Next regulatory steps for TNCs and ridesharing

City Council has passed a regulatory framework for Transportation Networking Companies like Uber / Lyft. (The “TNC” name comes from the idea that they are creating networks of drivers and passengers to match.)  A lot of the regulatons are nitty, gritty details of whose insurance applies in what situations, who conducts what background checks, etc.  But the basic framework is pretty straightforward: TNCs are mostly allowed to operate, as long as they follow some rules. In some ways, the rules that they have to operate with are far more liberal than the rules under which taxicabs operate.  This is true in small ways, such as slightly different insurance requirements, and in large ways, like the fact that taxi drivers and companies do not have the right to set their own prices.  (Taxis, of course, retain a right that TNCs don’t: picking up street hails.)  Now that the political hubbub of getting an initial ordinance has passed, I’m sure that reconciling these two frameworks and harmonizing the requirements will be some of the next regulatory discussions, especially the approach toward generating access for the mobility impaired.

However, I’m more interested in talking about what big changes could come next.  First up,


Both Lyft and Uber have begun to operate true ride-sharing services. Uber’s is known as Uberpool and Lyft’s is known as Lyft Line.  With these services, you request a ride (giving you starting and ending destinations) and opt-in to the service. They attempt to match other riders who are taking similar trips, then pick you up in turn and drop you off in turn. If they cna’t match, they will simply dispatch a driver to take you alone. Because of the efficiencies of taking multiple passengers in the same vehicle, the passengers get a discount, the drivers and the TNC make extra money (2 passengers fares with 20% discounts still add up to much more than 1 fare at full price), and everybody else benefits by having fewer cars on the road.To my mind, this is pretty much exactly what we want to encourage. Although I argued that TNCs may reduce congestion by acting as an emergency outlet allowing households to remain car-free, this service has a much more direct effect on reducing congestion, by combining two or more rides into a single ride.

True to their Silicon Valley ethic, both launched these services with questionable legality in California and have since received letters from California regulators telling them they were violating the law. If we in Austin could get out in front of California and legalize carpooling in this form, we could become innovators in not only using TNCs to reduce drunk driving and help car-free households, but also in attempting to use them to lower transportation costs and reduce congestion.


Commute Carpooling

My understanding of the Uber/Lyft platform today is that it’s built on the idea of a driver making themselves available and then picking up requests that are sent to them. They are free to reject requests, but rejecting too many may disqualify them from future work.  An obvious expansion of their services would be for a driver to log in, say where they are going, and then match them with drivers. At this point, the carsharing service moves from being a nifty, well-run vehicle-for-hire service to being an ad-hoc carpool service. A driver who needs to drive into downtown from Northwest can advertise his services and pick up 4 others making a similar trip. The advantage this would have over traditional carpooling is merely convenience and ease of access.  You don’t have to set up a standing carpool, communicate with all your regulars about whether they’ll be late, etc.  Instead, you rely on the network to match those who are driving with those who are riding. I don’t believe that any new regulations are needed for this, but there might need to be changes in the TNC’s model.

Van Service

Eventually, Lyft and Uber may begin butting up against new private, data-driven transit services like Bridj, and at that point, there will be many regulatory changes needed.  Currently, for example, there are limits on the number of passengers in a given cab.  But for commutes such as the weekly, weekend back-and-forth between West Campus and downtown, a private provider might be able to provide a better, more specialized service for these passengers by bridging the gap between cabs and buses.


TNCs are not some solve-all that will single-handedly answer “the transportation question” for the city of Austin, but I have high hopes that they will go on to be far more than just taxis by another name. Indeed, in the process, I hope that taxis will see a huge improvement too.

Next regulatory steps for TNCs and ridesharing

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