New ridesharing rules OK'd; taxi industry upset by Emanuel's plan

A divided City Council on Wednesday approved Mayor Rahm Emanuel’s plan to fill the regulatory vacuum that has allowed ridesharing companies to siphon business from taxicabs amid warnings that it’s so weak as to render costly taxi medallions “worthless.”

The ridesharing industry whose investors include the mayor’s brother was pleased with the ordinance approved by a 34-10 vote.

The taxicab industry, its City Council allies and a union representing cabdrivers was not.

That’s because the ordinance that takes effect in 90 days does not regulate ridesharing fares or “surge-pricing” and does not restrict the number of companies, vehicles or drivers that could operate on Chicago streets.

It also creates a two-tier system that allows part-time drivers to escape rigid screening. And it opens the door to the lucrative airport market that UberX tried to enter illegally last month, only to be stopped by the city.

Ridesharing companies would be prohibited from picking up street hails or riders at McCormick Place, O’Hare and Midway airports “unless the commissioner determines, in duly promulgated rules, following consultation with the commissioner of aviation, that such pick ups can be accomplished in a manner that preserves security, public safety and the orderly flow of traffic; and . . . designated taxicab stands or loading zones.”

Ald. Anthony Beale (9th) was so incensed by the double standard, he tried and failed to send the ordinance back to committee for a further rewrite. The motion failed by a vote of 36-9.

“This ordinance will hit the hardworking men and women who drive cabs in our city. These men and women are the ambassadors of this great city. They drive tourists around,” said Beale, chairman of the City Council’s Transportation Committee.

“We asked them to get licensed. We asked them to get insurance. Yet we allow a company to come in that has the technology savvy to create an app. . . . They’re not paying $360,000 for a medallion. Those medallions will be useless if this ordinance passes.”

Emanuel countered that he carefully crafted “one of the most comprehensive ordinances in the nation” to regulate a new industry that has provided a popular transportation alternative that consumers demand.

“There’s a criminal background check that didn’t exist before. There’s a vehicle inspection that didn’t exist before. There’s training required that didn’t exist before. Those are a step in the right direction,” the mayor said.

“We had a good debate, thorough discussion. And we now have the type of comprehensive regulatory architecture that had not existed this morning. . . . This is not at the expense of the taxi industry. They have regulations. . . . Given that this industry is here, we have to set a set of rules and regulations that enhance public safety.”

Ald. “Proco” Joe Moreno (1st) added, “This is not about cabdrivers. It’s about medallion owners. Let’s not do their dirty work.”

The Chicago Sun-Times reported last week that the Illinois Transportation Trade Association, a trade group representing the taxicab industry, has formed a political action committee with an annual budget of $1 million.

Mara Georges, former Mayor Richard M. Daley’s corporation counsel, is the spokesperson. Senior advisers are Daley’s political enforcer Victor Reyes, the former Hispanic Democratic Organization (HDO) chieftain, and Mike Noonan, a former political operative for Illinois House Speaker Michael Madigan (D-Chicago).

The question now is what impact the ridesharing vote will have on those donations — which aldermen will be targeted for defeat and which aldermen will benefit from the political largesse.

No votes were cast by Aldermen: Bob Fioretti (2nd), Pat Dowell (3rd), Roderick Sawyer (6th), Anthony Beale (9th), Edward Burke (14th), Lona Lane (18th), Ricardo Munoz (22nd), Michael Zalewski (23rd), Jason Ervin (28th), Scott Waguespack (32nd), Nick Sposato (36th) and John Arena (45th). Aldermen Will Burns (4th), Leslie Hairston (5th) and Debra Silverstein (50th) were recorded as absent. Ald. Latasha Thomas (17th), who works with Victor Reyes, recused herself.

“While the taxi industry spends time and money trying to intimidate lawmakers with political retribution to defend its track record of horrible customer service and taking advantage of its workforce — the rideshare industry will move forward under this framework to continue to improve Chicago’s transportation system,” Andrew Macdonald, Uber’s Midwest regional manager, said in a statement released after the City Council vote.

“The City Council heard the message from thousands of riders and drivers who choose rideshare as a better way to travel in Chicago. It’s time for wealthy taxi medallion owners to hear that same message and end their anti-competition campaign against rideshare in the state General Assembly.”

Speaking for the taxi industry, Georges argued that the mayor’s ordinance “misleads the public and shields ridesharing companies from important consumer protections and public safety obligations. “ She argued that it “sets up a scheme to allow full time rideshare drivers to avoid police background checks through the use of ‘averaging’ all driver hours, instead of holding every individual driver accountable for their hours.”

Unlike the state bill that strikes the appropriate balance between protecting consumers and promoting transportation options, Georges said, “The city’s ordinance just doesn’t go far enough and will ultimately put consumers at risk.”