Austin gets a C on taxi alternatives
Austin enjoys a well-deserved reputation as a vibrant, tech-friendly metropolis. But when it comes to the vehicle-for-hire market, the city could be doing a lot better.
A new report released by the R Street Institute gives Austin a grade of C+ when it comes to how the city regulates vehicle-for-hire companies. The report, which ranks and assigns letter grades to the nation’s 50 largest cities, looks not only at how cities regulate traditional taxi and limo services, but also how restrictive they are towards transportation network companies (TNCs) such as Uber, Lyft and Sidecar. TNCs, which use smartphone apps to connect drivers and riders in real time, have become increasingly popular in the last few years. Many cities initially have been wary of the TNC model, which does not always fit comfortably into existing 20th century regulations.
Austin’s C+ puts it in the middle of the pack. That’s not great, but it’s actually a significant improvement over recent practice. It was only last month that the city reversed its prior TNC ban, and instituted a sensible regulatory framework requiring liability insurance and other requirements for driver and passenger safety.
Prior to that, the attitude of the Austin government to these companies was downright hostile. During South by Southwest, the Austin Police Department tweeted warnings about the illegality of Uber, urging people to take traditional taxis instead. This despite the fact that Austin’s taxis were clearly overwhelmed by the influx of 30,000 festival-goers that had turned Austin’s ordinarily annoying traffic congestion into a sea of gridlock. Congestion can get so bad downtown that rickshaws have made a come back as a mode of transportation. In that environment, prioritizing anti-Uber attacks seemed like an odd choice for the city.
The city’s action legalizing TNCs raised Austin’s score from an F to an A on the relevant subsection of the R Street report. Yet the city’s overall grade still suffers from overregulation of traditional taxi and limo services. For example, Austin imposes a fleet cap on taxis, limiting supply and keeping the prices artificially high.
Austin’s regulation of limos is even worse. The city imposes a minimum fare requirement of $55 an hour, and a minimum wait time of at least 30 minutes between order and pick up. There is no safety justification for such requirements. They are pure protectionism. In practice, the restrictions mean limos do not compete directly with taxis. A wealthy family might hire a limo for a wedding or to send their kids to prom, but no one is going to use a limo service to make a business meeting across town or after a night out. This lack of competition means that traditional taxis often don’t provide as high a quality service as they could.
The emergence of TNCs provides Austin with a chance to reassess how it treats transportation-for-hire companies in general.
