Austin controversies

Over our fondest wishes and most eloquent argument, the voters of Austin have voted to defeat Proposition 1, which would have overturned an Austin ordinance that regulates the ridesharing companies Uber and Lyft. These regulations are so onerous that Uber and Lyft threatened to leave Austin if Proposition 1 did not pass. Both firms have now announced that they will in fact stop doing business inside the Austin city limits starting tomorrow morning. (This is personally annoying in a very specific way, insofar as your Editor’s travel plans for the coming week, involving complex logistics with his daughter, depended on Uber. Sad!)

The opponents of Proposition 1, which included the flower and chivalry of the city’s Democratic establishment – the politicians, media, liberal activist groups, and so forth – made the election about “corporate greed,” and if you did not believe that they argued it was about safety, and finally they claimed that Uber and Lyft would not leave town anyway. Regarding the last point, the same Luddites made much of Uber and Lyft spending more than $8 million campaigning for the referendum, which to your Editor and other economic thinkers amounted to virtual proof that Uber and Lyft indeed considered the city regulations to be an existential threat to their business model. Why would two money-losing companies waste that much coin on a lark?

In fact, the fight was really over political power. The city’s politicians by and large believe that one must not disrupt local monopolies, however poorly they perform, without seeking permission. Uber and Lyft offended this sensibility by taking the point of view, after reading the existing taxi law, that they did not need permission. We know this to be true, because “senior city officials” — household names in this town — told us as much in private conversations.

All of that being the case, why did the town’s Democratic establishment come out so strongly against Uber and Lyft (and why are they trying to push out Airbnb and HomeAway)? Because progressives hate the “share economy.” For more than 50 years progressives have been using employers as leverage to push social change, whether in opportunity, health care, or political speech, and they do not want to lose that lever. The share economy, which turns workers into capitalists — their cars and houses become working capital in the truest sense of the term — is anathema for progressives who believe that the purpose of government is to change the way people behave. Austin’s new city council is surprisingly extreme in this view, considering that the new economy has produced the tax base that enables Austin’s municipal profligacy, but cause and effect has never been very important to politicians of any party, at any time.

The battle is not over, either in Austin or in general. We suspect that the thousands of people who will come to Austin for next year’s session of the Texas legislature will be universally irritated that they cannot use Uber to get around. We would wager more than a plug nickel that the “lege” will extend the logic of last year’s ban on local fracking ordinances to ridesharing and perhaps to other local regulation of disruptive businesses.

More generally, ridesharing is here to stay, because its underlying logic is too powerful. Uber, which reduces traffic and the demands on scarce parking, enables carpooling among strangers, reduces drunk driving, and allows the livery business to respond quickly to hour-by-hour changes in demand, is such a quantum improvement over taxis that it will win eventually. After all, if Uber and Lyft had existed first, would anybody have said “let’s establish a fleet of yellow cars, give them a local monopoly, and impose fixed fares so there are chronic shortages when people need them most”?

Not in Bernie Sanders’ wildest dreams.

An unscientific online poll on Austin’s Proposition 1, through the tweet below. As of this writing, “for” Prop 1, which is a vote for freedom and for the customers and drivers of the big ridesharing companies, is way ahead of “against.” But we’re going to go out on a limb and say that the local liberals who think of this as a fight with “corporations” are not big followers of the Austin Business Journal.

Ride-hailing's future in Austin will be decided tomorrow — tell us, how will you vote? https://t.co/pL7NtxIM2y pic.twitter.com/o0aHC06Czg

— AustinBizJournal (@MyABJ) May 6, 2016

Sometimes the much-maligned Uber drivers turn out to be heroes. In this Austin case, an Uber driver and his passengers intervened on behalf of a woman who was being attacked at 7th and Colorado.

An Uber driver and his passengers scared off a man who police say was trying to restrain a woman in downtown Austin on Thursday night, an arrest affidavit said.

The man approached the woman Thursday night at West Seventh and Colorado streets and said “Hey, where are you going?” according to the affidavit. He put his arm around her and attempted to drag her into an alley, the document said.

She fought to free herself, witnesses told police. At one point, she tried to jump into a passing vehicle, but the driver locked the doors and drove away. The man then grabbed her again and continued to drag her, the affidavit said.

As she screamed and kicked, an Uber driver nearby got out of his car with his passengers, the driver told police. They yelled at the man to leave her alone; the man let go and began walking away, the affidavit said.

Friendly reminder, your City Council wants to put this guy out of work, and force these passengers to take taxis.

We discussed it, and Eli has joined Hubbell in support of Proposition 1. That matters.

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:

In light of our widely-read observations regarding the renaming contest for Austin’s Robert E. Lee Elementary School here two long 24-hour news cycles ago, we think Fox News should tip its hat our way for this story. C’mon Fox News, show some love!

That is all.

One would have thought that our city fathers might have learned something from the Boaty McBoatface calamity, which has been a slow-motion beclowning of “democracy” unfolding on social media all spring. (If by some chance you missed it, the British government asked the public to “vote” online to pick the name of a new super cool government research vessel. The descendants of the world’s most consequential empire chose “Boaty McBoatface,” and now the few remaining dignified people in London are trying to figure out how to disrespect democracy in some politically correct way.)

Apparently not. In Austin, a similarly ill-advised invitation to rename Robert E. Lee Elementary School (because Confederacy) came up with, er, Robert E. Lee in second place, behind only — drumroll, please — Donald J. Trump.

Who no doubt finished first because the opposition to him was divided among so many alternatives.

Nobody ever said democracy was pretty, folks.

Addendum: Look here for the full list of nominees, including the demographic characteristics of each — Adolph Hitler is “German/White” according to the official compilation, to which I suppose Austrians might object, or not.