A big conservative city is about to strangle its sharing economy
Onerous new regulations in Houston, Texas, set to go into force this Tuesday, may end up shutting down some ride-sharing operations in the country’s fourth most populous city — a place that desperately needs them. The city’s sheer overreach in regulating companies like Uber and Lyft, indeed, should serve as a strong rejoinder to cities that might consider following a similar path.
Under Houston’s new regime, everyone who drives for pay, even on a very occasional basis, will have to go through a 40-step process that the city specifies in excruciating detail. Individually, the requirements the city imposes for things like safety inspections and criminal records checks aren’t unreasonable. But the way that Houston wants to do them is. In many cases, the city insists on doing and redoing things (such as background checks) that companies have already done. The result: Uber is complaining bitterly and will almost certainly see its driver ranks shrink, while Lyft is likely to suspend all operations on Nov. 4. Smaller companies like Wingz that might have targeted Houston’s large and lucrative market are, for now, staying away entirely.
In some cities, with lots of mass transit, this might not be that big a deal. Houston, which doesn’t have the population density to support street-hail taxis in most of its neighborhoods and possesses only one urban rail line, companies like Uber and Lyft are sometimes the only practicable way to get around for those who don’t have access to a car. Imposing regulations that make life nearly impossible for the companies’ drivers, as the city has done, sets an awful precedent, reduces options for consumers and seems likely to increase drunk driving.
And it’s particularly disturbing because Houston, of all cities, should know better. Although it’s hardly a tea-party hotbed, the city easily stands as America’s most conservative city with more than 1 million residents. In 2012, Barack Obama and Mitt Romney came within a few thousand votes of each other county-wide and it’s the only really big city in the country that regularly elects city council members who could do fine in the House GOP caucus. The governments of San Francisco and Washington, D.C. — the two most liberal cities in the country by many measures — have both been much more welcoming to Uber and Lyft, and even our nanny state on the Hudson, New York City, has done much better than Houston. The city needs to change. Quickly.
New peer production companies are a vibrant new economic sector. Houston is proving how the wrong regulations can crush them.
