Mayor Rahm Emanuel will move Wednesday to fill a “regulatory vacuum” that has given ride-sharing companies an unfair advantage over taxicabs, with no safeguards to protect consumers.
The 20-page ordinance, expected to be introduced at a City Council meeting, would license ride-sharing companies as “transportation network providers” and require them to pay an annual, $25,000 fee, plus $25 per driver.
UberX, Lyft, SideCar and other ride-sharing companies that allow drivers to offer rides in their personal vehicles to passengers who order them on their smartphones also would be required to pay the city’s $3.50 a day per vehicle ground transportation tax, already imposed on cabs.
To guarantee passenger safety, the ordinance would require licensed ride-sharing companies to train and administer drug tests to their drivers, conduct regular criminal background checks and make certain that their ride-sharing vehicles pass an annual, 21-point inspection.
Ride-sharing companies also would be required to secure “general liability” and “commercial auto liability” insurance with limits no less than $1 million per occurrence.
With all of its new regulation, the ordinance preserves the distinction between ride-sharing vehicles and cabs.
Instead of setting fares, the city would allow passengers and drivers to negotiate the fare “based on distance traveled, time elapsed during service, a flat, pre-arranged fare or suggested donation.”
Fares would have to be displayed on the company’s website, app or digital platform. Drivers would be prohibited from using a combination of time elapsed and distance traveled.
David Spielfogel, a senior adviser to the mayor, said Emanuel’s goal is to eliminate the “regulatory vacuum” for ride-sharing companies in a way that protects consumers.
“The mayor is very supportive of any additional forms of transportation that gives Chicagoans more options in getting around,” Spielfogel said, pointing to bike-sharing, and bus rapid transit.
“We’re imposing license fees. We’re forcing them to pay the ground transportation tax. And we’re setting clear rules like, they cannot pick up at the airport. They cannot hail riders. We think we struck a very good balance in ensuring that innovation is allowed to flourish in this city, but also that consumers are kept safe.”
The ordinance was drafted in consultation with a clout-heavy list of attorneys and lobbyists.
Uber was represented by attorney Michael Kasper, who helped Emanuel survive a residency challenge that nearly knocked him off the ballot. Lyft was represented by John Dunn, who once served as former Mayor Richard M. Daley’s director of intergovernmental affairs.
The taxicab industry was represented by Daley’s former corporation counsel Mara Georges.
Edward Feldman, another attorney representing cab companies, argued that the mayor’s ordinance does not go nearly far enough in leveling a playing field now tilted in favor of ride-sharing companies.
He argued that ride-sharing companies could “continue to use non-professional drivers without chauffeur’s licenses whose backgrounds are checked by the companies themselves,” under the mayor’s plan.
“The fees and taxes this ordinance would raise are tiny. The taxi industry pays over $24 million-per-year to the city. That will shrink dramatically if this ordinance passes,” Feldman wrote in an email to the Chicago Sun-Times.
“People operating in the same industry providing the same service should operate by the same rules. It is unfair to require taxi drivers to invest more and operate under strict rules, while letting other drivers invest less and operate under much lighter restrictions.”