City Council cracks down on valet parking — again

SHARE City Council cracks down on valet parking — again

City officials want to boost how much in parking taxes they collect from valet operators. | Sun-Times file photo

The City Council tried again Wednesday to tighten the regulatory rein on valet parkers and made it tougher for SpotHero and other parking aggregators to avoid the city’s parking tax.

Downtown Ald. Brendan Reilly (42nd) was the champion of both ordinances, and for good reason. His downtown and River North ward is an entertainment and dining mecca plagued by parking, traffic and congestion problems.

Reilly’s never-ending battle against valet parking abuses will continue by controlling their hours of operation.

It would allow valet parking operators for restaurants, nightclubs and other businesses — that’s about 90 percent of all valets — to park cars only when the place is open for business — with just a little leeway before and after those official hours. Valet services “… may operate one-half hour before such location opens, one hour after such location closes or until all vehicles parked by the valet parking operator while the establishment was open are returned to their drivers, whichever occurs later,” the ordinance states.

“It’s these 24/7 operators that are operating well beyond the hours of the business they’re supposed to be serving that … tend to be the worst actors in this industry. Those tend to be the operators that get the most violations from the city,” Reilly has said.

“Those violations include things like parking cars without a valid driver’s license, parking cars without proof of insurance, parking cars without the proof of a valid lease with a parking lot or garage, which is required by law.”

Last fall, then-Business Affairs and Consumer Protection Commissioner Maria Guerra Lapacek told aldermen that valet parkers were still thumbing their noses at city regulation, despite countless efforts over the years to crack the whip and rein in chronic abuses.

Lapacek disclosed then that an eye-popping two-thirds of the 388 valet operators investigated by the city recently were not complying with off-street parking mandates and other city regulations.

The investigation triggered roughly $300,000 in fines, 2,500 administrative notices of violation and 73 “removal orders to cease and desist” valet operations, the commissioner said.

On the hot seat at City Council budget hearings, Lapacek said at the time it may be time to tighten the noose on valet operators once again.

“For example, the number of off-street parking requirements. Maybe that could get increased to stop the flow of vehicles on the street. Or changing some of the structure of the licensing so that we could have better control,” Guerra Lapacek said back then. “One of the problems we see in the valet world is similar to what we see in the tobacco world. The flipping. The constant [turnover]. Somebody goes out of business. Someone new comes into business. … That’s a harder thing for us to stop.”

Reilly has argued that limiting operating hours was the next logical step.

Bad operators will reflect on the restaurant or other business they’re affiliated with, he said.

“The valet company is an extension of that brand. If someone has a bad experience with that valet, the restaurateur or retailer is gonna hear about it,” Reilly said.

“When they’re on site and there’s a responsible adult managing that curb, we tend to have fewer problems. But once that business is closed, that accountability literally evaporates. We get a lot of complaints about valet companies. This is one more tool to make sure they’re behaving better.”

As more people use apps like SpotHero to save a downtown parking space, the city wants to make sure those services are collecting and passing along the taxes they owe. | Sun-Times file photo

As more people use apps like SpotHero to save a downtown parking space, the city wants to make sure those services are collecting and passing along the taxes they owe. | Sun-Times file photo

The crackdown on SpotHero and other parking aggregation services is yet another example of how regulatory rules need to change to accommodate the “sharing economy,” Reilly said.

It happened with home-sharing and ride-sharing after months of behind-the-scenes negotiations.

It needs to happen again to make certain that the new way of reserving a downtown parking space doesn’t shortchange the city.

Although parking aggregation services already are required to pay the city’s parking tax, many of those services don’t, and the city has no tools to stop it.

That’s where Reilly’s ordinance comes in.

“We’ve updated the code to require them to maintain electronic records which we can audit. That’s the big change. We need that tool to make sure we can check their books … just like we audit garage operators and parking lot operators today,” Reilly said.

“This doesn’t establish a new tax. It doesn’t raise a tax. It simply makes sure that all of the players in this industry are paying the same revenue to the city,” he said. “These apps are putting existing lot and garage operators at a tremendous competitive disadvantage because they must pay taxes to the city. These new apps are not collecting that tax.”

The parking tax currently stands at 20 percent for weekend parking and 22 percent for weekday or monthly parking.

Although parking aggregation services are already required to pay the tax, the Department of Finance agreed with Reilly that the ordinance “should be clarified” to cover “all users and organizations,” spokesperson Mary Kay Accurso wrote in an email.

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