April 2016

Yet another excellent post in support of Proposition 1, this time from Erica Grieder, senior editor of Texas Monthly and author of one of the best recent books on Texas. Erica reminds us of the historical context, which does not reflect well on Austin’s regulation of taxis, and her crystalline points are mostly different than the ornate arguments in our own screed.

Our attitude toward Austin’s Proposition 1, currently in early voting and up for non-early voting on May 7, is set forth here. Click here for a somewhat more, er, aggressive argument against the opponents of Proposition 1, in case your voting inclinations tend toward the “enemy of my enemy” school.

We also note this story about a lawsuit against Lyft, which surely qualifies as an example of our culture of liability run amok.

Basically, the plaintiff’s now deceased husband was riding a motorcycle on a residential street, following a pickup truck. The truck suddenly swerved, and the dude on the motorcycle slammed in to a standing car pulled over to the side with its flashing lights on. In other words, the linked story suggests that the motorcycle was tailgating the truck which in turn was driven by somebody not paying perfect attention to the road ahead. Now the widow of the motorcycle dude is suing Lyft, because the parked car with the flashing lights in to which her husband slammed was waiting to pick up a customer, allegedly in violation of the ordinance that would be overturned by Proposition 1, notwithstanding the determination of the Austin police that the standing car was “legally stopped.”

So, in other words, the plaintiff’s claim for $1 million rests on her husband having had the good fortune to drive in to the rear of a stopped car owned by a Lyft driver instead of, well, anybody else. Yeah, that makes sense.

Rarely since your Editor matriculated to the great boon of the franchise several decades ago have we enjoyed casting a vote so much as today, when we voted for Proposition 1 in Austin’s special election. Proposition 1, on the microscopic chance that you are all three of an interested Austin voter, reading this post, and ill-informed, is well explained through the links in this post. In brief, it is a referendum to overturn a law passed by the Austin City Council to regulate Uber and Lyft to such a degree that Uber and Lyft have threatened to discontinue service in Austin if the new ordinance is not overturned. If Proposition 1 is approved by voters between now and May 7, the effect will be to overturn the offending law.

This being Austin in the age of Sanders, the favorite argument against Proposition 1 is that we have to stand up against “corporate rule.” See, e.g., the signs springing up all over town…

…or the Austin American-Statesman’s editorial in support of a “no” vote. The argument essentially is that business should not defend itself against regulation by organizing a political response through an established mechanism, because that is “corporate rule.” We wonder (not really, actually) whether the opponents of “corporate rule” through the referendum mechanism would prefer that businesses just make hefty campaign contributions to influence the politicians who threaten them.

Regardless, the politicians and pro-taxi folks — because that is actually what this is all about — who position this as a question of “corporate greed” skate past an equally plausible alternative narrative: That Uber and Lyft and their supporters are speaking on behalf of the 10,000 people in town who earn their living in whole or in part via ride-sharing mechanisms, and the perhaps hundreds of thousands of users. Who would organize these drivers and happy customers — and, let’s face it, the City Council would not have wasted its time on this ordinance if Uber and Lyft were not delighting customers — if not the ride-sharing companies? These Austinites are the more than 65,000 people who signed the petition that generated the referendum, which is more signatures than the sum of the votes that Austin’s mayor earned when elected in 2014. It is in fact not remotely clear which side has the best claim to democratic legitimacy, if you care about that sort of thing.

The anti-Prop 1 crowd has also complained about the well-financed ad campaign backed by $2.2 million in spending by Uber and Lyft, both because of “money politics” concerns and alleged flaws in the truthiness of the ads themselves. Regarding the former, we suggest that the large “investment” by the ride-sharing companies proves that they are genuinely concerned that the ordinance is a real threat to their business model. Otherwise, the spending would make no sense.

Regarding the substance, there is no question that the pro-Prop 1 ads are every bit as truthful as most political advertising, which is not very. But nobody has inspected the claims of the anti-Prop 1 folks, who do not run paid ads (or any that we have seen) but rely on their lock on Austin’s politics and media. There is, in fact, no evidence that the costly Austin finger-printing scheme does anything other than attack the share economy business model. Worse, there have been no findings by the city government to refute the most obvious security point: That the digital handshake required to use a ride-sharing app precisely identifies both the driver and the passenger, which makes it extremely hard for either to get away with a crime against the other. Which brings us to the merits of the new ordinance and the anti-Prop 1 argument, which are pathetic.

Allegedly, the Austin ordinance at issue is meant to improve “safety” by requiring much more extensive background checks, signs on cars, and so forth, all of which increase costs and will make it more difficult for Uber and Lyft to recruit drivers inexpensively, to the point that the two firms have threatened to withdraw from the Austin market if Proposition 1 does not pass. There are several responses to this, which in the aggregate so overwhelm the argument in favor of the City Council ordinance that it is impossible to believe that its motives were not fundamentally protectionist (as has been the case in so many other cities). They are, at least, and in no particular order:

• If the City Council actually cared about safety and leveling the playing field with the taxis, it would require that taxis use a digital handshake as Uber and Lyft do, which is the only way actually to know who was in the car with whom at the moment an alleged crime occurs.
• If the City Council actually cared about the safety of drivers, who are at more risk than passengers, it would address the risks faced by taxi drivers, who take passengers without knowing who they are. (We note that in cities more dangerous than Austin cabbies protect themselves by profiling, because they have no digital handshake — see here, where the NAACP supported Uber vs the taxi lobby in Newark, New Jersey, precisely because Uber finally made it possible for blacks to get a ride. Yes, in other cities the social justice constituency has lined up in favor of Uber and Lyft because its drivers have no perceived need to profile and would be trashed by the ratings system if they did. If Austin had a larger black community, that would probably happen here as well.)
• The aggregate impact of Uber and Lyft is almost certainly to increase safety, because fewer people drive drunk. If you are partying in downtown Austin on a busy weekend, good luck getting a taxi home. If you and your buddy forget who agreed to be the designated driver, ride-sharing is an excellent new alternative to getting in your car and hoping for the best or waiting for a taxi that may never come. Drunk-driving has decreased substantially since ride-sharing came to Austin, and while there is not yet proof of cause and effect it is all but impossible to believe that ride-sharing has not saved lives that taxis would not have saved.
• The aggregate impact of Uber and Lyft is almost certainly to increase the liberty of people without cars, who cannot otherwise get a ride when there otherwise no taxis.
• The aggregate impact of Uber and Lyft is almost certainly to reduce the number of cars in the most heavily trafficked parts of Austin, because people who might otherwise drive their own car can avoid the hassle and expense of parking by hailing Uber or Lyft.
• Uber Pool brings car-pooling back with a vengeance, the dream of every anti-traffic climate-concerned liberal since roughly 1975. Taxis don’t pool, Uber does. Why is this something we want to regulate out of Austin?
• If you, as a consumer of transportation, are convinced notwithstanding all of this that taxis are indeed safer than ride-sharing, by all means, stick to taxis.

Which leads to the mother of all arguments in favor of Uber in Lyft: If ride-sharing had come before taxis, would anybody actually say “let’s invent a fleet of yellow cars owned by a few companies, mandate that they charge a certain price that remains constant regardless of demand or time of day, give them specific monopoly privileges, and set up a government regulatory regime to oversee it all”?

Uh, no. Not a chance, it would be too stupid. Well, if we would not have invented taxis if ride-sharing had already existed, why should we protect them now with an ordinance that tries to “level the playing field” by tilting it in their favor?

And if that doesn’t persuade you, perhaps Hubbell will: