The Texas Department of Licensing and Regulation may revoke or suspend a license granted to transportation network companies if the company violates provisions of the chapter.
We agree with the intent of this legislation to address the problem of local level overregulation of the TNC industry. Unfortunately, as HB 100 stands on second reading, it misses the mark by transferring over-regulation from the local to the state level. To be certain, this bill represents a net decrease in regulation in some of the most regulated cities such as Austin, but it represents an increase in regulation in lightly regulated cities such as Fort Worth.
We are fully in favor of the state preventing local governments from regulating this industry but we oppose replacing local regulations with onerous new regulations at the state level. To be consistent with limited government and free market principles, the state should preempt local regulations with the lightest regulatory fingerprints possible.
A majority of the provisions of this bill appear to codify existing industry practices such as ensuring that drivers are insured, issuing digital receipts, including a picture of the driver and car in a pickup confirmation, etc. Supporters of HB 100 will argue that merely codifying existing industry practice is not onerous. We are not persuaded by this argument. On the contrary, codification of existing practice is onerous for three reasons: it makes those practices difficult to change quickly as emerging technologies evolve and companies innovate to keep pace, it protects existing TNCs by making it more difficult for small competitors to enter the market, and perhaps most significantly the fact that current practices are considered worthy of codification is proof that the industry is already self-regulating and that codifying these practices is altogether unnecessary.
We oppose the state imposing a new permit requirement and a $5,000 annual fee on transportation network companies. While the large companies such as Uber and Lyft may be able to easily absorb this fee, it would increase the barriers to entry for smaller competitors. We recommend striking this provision altogether or reducing the fee to a de minimis level sufficient to cover the cost of processing the paperwork.
We oppose the provision requiring a TNC to suspend a driver while the TNC investigates a complaint made by a passenger alleging that the driver was operating in violation of the company's intoxication policies. This would give any individual passenger cart blanch to interrupt a driver's ability to work simply by filing an unsubstantiated complaint. If a TNC driver is intoxicated, the passenger should call local law enforcement since driving while intoxicated is a crime.
We oppose the required criminal background check as a precondition for earning a living as a contract driver for a TNC. The industry already has a system for handling this and they have insurance and liability incentives to continue doing this without needing the government to require it.
We oppose the provision allowing airports to impose “reasonable” regulations and fees, particularly because the bill does not stipulate what is reasonable. This is a political compromise to placate taxi and limousine companies with no actual basis in free market principles or urgent public safety necessity.
This bill could easily be improved to address local overregulation without substituting in its place state level overregulation. We would withdraw our objection if the specific provisions above were removed.
We would enthusiastically support HB 100 if amended to strike everything after page 2, line 10.
We would enthusiastically support HB 100 if amended to strike everything and insert the language from HB 3931.