CITY HALL — The mayor tweaked his plan for regulating ride-sharing companies Wednesday in an ordinance that would limit "surge" pricing by companies like UberX, require more insurance coverage and offer different licensing options depending on whether drivers work 20 hours a week.
According to Mayor Rahm Emanuel's plan, companies with drivers averaging more than 20 hours a week would be charged $25,000 a year and $25 a driver and would be subject to city background checks and drug tests for drivers and a third-party inspection of cars.
Companies with the average driver working less than 20 hours a week would be charged $10,000 a year and $25 a driver and would be allowed to conduct their own background checks, drug testing and car inspection.
The ordinance also requires ride-share companies serve all areas of the city, like taxis. They would also be charged a fee for cars not equipped to handle wheelchairs, with that money going to the city's accessibility fund.
All would be required to carry $1 million insurance policies, "roughly three times what is required of taxis," according to the Mayor's Press Office.
"Surge" or "prime time" pricing allows companies like Lyft or UberX to charge customers higher fares — sometimes raising them by more than 400 percent during busy times. Emanuel's plan would limit these price hikes.
Despite the mayor's attempt at a compromise, however, both cab companies and so-called ride-share firms weren't fully on board.
"The goal of regulation should be to protect the public health and safety, not to protect political interest groups like taxi owners," said institute attorney Renee Flaherty. "While insurance requirements and vehicle inspections may make sense, these requirements should be tied to actual dangers to public health or safety. They cannot be allowed to turn into barriers to entry that do more to keep drivers out of work than to keep consumers safe."
Flaherty also objected to the city's continuing restrictions banning ride-sharing drivers from airports.
Andrew Macdonald, Uber's regional general manager, echoed many of those complaints.
"It’s premature to comment on the ordinance until we review it in full," Macdonald said. "However, Uber remains committed to common-sense regulations that put consumers and drivers — not taxi companies — first. We want to continue to engage in an open dialog with the city about these issues that will have very real consequences for drivers, riders and the city’s economy.
"Let’s find a permanent home for ride sharing in Chicago without imposing outdated taxi regulations that have failed both riders and drivers for decades," Macdonald added. "Uber offers best-in-class insurance coverage for drivers, unprecedented reliability for riders in all neighborhoods of the city and imposes strict privacy protections for both driver and rider data."
"We look forward to continuing the discussion toward a solution for ride sharing in Chicago that furthers public safety but allows for consumer choice and innovation to thrive," Lyft spokeswoman Paige Thelen said in a statement. "New technology provides an opportunity to increase safety above and beyond what has been done previously, which is why Lyft has implemented safety measures that are far more strict than what’s required of taxis and limos in Chicago and the State of Illinois."
Taxi firms and drivers have countered they can't compete on an even playing field with the upstart firms and compare the $360,000 opening bid the city has been asking at taxi-medallion auctions to the relatively low licensing fees for ride-share drivers.
"The industry is in shambles," Fayez Khozindar of the United Taxidrivers Community Council said during a committee hearing last month. "The industry is going down."
One taxi driver, who asked not to be identified as he also drives for UberX, said Wednesday any ordinance creating a separate license for ride sharing "is going to result in mass exodus of cabbies to UberX." He added it "will very soon result in [the] decimation of [the] Chicago cab industry. Uber will accelerate its heavy recruitment efforts that are aimed at Chicago cab drivers switching to doing UberTaxi. And it would be in their financial interest to do so."
Angela Benander, spokeswoman for the taxi companies, declined to comment Wednesday on the mayor's proposal and said the industry was focused on getting relief from the General Assembly in Springfield.
"While we applaud the city's efforts, the issue is one of statewide concern," Benander said. She added that taxi companies were throwing their support behind a bill by state Rep. Michael Zalewski (D-Riverside) that, for the most part, would call for ride-sharing services to be treated like taxis.
Ride-sharing firms and supporters have called that bill "onerous," and Macdonald said it produced "extreme disappointment" at Uber.
"After failing to bend the City of Chicago to their will, the taxi companies have sought support in Springfield to protect their industry from competition," Macdonald said. "The transportation needs of Chicago residents are being pre-empted by special interests, behind closed doors, and more than two hours away from the neighborhoods that desperately need cheaper, higher-quality and more reliable transportation options."
The bill would potentially derail Emanuel's compromise, as it allows home-rule governments to set stronger, but not more liberal standards on ride sharing.
Aldermen have been divided over the issue. Ald. Edward Burke (14th) has said the city has a vested interest in protecting the $2.5 billion in value from the city's 7,000 taxi medallions. Ald. Joe Moreno (1st) countered by cheering the "innovation" shown by the upstart firms and comparing the two sides to the Jetsons and the Flintstones.