Texas Can't Get Its Innovation Act Together: Fails To Pass Bills To Let Tesla & Uber Provide Service

from the corruption-index dept

Thu, May 21st 2015 9:10pm — Mike Masnick

Last year, we wrote about two key "corruption indicators" in city and state governments: they ban direct sales models to block Tesla from competing with traditional car companies and they ban Uber/Lyft style car hailing services to protect local taxi incumbents.

It appears that Texas is really trying to wave its anti-innovation flag as strongly as possible as the legislature down there failed to move forward on two key bills that would have made it possible for Tesla to do direct sales in Texas... and to stop local cities from blocking Uber & Lyft to favor taxi incumbents.

A Texas House deadline has come and gone, killing many top-priority bills for both parties — among them one that would allow Tesla-backed direct car sales and another to regulate ride-hailing companies. Midnight Thursday was the last chance for House bills to win initial, full-chamber approval. Since any proposal can be tacked onto other bills as amendments, no measure is completely dead until the legislative session ends June 1. But even with such resurrections, actually becoming state law now gets far tougher.

And, of course, this comes just after the FTC warned Michigan for its blocking of direct sales of cars like Tesla.

The failure to allow direct sales is a much bigger deal than the car hailing stuff, but both are bad. And the response from Texas politicians is really quite disgusting:

Rep. Senfronia Thompson — one of the House's most senior members currently serving her 20th term — said it was the company's own fault that the bill didn't pass.

"I can appreciate Tesla wanting to sell cars, but I think it would have been wiser if Mr. Tesla had sat down with the car dealers first," she said.

Really? In what world is it considered appropriate to force an innovative company that wants to go direct to consumers to first "sit down" with the gatekeepers that are trying to block them? "I can appreciate Amazon wanting to sell books to people, but I think it would have been wiser if Mr. Amazon had sat down with retail store builders first." "I can appreciate YouTube wanting to let anyone upload videos, but I think it would have been wiser if Mr. YouTube had sat down with TV producers first."

That's not how innovation works. At all. And thus, we can cross Texas off the list of innovative states.

The law around car hailing is not quite as big of a deal, but without the new Texas law, various cities within Texas can still create their own rules that would effectively make it impossible for such services to operate there. There are states that create spaces for innovation -- and then there are those that protect incumbents. Texas appears to be making it clear that it's the latter. If I were a startup in Austin, I might consider finding somewhere else to operate.

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Filed Under: car hailing, corruption, direct sales, electric cars, regulations, ride sharing, senfronia thompson, texas
Companies: lyft, tesla, uber

31 Comments

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That One Guy (profile), 21 May 2015 @ 8:33pm

Too good to pass up
"I can appreciate Tesla wanting to sell cars, but I think it would have been wiser if Mr. Tesla had sat down with the car dealers first," she said.

"I can appreciate Emile Berliner wanting to sell records, but I think it would have been wiser if Mr. Berliner had sat down with the orchestral musicians first," she said.

"I can appreciate Karl Benz wanting to sell automobiles, but I think it would have been wiser if Mr. Benz had sat down with the horse-drawn buggy makers first," she said.

"I can appreciate the movie industry wanting to sell films, but I think it would have been wiser if Mr. Movie Maker had sat down with the live theater companies first," she said.

"I can appreciate Fred W. Wolf wanting to sell refrigerators, but I think it would have been wiser if Mr. Wolf had sat down with the ice sellers first," she said.
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Anonymous Coward, 21 May 2015 @ 9:32pm

"I can appreciate the USA wanting to be independent, but I think it would have been wiser if Mr. America had sat down with the King first."

Also, hasn't Mr. Tesla died a while ago?
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Anonymous Coward, 21 May 2015 @ 9:58pm

errrr....Maybe Mr. Telsa can come back to life to do that.
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Brian B. (profile), 21 May 2015 @ 10:02pm

This is what happens when you have septuagenarians voting on innovations in a fast moving world.
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You are being watched (profile), 21 May 2015 @ 10:25pm

Re: Too good to pass up
Don't forget Alexander Bell, who invented the telephone. He should have sat down with the telegraph companies as well.
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Teslas death ray farts in your general direction, 21 May 2015 @ 10:32pm

Err Innovation?
So Tesla is a car company that sells direct and Uber is a cab company that has creative ways of billing..

I'm not seeing the innovation,ah I had to think I make a cell phone that becomes obsolete every 2 yrs INNOVATION ! love me!

They shouldn't be blocked from operating but to call either company innovative is massively overstating the reality
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Anonymous Coward, 21 May 2015 @ 11:09pm

Re: Err Innovation?
... to call either company innovative is massively overstating the reality

innovation: "a new idea, more effective device or process"

Both companies are doing stuff that seems to fit the definition of the word as I know it. What definition are you using?
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PaulT (profile), 21 May 2015 @ 11:52pm

"I can appreciate Tesla wanting to sell cars, but I think it would have been wiser if Mr. Tesla had sat down with the car dealers first," she said.

So, she's so ignorant of the company that she doesn't even know that Elon Musk and Nicola Tesla are two different people, one of whom has been dead for 70 years, but believe her she's an expert on what their business model should be and who they should emulate? Why does that not surprise me?
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PaulT (profile), 22 May 2015 @ 12:11am

Re: Re: Err Innovation?
It's the usual tricks from the ACs around here. If they can't find a way to support the court's decision, object to the article or personally attack Mike, they'll just pretend that the business model under discussion is irrelevant. They used to do this all the time in articles about crowdfunding - once it stopped being a "gimmick" and had demonstrable results, they'd just wave it off as irrelevant because art used to be funded by patrons in the past.
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Powderhorn (profile), 22 May 2015 @ 12:44am

OK, so I'm piling on
(I'm moving to Austin next week from Oregon. This ignorance would be amusing if I weren't about to step in it.)

"I can appreciate wanting to sell Bibles, but I think it would have been wiser if Mr. Gutenberg had sat down with God first."
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Anonymous Coward, 22 May 2015 @ 2:37am

when is the USA gonna realise that 90% of the people elected into various public offices haven't got the brains of a rockin' horse? they are not interested in anything other than having a cushy time with fat bank balances achieved by voting to keep the incumbents, not the innovators, in positions of being able to screw the people! instead of continuing to vote these back into office, try voting for someone who has some vision, some foresight, that will hopefully enrich the lives of ordinary people!
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Ninja (profile), 22 May 2015 @ 4:09am

Re: Err Innovation?
I have never seen 1- an auto maker that sells directly to the public via the Internet and 2- services that allow you to get a ride from whoever is willing to give one for some bucks using a simple interface in your phone

I mean, surely you have so please point other examples aside from Tesla and Uber/Lyft.
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Ninja (profile), 22 May 2015 @ 4:11am

Re: OK, so I'm piling on
I can appreciate wanting to make ground breaking discoveries but it would have been wiser if Mr Einstein sat down with Newton first. Thinking about it, Newton didn't chat with God either.
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Anonymous Coward, 22 May 2015 @ 4:12am

TX is still hurting over the drop in oil prices so they wouldn't DARE let an electric car company step in, lol
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Anonymous Coward, 22 May 2015 @ 4:30am

Bought and Paid For
Senfronia sells her legislative power to high bidders. Mr. Tesla is not the only one to suffer. Mr. Microbrew is also a victim.

http://www.houstoniamag.com/eat-and-drink/gastronaut/articles/houston-march-2015
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Anonymous Coward, 22 May 2015 @ 4:53am

Jus' 1 queschun f'r yall
Duz Mr Tesla make a FDubyaD pickup? Aint nobudy n Texas gonna by a Tesla unles it's gotta gunrack, a coolr f'r beer ana bigass offrode kit.
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Paul Clark, 22 May 2015 @ 5:02am

Tesla Should Move To Canada
Tesla should move their headquarters to Canada. Then when a state tries to restrict their business, the can file a claim under NAFTA for the lost sales and then give the cars to the people in the state that want them. Problem solved.
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Padpaw (profile), 22 May 2015 @ 5:28am

I would not be surprised if the representatives are looting the state treasury since they don't seem satisfied with their yearly salary and instead have to pocket as much bribe money as they can.
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Anonymous Coward, 22 May 2015 @ 5:30am

Re:
Yeah, I'm sure car dealers would be quite freaked out a zombie Mr. Tesla showed up and said (or tried to say) "I want to sell my cars in Texas".
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cpt kangarooski, 22 May 2015 @ 6:17am

Re: Re: Err Innovation?
Actually in most countries you can buy cars straight from the manufacturer. The U.S. is unusual in requiring dealerships to be involved.
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Anonymous Anonymous Coward, 22 May 2015 @ 6:24am

Re: Re: OK, so I'm piling on
Better still, Mr. Abraham should have sat down with the Sumerians before creating Judaism, which then begat Christianity and Islam. Can't someone think of the poor Sumerians?
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Anonymous Coward, 22 May 2015 @ 6:49am

As a Texan
this is sad, but we have the same corrupt bullshit polyticks that everyone else has.

Repukes are just like Demtards, one is worth barf and the other is a tard, and we all still elect them into office. Maybe that makes the electorate a bunch of puketards?
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Mason Wheeler (profile), 22 May 2015 @ 7:01am

Re: Re: Too good to pass up
You do realize you're talking about the guy who ended up founding the American Telephone & Telegraph corporation, right? ;)
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Anonymous Coward, 22 May 2015 @ 7:31am

Re: Jus' 1 queschun f'r yall
As a Texan, who lives in Austin, I will say that this doesn't seem to have affected the sales of Teslas too much. I see them all over the place, usually at least once a day.

But that's not to say that this doesn't make me sick that we can't get our Reps to pull their heads out of their asses...
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Teamchaos (profile), 22 May 2015 @ 8:08am

You guys are all about how government stifles innovation, until you support using rules written in the 1930s to govern the Internet.
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John Fenderson (profile), 22 May 2015 @ 8:59am

Re: Re: Re: Too good to pass up
My inner pedant can't let this go... The Bell Telephone company (which later became AT&T) was not founded by Alexander Bell but by his father-in-law, Gardiner Greene Hubbard.
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John Fenderson (profile), 22 May 2015 @ 9:08am

Re:
Most people either don't know The 80/20 Rule, or don't know that it applies to everything that is. The general version of this rule can be stated as "80% of everything is crap."
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John Fenderson (profile), 22 May 2015 @ 9:12am

Re:
"all about how government stifles innovation"

I think that if you read through the archives of this site, you'll find that the stance tends to be less black-and-white than that. It's more along the lines of "government can be a force for good and ill, and we prefer the good."
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Anonymous Coward, 22 May 2015 @ 12:13pm

Re: Err Innovation?
There is no one so blind as he who will not see.
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Anonymous Coward, 23 May 2015 @ 3:39am

Re: Err Innovation?
Uber's innovation is that they have applied IT to produce a minicab dispatch service which eliminates almost all their disadvantages compared to ordinary taxis
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Teamchaos (profile), 24 May 2015 @ 5:23pm

Re: Re:
"government can be a force for good and ill, and we prefer the good."

We agree on that. I do believe that with most government interference in the marketplace the law of unintended consequences rears it's ugly head. The road to hell is, after all, paved with good intentions.

http://www.econlib.org/library/Enc/UnintendedConsequences.html
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