Ridesharing reform is coming to San Antonio, but so far it’s been a bumpy road.
In December, the San Antonio City Council voted 7-2 to impose a set of unnecessary and burdensome rules on ridesharing companies. The new regulations imposed a litany of requirements on drivers before they were allowed to pick up fares. Drivers had to submit to a variety of background checks, including fingerprinting and drug testing, as well as random vehicle inspections and other redundant or even pointless regulatory hoops.
The San Antonio ordinance also imposed wildly disproportionate insurance requirements. Ridesharing drivers are required to have $1 million in comprehensive coverage from the moment they accept a fare. By contrast, someone driving a San Antonio taxi is only required to have the state minimum of $60,000 coverage per incident.
The regulations were so unwieldy that ridesharing pioneer Uber announced it would suspend operations in the city. Uber was soon joined in this by its chief rideshare competitor, Lyft.
In response, an ad hoc working group led by the council’s newest member, Roberto Trevino, worked to craft revised ridesharing ordinance that is more accommodating of the growing practice. That revised ordinance passed on March 5, but the changes, while positive, were not enough to alter Uber and Lyft’s plans to “pause” operations in the city once the regulations go into effect on April 1.
In the last few years, ridesharing companies like Uber, Lyft and Sidecar have become increasingly popular across big U.S. cities. These companies, which use smartphone apps to connect drivers and riders in real time, provide a service that often is cheaper and more convenient than traditional taxis.
Unsurprisingly, people who use these services tend to be big fans. City governments, on the other hand, started out more wary. Ridesharing did not always fit comfortably into existing 20th century regulations, and existing taxi monopolies were an entrenched interest opposed to reform.
But over the last few years, there has been a remarkable turnaround in how some of America’s biggest cities deal with alternative transportation. From Washington to Austin, cities have implemented sensible regulatory frameworks that allow ridesharing companies to provide an alternative to traditional taxis, while still addressing legitimate safety concerns. San Antonio’s restrictive ordinance was out of step with this trend.
San Antonio long has lagged when it comes to vehicle-for-hire regulation. According to a 2014 report by the R Street Institute, San Antonio ranked 47th out of America’s 50 largest cities in terms of how they regulate taxis, limos and other vehicle-for-hire companies, earning a grade of D-.
The new working group is a sign the San Antonio council is waking up to the risk that it will be left behind if it continues to obstruct ridesharing in the city. But more needs to be done. San Antonio can try to limit competition in its taxi market, but it can’t limit competition between cities. With Austin just down the road and more people moving to the city who are rideshare users, the demand to remove regulatory obstacles is only going to grow over time.
The best way to deal with regulatory mistakes is to fix them early. Hopefully this is a lesson the council is learning.