City explores allowing smart phones for ride-sharing

By • on August 15, 2013

Question is whether taxi laws are being broken

July 24, 2013

Omar Lewis


AUSTIN (KXAN) – The city of Austin’s transportation department on Wednesday will talk to transportation users and service providers about whether smart phones could become catalysts for ridesharing programs.

The department said in a report to the City Counci l that several U.S. cities are seeing smart phones apps to effectively dispatch illegal taxis to would be riders. Cities such as New York and Philadelphia are taking action to prevent the activity because it violates their taxi ordinances, the report says.

"There is no question that technology is rapidly changing and offering new opportunities to promote policies on alternative transportation options in Austin," the report says.

In Austin, the city has ordered at least one rideshare company to quit operating after issuing a cease and desist order. That company, SideCar, has filed a lawsuit seeking to allow it to remain in business in Austin.

In February, the city’s transportation department started cracking down on these types of mobile transportation apps that open up shop in Austin.

"Penalties would be the car would be impounded and they would have to pay fees and its also a Class C misdemeanor," said Steve Grassfield of the Austin Transportation Department.

Enforcement against those drivers was a decision that didn’t sit well with everyone.

"Let people figure out their transportation," said driver Bobby Davis. "Why shut that down when we have people sitting around waiting in traffic all the time."

The City Council has asked the Transportation Department to conduct more research before a final recommendation is made. The department has highlighted several concerns in their report to the council.

The first, they want to know if allowing these services will create an unfair advantage over taxi cab companies that face stiff regulations. The other concern is safety.

"When you’re paying for them you don’t know what’s going to happen to you," said Austin driver Zanaida Perez. "You cant trust them I’m sorry you cant trust anyone these days.

Taxi-cab drivers in Austin are required to have insurance and undergo background screenings.

The ATD has already listed four recommendations in a "Rideshare Report". Besides flat out regulating or deregulating the service the city council could allow the apps to work the same as taxi cab franchises.

Another option is to keep the service unregulated and allow drivers to be reimbursed up to federal rates.

A final recommendation is expected to be made to the city council on August 22nd.

Wednesday’s meeting starts at 6 p.m. in Room 325, One Texas Center, 505 Barton Springs Road. If you are unable to attend you can email recommendations to

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