Uber, the ride-sharing service that lets customers summon transportation using a smartphone application, has announced it will make good on its threat to cease doing business in San Antonio, Breitbart Texas has learned. The San Antonio City Council passed a new ordinance last December in a 7-2 vote, to be effective on March 1, and Uber says that if the ordinance is allowed to go into effect, they will leave the city.
Even before the ordinance was passed, San Antonio already had the most restrictive regulations in Texas for “transportation network companies,” or TNCs, a category that includes traditional taxi and limo companies as well as Uber and its competitor Lyft, according to a study by the free market think tank R Street Institute. As Breitbart Texas reported, San Antonio’s new ordinance imposes additional requirements for insurance, driver testing, and vehicle inspections for TNCs. At the time the Council was debating the ordinance, Uber’s General Manager for Dallas, Leandre Johns, sent a letter criticizing the proposal as unduly burdensome on Uber and duplicative of existing laws.
Now, as the March 1 effective date for the ordinance approaches, Uber has sent another letter (embedded at the end of this article) to the San Antonio Mayor and City Council, announcing that they cannot do business with that law in place. The letter, from Uber Texas General Manager Chris Nakutis, cites the “sensible regulatory frameworks” and “smart regulations” passed by Austin, and criticizes San Antonio for doing the opposite, saying that the ordinance “applies insurance levels significantly higher than what is required of taxis in the city and creates unnecessary hurdles and costs for those who want to make a living using the Uber platform.”
“Worst of all,” he continues, “it is unclear how these added burdens even add to the protection of the safety of riders and drivers…Expensive fees, excessive insurance regulations, and burdensome processes do not enhance public safety; they will eliminate a safe transportation option.”
“We have spent the past month examining how these pending regulations will impact our ability to do business in San Antonio when they are implemented on March 1,” writes Nakutis. “After much consideration, it is clear that these regulations will cripple Uber’s ability to serve drivers and riders in San Antonio. A vote in support of these regulations was a vote against ridesharing, and if the rules remain unchanged, Uber will have no choice but to leave San Antonio.”
Josiah Neeley, the Texas State Director for the R Street Institute, concurred with Uber’s assessment of the heavy impact of the ordinance. “When you look at the sheer number of different burdensome requirements in San Antonio’s ordinance, it’s not surprising that Uber isn’t able to effectively operate in the current environment,” said Neeley. “Hopefully this will send a wake up call to the city to revisit the issue soon.”
A source at Uber confirmed to Breitbart Texas that San Antonio is the only city in Texas that has passed regulations that the company deemed too burdensome for them to continue operations, and the only one that has received letters threatening to leave the city. The same source told Breitbart Texas that San Antonio Council Member Ron Nirenberg, one of the two who voted against the ordinance, has reached out to Uber, but otherwise Breitbart Texas was not able to confirm any response from the city. The San Antonio Express-News likewise reported that they had reached out to Mayor Ivy Taylor and Council Member Rebecca Viagran for comment, but did not receive a response.
Uber notified their San Antonio area drivers of the situation in an email )embedded at the end of this article) from Uber San Antonio General Manager Henry Carr on Wednesday. The email explains that because San Antonio has passed “an ordinance that applies unworkable regulations,” if it goes into effect, “we will have no choice but to to leave town.”
Carr’s email also points to the “hefty fees on drivers” as one problem with the ordinance: “Austin requires drivers to pay $0.00, Houston only requires $11.01, and San Antonio requires $175.00.” Carr’s email ends by urging Uber’s San Antonio drivers to contact the City Council and ask them to repeal the ordinance.
Uber’s competitor Lyft has not yet confirmed whether they will also cease operations in San Antonio. The Rivard Report website reported that Lyft spokesperson Chelsea Wilson had emailed a statement saying that, “Unfortunately, without any changes to the law before the March 1st date of compliance, it will be extremely difficult for our peer-to-peer model to operate in the city.” The Rivard Report also bemoaned San Antonio’s “notoriously sub-standard” taxi service and worried about the long-term impact on the city’s transportation options.
Follow Sarah Rumpf on Twitter @rumpfshaker.