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Ride-Sharing Firms Rail at City Council Delay Moving Battle to Springfield

By Ted Cox | May 1, 2014 5:51pm
 Ride-sharing firms like Lyft (l.) are crying foul over a delay in implementing a new city license, thus clearing the way for a state bill more beneficial to taxis.
Ride-sharing firms like Lyft (l.) are crying foul over a delay in implementing a new city license, thus clearing the way for a state bill more beneficial to taxis.
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Justin Sullivan/Scott Olson

CITY HALL — Ride-sharing firms assessed the fallout from the move to delay a new city license on the nascent industry Thursday, while cab companies cheered the move and refocused their attention on state legislation in the General Assembly.

The procedural move by Aldermen John Arena (45th), Roderick Sawyer (6th), Anthony Beale (9th) and Ricardo Munoz (22nd) at Wednesday's City Council meeting effectively means a state bill ride-sharing firms consider protectionist for taxis will get free play before the city can act.

"They’ve stalled a bill in Chicago, where the service is provided, in order to run to Springfield to try to get a better deal that will stymie ride sharing," said Jamie Crain, a spokeswoman working on behalf of Uber. "There is no rationale for pursuing a bill in Springfield when the city is about to act."

Crain urged the General Assembly to "allow home rule to prevail and let the City of Chicago pursue its ordinance."

Crain said the company's position was that "UberX would not be able to survive anywhere close to its current form if the state bill passed in its current form." Uber also has a smartphone app that hails conventional cabs, but UberX is its independent ride-sharing service with its own drivers.

Paige Thelen, spokeswoman for Lyft, known for its cars with furry mustaches, called the state legislation "a taxi-industry protection bill that not only pre-empts Chicago’s home-rule authority, but undermines common-sense regulations that prioritize safety and accountability."

In spite of the delay, she added, "We are hopeful that the ordinance will pass at the next full City Council hearing. While the ordinance requires Lyft to dedicate significant engineering resources to new functionality and pay substantial fees to the city, we applaud Mayor Emanuel and his administration for drafting common-sense regulations that prioritize safety and accountability without stifling innovation and consumer choice."

The delay irritated Mayor Rahm Emanuel as well. "Every day that passes without an approved ordinance is another day that ride-share companies are operating in a regulatory vacuum and without the safety regulations that include driver background checks, consumer protections and mandatory insurance," said mayoral spokesman Bill McCaffrey.

Yet Mara Georges, spokeswoman for the Illinois Transportation Trade Association, a lobbying arm of the taxi industry, cheered the delay, saying it "demonstrates the need for more public discussion around this important issue."

Georges repeated her call for an even playing field between taxis and so-called ride-sharing firms, which Emanuel's proposed city ordinance terms "transportation network providers."

"People have the right to know that the same consumer and public-safety protections are in place for everyone in the transportation business, regardless of what kind of car service they use," Georges said. "Whatever ordinance the city passes should have the same requirements for all drivers."

The state bill calls on ride-sharing firms to carry more insurance than taxis and calls on drivers to get a chauffeur's license if they operate more than 18 hours in a week. Crain called the proposed city ordinance "more flexible."

The city ordinance would establish a two-tier licensing system, separate from taxis, with those firms with drivers averaging 20 hours a week called on to agree to third-party car inspections and driver background checks, while those with drivers averaging less than that largely self-regulating. The higher tier would also set an annual fee of $25,000, while the lower tier would pay $10,000. Both would pay an additional $25 a driver.

Yet the state bill has a provision that local governments can impose stricter standards on ride sharing, but not anything less restrictive, which would overrule the city ordinance.

The taxi industry complains the unfair competition undercuts the value of Chicago's 7,000 taxi medallions, which the city has previously auctioned at an opening bid of $360,000.

The state bill is expected to be considered in the Senate this month after previously passing the House. Gov. Pat Quinn has not said whether he would sign the bill into law. The city ordinance will be reconsidered at the council meeting later this month after previously being approved by the License Committee.