Tech-Powered Transportation Network Rivals Join Forces for Groundbreaking Capitol Battle

Tech-Powered Transportation Network Rivals Join Forces for Groundbreaking Capitol Battle

Tech-Powered Transportation Network Rivals
Join Forces for Groundbreaking Capitol Battle

By Mike Hailey
Capitol Inside Editor

A battle at the Texas Capitol is shaping up on an issue that turned Chicago into a war zone in the 1920s as new age ride-sharing firms prepare to lock horns with old school taxi cab companies in a showdown that has the potential to be expensive and intense.

While no one expects gun fights, bombings or other acts of organized violence that the Windy City taxi wars featured, the stakes will be high nonetheless with the Texas Legislature becoming the next major battlefield in an international confrontation between app-driven upstarts like Uber and Lyft and the long-established taxi services.

The so-called transportation network companies that rely on smart phones to connect passengers with drivers have enlisted some of the most powerful lobbyists in Austin in a push for a regulatory framework at the state level that will be more consistent and uniform than a patchwork of ordinances that some cities have adopted.

Yellow Cab and other taxi companies are in the opposite corner and adding muscle at the statehouse here as well in an attempt to protect their share of the market from the new competitors who they view as interlopers that have undercut prices with a service that isn’t as safe or accountable or as legal in some places.

The San Francisco-based Uber Technologies has selected veteran Austin lobbyist Rusty Kelley to spearhead a proactive statehouse offensive that will attempt to keep new state regulations that may be inevitable from being overly restrictive. Uber has beefed up its team here with other influential lobbyists like Robert Miller, Craig Chick and Tristan Castaneda along with their partners and associates in separate groups that they lead.

Lyft – a transportation network firm that’s emerged in the past couple of years as Uber’s chief rival – will be on the same side in the upcoming Texas Capitol blitz with lobby members Jim Grace of Houston and Russ Keene of Austin representing the ride-sharing company during the regular session that’s been under way for almost a month.

Texas Taxi, the Houston-based parent company for Yellow Cab and other subsidiaries, has countered by signing Allen Blakemore on for a Capitol effort that Austin lobbyist Joe Garcia had handled as a solo operation just two years ago when the threat of competition from ride-sharing firms was starting to emerge.

Blakemore, a Houston political professional who’s been one of the state’s top Republican campaign consultants throughout the past decade, can expect to have more muscle as a lobbyist than ever this year as Lieutenant Governor Dan Patrick’s chief strategist in his bid for the Senate presiding officer’s post in 2014.

Garcia, who directs the Texas Taxi political action committee, has been a major player at the statehouse for years as a member of the Texas Capitol Group that features several of the most prominent lobbyists inside the Austin beltway. Texas Taxi has also enlisted Austin lobbyists Michelle Wittenburg, Tony Hernandez and Fred Shannon while Tim Reeves is registered to lobby for Yellow Cab.

Texas Taxi’s president is Roman Martinez, who served in the House for 10 years as a Houston Democrat and chaired the Labor & Employment Relations Committee during his final term that ended in 1993. Martinez, however, hasn’t been a registered lobbyist for the taxi company that he heads.

Uber and Lyft prevailed in a clash with Texas Taxi at city hall in Houston last summer despite warnings from cab owners about rogue drivers and regulatory double-standards and unequal treatment. Uber has been the biggest and most aggressive force in the modern-day taxi battles as a transportation network firm that is operating in almost 280 cities across the globe with a service that’s available in nearly two-thirds of the United States.

Four states enacted regulatory changes last year that Uber supported – and city councils in the four largest Texas metropolitan areas have adopted standards that have received mixed reviews from the ride-sharing firm and competitors that have banded with it for the fights at state capitols and local government arenas.

Uber has shown a willingness to play hard ball as evidenced by a threat late last week to drop out of the San Antonio market if the council there doesn’t move quickly to relax regulations that it imposed on the company in December. San Antonio officials have no way to tell if Uber is bluffing in light of the novel nature of the battle at hand.

The regulations that various states have put into effect have been similar in some respects and more restrictive in others. Colorado passed a law last year that required ride-sharing companies to comply with liability standards that Uber was already meeting there. But California lawmakers voted for more stringent regulations that will increase liability coverage for the transportation network operators if they are not modified by summer.

State legislators in Illinois enacted measures that force Uber drivers to carry official photo identification while giving passengers an advance estimate of the cost of a ride. But the governor at the time, Democrat Pat Quinn, vetoed legislation last summer that taxi companies had supported in a move that would have forced Uber and Lyft and other ride-sharing firm to conduct stricter background checks on drivers.

Massachusetts has been the latest state to get on the bandwagon with Republican Governor Charlie Baker preparing to team up with the mayors of Boston and other major cities to craft a regulatory licensing package in a state where the ride-sharing industry has been in turmoil recently. But Baker has given the ride-for-hire firms the green light to keep doing business in the state that he leads until the plan that’s expected to include background checks, safety inspections and adequate insurance for the transportation services that he apparently sees as an innovative component to economic growth there.

Smart phone owners can flag down a ride through Uber on an app that they’ve downloaded and monitor the progress of the driver who’s being dispatched to give them a lift to a prearranged destination. The driver, however, is using his or her own personal vehicle as an independent contractor for all practical purposes. The fee is processed with a credit card transaction between the passenger and the company – and tips are not expected. The ride tends to be less expensive than a taxi fare to the same location would cost regardless of the tipping amount. But taxi companies have warned that the trade off is a higher prospect for trouble in terms of the safety of the ride, the character of the driver and insurance protection in general.

The stakes will be as high as ever in the taxi wars at the Capitol in Austin where the outcome is difficult to predict given the uncharted territory on which the battle will play out. But the ride-sharing firms have the early advantage in terms of the sheer number of lobbyists with contracts this year.

Austin lobbyists Carol McGarah and Micah Rodriguez – a pair of Kelley team members at the firm Blackridge – also are registered to lobby for Uber. Miller’s teammates at the Locke Lord law firm lobby shop that he leads are representing Uber as well with Yuniedth Midence Steen and Gardner Pate on the transportation network company’s growing lobby list here. The Uber lobbyist brigade here also includes Michael Stewart of Austin and Paul Wageman of Dallas.

Possible reinforcements could be waiting in the wings if needed. Dallas Jones, the chief executive officer for the Houston public affairs firm Elite Change, will probably be in Austin on a regular basis in the coming months as a lobbyist for Houston METRO, Houston Community College and the GOP big donor group known as Texans for Education Reform. Jones, who’s also registered as a lobbyist for the powerhouse Austin lobby firm HillCo Partners, represented Lyft in the fight last year on ride-sharing regulations at the local level in Houston.