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Judge’s ruling strengthens hand of struggling taxi industry

Cabdrivers have a legitimate beef that Chicago’s disparate rules governing ride-hailing services and taxis violate the U.S. Constitution’s equal protection guarantee but it’s up to the City Council to sort it out, not the courts, a federal judge has ruled.

U.S. District Judge Sharon Johnson Coleman’s harshly worded April 25 ruling strengthens the hand of the taxicab industry and its City Council allies in the battle over a proposal to license ride-hailing drivers to level the playing field with cabdrivers.

After once again rejecting the city’s motion to dismiss and keeping alive a lawsuit filed by the taxicab industry, Johnson Coleman took aim at the disparate rules Mayor Rahm Emanuel imposed after authorizing Uber and Lyft to make pickups at O’Hare and Midway airports, depriving cabbies of their last bastion of exclusivity.

“Plaintiffs’ claim is that liveries and taxis that pre-arrange airport pickups via a smartphone app should have the same access to passengers as [ride-hailing services] at the upper level of the airport, rather than the congested lower-level,” the judge wrote.

Johnson Coleman then shot down the city’s claim that its purpose is “managing airport traffic and minimizing disruptions to customer expectations about where to find” taxis and liveries.

“There is no rational reason to distinguish between types of for-hire car with a pre-arranged pickup made through a smartphone app,” the judge wrote.

“In both instances, any vehicle creates more congestion in the area of the airport to which the vehicle is sent. The same would be true if cars of one model were sent one way and cars of another model sent a different direction.”

But the judge denied the cabdrivers’ request for a preliminary injunction preventing the city from enforcing the disparate airport rules.

“The injunctive relief plaintiffs are requesting puts the court in the position of acting as a super legislator by directing the city to apply parts of the [ride-hailing] ordinance to the taxi plaintiffs,” Johnson Coleman wrote.

“Plaintiffs are essentially asking the court to dictate the city’s transportation policy …. The court declines to grant such an extraordinary remedy. … Resolution of plaintiffs’ complaint is best directed to the legislative process.”

Former City Corporation Counsel Mara Georges, an attorney representing the taxicab industry, contends the judge’s ruling puts the City Council on notice to make a choice: Level the playing field by approving the pending licensing ordinance backed by 32 of the City Council’s 50 aldermen or risk having a judge order the city to do so and award costly damages to cabdrivers fighting for survival in the ride-hailing era.

“The ruling says that the disparate rules between taxis and ride-shares violate equal protection and the City Council needs to fix it,” Georges said.

The city remained confident it will come out on top.

“The court has already dismissed five of the seven claims in this suit, and the city is confident it will prevail on the remaining two claims. The court also rejected the plaintiffs’ request for a preliminary injunction, which plaintiffs are appealing,” law department spokesman Bill McCaffrey said.

“Significantly, the recent ruling clearly recognizes that the plaintiffs’ complaints about the current rideshare ordinance raise political and policy matters for the City Council to decide and not the courts. In fact, the court took the extraordinary step of challenging plaintiffs to identify a remedy the court both has the authority to impose and that would resolve these political and policy issues.”

Mayor Rahm Emanuel, whose brother is an Uber investor, is lobbying hard to kill an ordinance sponsored by Ald. Anthony Beale (9th), chairman of the City Council’s Transportation Committee.

The Illinois Transportation Trade Association is fighting equally hard to push the ordinance over the goal line. The group and its political action committee have contributed more than $35,000 to Chicago aldermen in recent months.

Beale’s ordinance would require Uber and Lyft drivers to get city chauffeur’s licenses, be fingerprinted by a city-approved vendor and get their vehicles inspected by City Hall.

A minimum of 5 percent of the total fleet of both companies would have to be accessible to customers with disabilities. And no ride-hailing vehicle could remain on the streets of Chicago that is more than 6 years old. Salvage, rebuilt and junk vehicles would be expressly prohibited.

Lyft and Uber — whose drivers owe the city $15 million in unpaid parking tickets, red-light and speed camera fines and water bills — would also be required to immediately settle those debts to renew their operating licenses.

Nearly half of Uber drivers have now settled their debts. Those who fail to do the same by May 23 will no longer be eligible to use the Uber platform, sources said.

Georges said Johnson Coleman’s ruling is all the more important because it comes on the heals of an October ruling that also took the city to task for regulating taxis and ride-hailing differently when it comes to everything from background checks, drug tests and vehicle age, to maintenance and inspection, insurance, annual fees and unregulated fares.

“In all of these areas, the requirements for taxis are far more onerous than for [ride-hailing services]. The city asserts that it has an interest in increasing the availability and accessibility of cost-effective transportation as well as fostering diversity and consumer choice in the ‘for-hire’ market,” the judge wrote then.

“While the court does not doubt that these are legitimate interests for the city to hold … the court fails to see how any of the purported differences relate to the stated rationale such that it justifies maintaining substantially heavier burdens on taxis for training, qualifications, drug testing, vehicle condition, insurance and fees. Both the purported differences between taxis and [ride-hailing] and their relationship to the stated rationale appear utterly arbitrary to this court.”