City Council urged to deregulate cab industry, not license Uber

If Chicago’s once dominant taxicab industry really does need a legislative life raft to avoid going under, the answer is less regulation on cabs, not more regulation on Uber and Lyft, an attorney representing ride-hailing drivers argued Monday.

Anthony Sanders, an attorney with the Institute of Justice, represents three ride-sharing drivers who have intervened in a federal lawsuit filed by the cab companies challenging Chicago’s disparate rules governing ride-hailing and taxis as a violation of the the U.S. Constitution’s equal protection guarantee.

On Monday, a federal judge issued a technical ruling that allows cab companies to consolidate all of their equal-protection and taking-of-property claims into one appeal before the 7th Circuit U.S. Court of Appeals.

Sanders used the occasion to propose an alternative to the pending ordinance backed by 33 of the City Council’s 50 aldermen that calls for the city to license ride-hailing drivers: deregulation of the taxicab industry.

“Even if ride-share drivers and taxi owners are being treated unequally, the way to fix that problem is not to shut down ride-sharing. The way to fix that problem is to lessen the burden on taxicabs. We think there should be open markets for both” cabs and ride-hailing, Sanders said.

“The biggest difference between taxicabs and ride sharing is that there are a limited number of taxicabs. We think the cap on medallions should be lifted. That would mean that anyone with a good vehicle and insurance could start their own taxi company without having to pay hundreds of thousands of dollars for a medallion. We would also be in favor of lifting fare restrictions on taxis, so both industries are treated in the same way.

Ald. Anthony Beale (9th), chairman of the City Council’s Transportation Committee, said he’s not about to withdraw his controversial licensing ordinance in favor of deregulation. He called the idea ludicrous and downright dangerous.

“Deregulation opens the door to allow them to do what they want, when they want without any repercussions. You have to have regulation to make sure you’re protecting consumers. You can’t allow someone to just make up with own rules,” Beale said.

“If Uber had their way, they still wouldn’t be licensed in Chicago. They operated for two years without being licensed. Everything was fine until they came into the city illegally unregulated. We’re having to pull them back. If they had come into the city the correct way, we wouldn’t be having these problems.”

Mara Georges, the longtime city corporation counsel now representing the taxicab industry, portrayed the call for deregulation of the cab industry as an acknowledgement that, “There is an equal protection violation that needs to be fixed.”

That’s precisely what U.S. District Judge Sharon Johnson Coleman has already stated, Georges said.

“From a public safety standpoint, policymakers have to ensure that vehicles that transport the public for hire are driven by licensed drives in inspected vehicles with adequate insurance,” Georges said.

“Asking the City Council to strip away all regulation for transportation-for-hire in Chicago is not a reasonable request. The city requires fingerprinting for all kind of different people doing business in Chicago. In effect, you’d have to ask the City Council to dispense with those requirements. That’s not a way to promote public safety.”

Before issuing the technical ruling that could pave the way for what Georges hopes will be an expedited appeal, Johnson Coleman concluded that cabdrivers have a legitimate beef that Chicago’s disparate rules governing ride-hailing and taxis violate the U.S. Constitution’s equal protection guarantee. But she argued that it’s up to the City Council to sort it out, not the courts.

Mayor Rahm Emanuel, whose brother is an Uber investor, is lobbying hard to kill Beale’s licensing ordinance.