Austin may move to deregulate taxis

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It’s been a busy week for vehicles-for-hire in Austin. This past weekend, the city’s voters rejected a proposal that would’ve blocked new restrictions on ridesharing passed by the City Council late last year.

In response, the two main ridesharing companies (Uber and Lyft) announced they would no longer operate in the city. Multiple state legislators have also announced plans to pre-empt local regulation of the industry during the 2017 legislative session.

But even as Austin is ratcheting up regulation on ridesharing companies, it’s also looking at decreasing regulation on traditional taxis:

Austin’s taxi industry should be deregulated to level the playing field with ride-hailing firms like Uber and Lyft, the director of the Austin Transportation Department told City Council in a memo sent Wednesday…

Under the proposal outlined in the memo, the city would still oversee the industry and continue to require background checks and licensing for drivers, regardless of the type of service. But the city would end its cab franchise agreements have taxi companies obtain an “operating authority” from the city, just as ride-hailing companies do.

The changes would likely remove limits on the number of cabs that can operate in the city, which currently sits at just over 900, and on the number of cab operators.

While the timing of this proposal is a bit curious, Austin’s taxi market is in need of some good deregulation. Existing regulations not only limit the number of cabs in the city, but effectively limit the number of cab companies that can operate. A majority of taxi medallions are held by a single company.

Drivers also don’t fare well under this system. A 2010 report found the average Austin taxi driver made $200 a week before taxes, working 12 hours a day with no benefits or job security. And while the new regulations on ridesharing are deeply problematic, there’s no reason the city shouldn’t reduce regulation on taxis as well.

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