Maneuver delays vote on ride-sharing ordinance

Written By Fran Spielman Posted: 04/30/2014, 01:01pm

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Mayor Rahm Emanuel will have to wait to fill the regulatory vacuum that taxicab drivers say has allowed ride-sharing companies to siphon business from taxicabs, driving down medallion values and depressing cabbie income.

At Wednesday’s City Council meeting, Ald. Roderick Sawyer (6th) exercised his right to defer consideration of any matter for one meeting, joined by Aldermen Anthony Beale (9th); Rick Munoz (22nd) and John Arena (45th).

Sawyer said he used the parliamentary maneuver to delay consideration until June 26 because the ordinance does not go far enough to protect the highly regulated taxicab industry that has suffered at the hands of the unregulated ride-sharing companies.

“We are not ready for this ordinance to pass yet. There’s still some kinks to be worked out. There’s still some questions that need to be answered,” Sawyer said, during a pre-Council news conference with former Corporation Counsel Mara Georges, an attorney representing the taxicab industry.

Noting that a state bill that would go even further to regulate ride-sharing is pending in the Illinois General Assembly, Sawyer said, “Let’s do something that would benefit everyone: both the ride-sharing industry and the taxicab industry as a whole.”

Georges was more specific in pinpointing what she called the deficiencies in the mayor’s revised ordinance.

She argued that the insurance requirements are personal, minimal and “inadequate” because the coverage would kick in only after the “app is turned on and the driver accepts a call.”

And Georges maintained that the mayor’s plan to create two tiers of ride-sharing drivers based on hours driven — one highly regulated by the city, the other not — would leave passengers unprotected.

“The public deserves to know who they’re getting in the car with. Under this ordinance, the public will not have the confidence or the assurance that the driver has been vetted,” she said.

Georges further argued that Emanuel’s plan to “reserve the right” to cap surge pricing does not go far enough. That means ride-sharing companies and only ride-sharing companies can engage in the controversial practice of charging two- , three, and four-times normal fares during periods of high-demand.

“In other words, these hardworking drivers of taxicabs in the city of Chicago are handcuffed. They can’t play on a level playing field,” Georges said.

Last week, Emanuel scoffed at suggestions that he tilted the field. The Sun-Times has reported that the Hollywood talent agency owned by Ari Emanuel, the mayor’s brother, has an ownership interest in Uber Technologies, one of the major players in Chicago’s burgeoning ride-sharing industry.

“Look. Let me say this about Ari. He doesn’t need his older brother to get rich. Think of it as me getting back at him,” the mayor said then with trademark sarcasm.

Even though he allowed the ride-sharing industry to go unregulated for two years, the mayor said his legislative actions have been “just the opposite” of family favoritism.

“There is no industry that wants more regulation. The ride-sharing industry we’re regulating for the first time — and it’s the most comprehensive regulation anywhere in the country. The fact is, they don’t also support what we’re doing. That speaks for itself. … It was expanding before there were regulations. Now we’re putting regulations in to make sure there’s a level playing field and they’re not advantaged against regulated industry,” the mayor said.

Earlier this month, Emanuel strengthened his ride-sharing ordinance to referee the high-stakes competition between ride-sharing companies and taxicabs that has triggered lawsuits and created a full employment program for lobbyists.

It would require ride-sharing companies like UberX, Lyft and SideCar, which allow drivers to offer rides in their personal vehicles to passengers who order them on their smartphones, to monitor driver workloads, forward that information to the city and purchase the appropriate license based on hours driven.

Companies whose drivers average more than 20 hours a week would be required to pay $25,000 a year and $25 per driver for a Class B license.

Each driver would be required to obtain the same “public chauffeur’s license” required for cabdrivers, with City Hall conducting the drug test and background check. Companies would also be required to hire a third party to conduct a 21-point inspection of ride-sharing vehicles.

A Class A license would be reserved for ride-sharing companies whose drivers average less than 20 hours a week. Those companies would be required to pay $10,000 a year and $25 per driver. They would be permitted to do their own background checks, driver training vehicle inspections and random drug testings, but City Hall signoff would be required.

Ride-sharing companies at both levels of regulation would be required to secure $1 million in “commercial auto liability” insurance to make certain that the “first dollar of injuries or damages are covered” in the event of an accident.

Emanuel is still refusing to regulate ride-sharing fares, which the city does for taxis. But his ordinance reserves the city’s right to “place a cap on surge pricing” during periods of peak demand if the increased disclosure requirement fails to “alleviate consumer complaints.”

In the meantime, ride-sharing companies would be required to “publicly announce” when surge-pricing periods are in effect and “take steps to ensure that customers clearly agree” to those higher prices. That includes providing customers with a “true fare quote in dollars and cents” instead of a multiplier.

Ride-sharing companies would also be required to service “all parts” of Chicago — not cherry-pick the downtown area and the city’s most lucrative neighborhoods.

They would be prohibited from picking up street hails or riders at McCormick Place, O’Hare and Midway airports “unless the commissioner determines, in duly promulgated rules, following consultation with the commissioner of aviation, that such pick ups can be accomplished in a manner that preserves security, public safety and the orderly flow of traffic; and … designated taxicab stands or loading zones.”

Street hails would also be off-limits.

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