Ride-hailing drivers owe city $15M, fueling demands for licensing

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Cab drivers say they need relief from unfair competition from ride-hailing services such as Uber and Lyft. | File photo

Uber and Lyft drivers owe Chicago taxpayers $15 million — for unpaid parking tickets, red-light and speed camera fines and overdue water bills — fueling demands to require them to get chauffeur’s licenses.

When Business Affairs and Consumer Protection Commissioner Maria Guerra Lapacek revealed the level of outstanding debt to the City Council’s License Committee, Ald. John Arena (45th) tried to seize on it. Arena moved immediately to hold Uber and Lyft drivers to the same licensing standards as cabdrivers.

Arena’s motion was rejected by a closer than normal, 6-to-5 vote. The License Committee then  forged ahead with Mayor Rahm Emanuel’s plan to appease struggling cabdrivers by reducing fines and relaxing licensing requirements. Cabbies have likened those tweaks to “shuffling the deck chairs on the Titanic.”

The mayor’s close-shave victory could be short-lived.

Two powerful aldermen — License Committee Chairman Emma Mitts (37th) and Transportation Chairman Anthony Beale (9th) — declared their support for the chauffeur’s licensing requirement to give the city a hammer to use against Uber and Lyft deadbeats.

At Wednesday’s City Council meeting, Beale said he plans to introduce a licensing ordinance that targets  company licenses as an interim step. He argued that the “votes are there” to approve both licensing measures over Emanuel’s objections.

“Why continue to let these guys drive when they owe $15 million?” Beale asked Lapacek.

“We continue to take this very soft approach ride-sharing. We need to drop the hammer on both [ride-hailing and taxicab drivers] or don’t drop the hammer at all.”

Beale portrayed the $15 million in outstanding debt owed by ride-hailing drivers as the tip of the iceberg.

He charged that Uber and Lyft owe the city “millions” more because they’re not collecting the $4-a-ride departure tax that supposed to be imposed on pick-ups made at O’Hare and Midway Airports and McCormick Place.

“If any company owed that kind of money to the city of Chicago, they could not renew their license,” Beale said.

Uber spokesperson Brooke Anderson said the ride-hailing giant is “working closely” with the city to “ensure that all drivers are in good standing” with the city’s Department of Finance.

“We’re in the process of notifying drivers who owe a debt of their duty to enter into a repayment plan or be de-activated from the Uber platform. We expect this to be resolved in the coming weeks,” Anderson wrote in an email to the Chicago Sun-Times.

Mitts portrayed the chauffeurs licensing requirement as pivotal to saving Chicago’s dying taxicab industry.

“We need to level the playing field. The taxi industry has been around a long time. Maybe they didn’t do what they should have done [to adjust to ride-hailing and that’s part of] the reason why we have this issue. But, I don’t think that’s a reason to punish ’em forever and drive ’em out of business,” Mitts said.

Without requiring a chauffeur’s license already mandated for cabdrivers, Arena said Uber and Lyft drivers will “continue to thumb their noses at the city’s pitiful level of regulation.”

“We have nothing to take away from them right now. They’re like, ‘We don’t have to pay it. What are they gonna do?’ There’s no regulation over them.’ We need a stick to use on them when they do not comply with the law,” Arena said.

Lapacek countered that requiring Uber and Lyft drivers to obtain chauffeurs licenses “not the answer” to what ails the taxicab industry.

“People think it’s going to answer all of the problems. It’s not going to answer all of the problems. Other jurisdictions have licensed their TNP drivers. They have the very same issues that we’re having with respect to medallion values falling and competition in the market,” Lapacek said.

As for claims the taxi industry is on the “verge of collapse,” Lapacek said she doesn’t buy it. She argued that the industry has gone through “ups and downs for the last 50 years” and the current dilemma is more of the same.

“The issues we have to address are issues within the industry. We have to help the drivers with technology. We have to make sure drivers understand they are customer service representatives. People will flock back to the taxi industry when they feel that the product and the service is good. That’s where we have to address their efforts,” the commissioner said.

Last fall, Emanuel gave cabdrivers a 15-percent fare increase but handed ride-hailing companies the lucrative right to make pickups at O’Hare, Midway, McCormick Place and Navy Pier.

Cabdrivers accused the mayor of giving away the store to Uber, the ride-hailing giant whose investors include Hollywood super-agent Ari Emanuel, the mayor’s brother.

Uber and Lyft ultimately came out the big winners after after Emanuel forged a compromise to salvage the plan amid City Council opposition.

Instead of making chauffeur’s licenses a condition for making airport pickups, as aldermen had demanded, Emanuel agreed to study the idea and charge the burgeoning industry 2 cents more per ride in the meantime – for a total fee of 52 cents.

At least some of the money was used to help cabdrivers defray the cost of obtaining a chauffeur’s license.

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