A $10.4 million settlement triggered by inadequate driver background checks by ride-sharing giants Uber, Lyft and Via will be used to bolster mentoring programs for at-risk youth, Mayor Rahm Emanuel announced Thursday.
Last year, the City Council agreed to let Uber, Lyft and Via escape fingerprinting and let the ride-hailing and taxicab industries off the hook on background checks.
Instead, the city left it up to the companies to check their drivers against global, national and local databases to make sure they don’t have criminal records, recent moving violations or show up on sex offender registries or appear on a list of suspected terrorists.
The ordinance was billed as the strongest in the nation.
Where some cities declare a driver ineligible after three moving violations in the previous year, Chicago made it two. And instead of declaring drivers eligible five years after a criminal conviction, Chicago started its five-year clock after the final day of parole or court supervision.
On Thursday, those rigorous requirements paid dividends for Chicago’s never-ending battle against gang violence.
Uber, Lyft and Via got caught conducting inadequate background checks and agreed to pay a $10.4 million fine that Emanuel called the largest ever imposed on the industry for violations of that nature.
That’s $6.4 million from Uber, whose investors include the mayor’s brother; $4 million from Lyft and $62,500 from Via.
“They recognized from Day One that there was a significant process violation in the way that they were conducting their background checks and worked with us to ensure that any drivers who were operating on their platforms were no longer driving,” Corporation Counsel Ed Siskel told a City Hall news conference.
“The mayor, members of the City Council and the people of Chicago have recognized how important it is that there be thorough and effective background checks for people who are going to be driving for ride share companies. We take this very, very seriously and the fines and settlements announced today reflect that.”
Business Affairs and Consumer Protection Commissioner Rosa Escareno refused to say how many drivers fell through the cracks of the inadequate background checks.
Nor would she describe the nature of their past transgressions or say whether rider safety was ever at risk.
She would only say that there were “no complaints” to the city or the companies and that drivers who should never have been entrusted to drive are no longer behind the wheel.
Last fall, City Hall demanded that Lyft replace its background checker, review all of its drivers and conduct random audits with results shared with the city after acknowledging that one of its drivers had a federal conviction for aiding terrorism.
That embarrassing security lapse triggered a sweeping review of all ride-hailing drivers.
One month later, the state of Colorado accused Uber of placing passengers in “extreme jeopardy”-and slapped the ride-hailing giant with a nearly $9 million fine-for allowing 57 people with past criminal or motor vehicle offenses to drive for the ride-hailing.
Still, the City Council agreed to let Uber, Lyft and Via escape fingerprinting and conduct their own background checks, so long as they meet the city’s standards.
Escareno pointed to Thursday’s settlement as proof that fingerprinting is not required.
“The ordinance is strong. It works. And today, every driver has been re-checked,” she said.
Emanuel added: “We didn’t pass the ordinance to see if, on Mondays and Tuesdays you apply it and, on Wednesdays, you don’t. It has to be applied consistently and you have to follow through.”
Emanuel was more interested in talking about how he planned to spend the money — even before a City Council that controls the purse strings has authorized it.
Already, he claims to have surpassed his goal of offering “universal mentoring” for 8th, 9th and 10th grade students and opened enrollment to 7th graders with a $13 million contribution from the city and $12 million from private donors.
The $10.4 million in settlement funds will “extend the life” of that program and “expand its reach,” according to City Hall.
The mentoring program involves 60 community-based organizations in 22 Chicago neighborhoods plagued by gang violence.
“Chicago is at its lowest drop-out rate. There’s a lot that goes into that. But there’s no doubt that the mentoring program has had a significant impact on kids staying in school, finishing school and staying out of trouble,” the mayor said.
“I would love to take this down to first-grade if the federal government was a partner, if the state of Illinois ever showed up and did something. … It’s already having a dramatic impact on their academic success and the way they make choices in life not to get in trouble, what to do in the evening. Imagine what could happen if we were down in first-grade.”