DOWNTOWN — Gov. Pat Quinn signed a bill aimed at ride-booking services such as Uber and Lyft into law moments before leaving office Monday, and it could mean higher fares for cab riders as well.
The law potentially allows taxis that are contacted via a smartphone app to start using "surge pricing" in times of high demand, something that hasn't been allowed in Chicago.
The bill also sets basic statewide standards on insurance coverage and background checks for drivers that the city must observe, according to state Rep. Mike Zalewski (D-Chicago), the House sponsor.
Ted Cox says the law will likely be revisited soon:
The City Council passed a more moderate law in May, sponsored by Mayor Rahm Emanuel. Zalewski, meanwhile, sought to override Quinn's initial veto of a state law on the nascent industry, only to settle in December for a new bill passed by the General Assembly and sent to the governor.
The law Quinn signed Monday requires that "transportation network companies" have $1 million insurance policies, as well as $50,000 policies for collisions with uninsured and underinsured drivers and for personal injury to passengers and drivers. Those companies must pay for the insurance if the driver's insurance doesn't cover commercial use, as many ride-booking service opponents have insisted is the case in most instances.
The new state law also calls for criminal background checks for all ride-booking service drivers, including a check of the state's sex offender list, and sets a "zero-tolerance" standard for drug and alcohol use by drivers.
Emanuel spokeswoman Libby Langsdorf said the city ordinance established "sensible regulations to support innovation in the ride-share industry and ensure the safety of passengers."
She called the state law "a similar approach — one that does not preempt the city’s ordinance — allowing for increased transit options for residents and visitors and helping to the create new jobs."
Langsdorf added that the city’s ordinance "also includes regulations such as background checks, training and vehicle inspections that further work to ensure public safety, and protect both business and consumers."
Yet the state law also extends "surge pricing" to taxis, if they're hailed through a ride-booking service like Uber, which recently predicted fares could hit $100 on New Year's Eve because of high demand.
Taxis had been held to fixed rates in the city.
Zalewski said Monday, after his bill was signed into law, that it "does not preempt home rule authority" and is "concurrent" with the city ordinance.
"We don't preempt the city ordinance, because we want to give the city the right to still regulate ride-sharing," Zalewski said.
But, he added, with ride-booking firms like Uber and Lyft expanding into Rockford and Springfield, and he estimated, soon into Downstate college towns like Champaign-Urbana and Bloomington-Normal, "I think it was smart to have a local basic framework in place."
Mara Georges, a former city attorney who is now a spokeswoman for the taxi industry, said cabbies preferred the earlier bill, but called the new law "a step in the right direction" for putting in place "some minimum statewide standards" for ride-booking companies to "level the playing field" with taxi firms.
But she said the extension of surge pricing was a mixed bag for taxi companies.
"It certainly means the ride-sharing companies make more money," Georges said. "It does at least allow taxicab drivers to compete economically with their ride-sharing counterparts."
"The state statute requires that surge be allowed for practically anyone," Zalewski said, adding, "Chicago can still regulate surge."
Technically, Uber is not even licensed yet with the city, but Langsdorf said the ride-booking service is "in process of getting licensed and getting into compliance with the ordinance as a condition of licensure."
"We can always revisit it," Zalewski said of the General Assembly. "As a matter of fact, I know we'll revisit it."
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