Garcia: If Uber and Lyft quit Chicago, competitors will rush in
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To fight attempts at regulating their industry, the most popular app-based transportation providers, Uber and Lyft, respond with sky-is-falling scenarios.
Lyft has threatened to pull its business out of Chicago if an ordinance is passed that would require drivers to pass background checks, pay a $115 fee and pass a one-day course for licensing. Ride-hailing companies also would have to provide service to disabled residents, on par with cab companies, under new rules. The ordinance, proposed by Ald. Anthony Beale (9th), is slated for a vote by the City Council on June 22.
I dare Uber and Lyft to leave Chicago. It wouldn’t take long for other creative startups to take their place.
Last month voters in Austin, Texas, voted down a referendum to overturn an ordinance requiring fingerprinting of drivers. Uber and Lyft followed through on their threat and shut down operations in Austin. But other companies have started moving in.
In Chicago “market forces are so strong that someone else will at least partially fill the void, and it may happen sooner rather than later,” Joseph P. Schwieterman, a DePaul professor and director of the Chaddick Institute for Metropolitan Development said.
Lyft’s Joseph Okpaku, vice president of government relations made the threat of leaving last week, saying it was a “distinct possibility.”
Asked if Uber also is threatening to leave, spokeswoman Brooke Anderson said Uber’s low-cost service would be replaced by pricier chauffeur service. Part-time drivers might quit rather than go through the licensing process.
But another ride-hailing service, Via, is eager to expand. Via currently operates in Chicago on a smaller scale than Lyft and Uber. It uses a carpooling model.
Via spokeswoman Gabrielle McCaig said Via drivers already undergo fingerprinting, something Uber and Lyft are fighting.
“From our perspective, we don’t see it as a huge issue,” McCaig said of the ordinance. “We’re firmly committed to Chicago and can work in these regulatory boundaries.”
Initially, there could be inconveniences for riders and drivers if Uber and Lyft leave or fail to adapt to new rules, but life would go on without those companies.
Uber and Lyft have come a long way quickly by aggressively moving into cities, upending the taxi industry and fighting oversight. They throw their weight around and push for little or no regulation. These companies don’t like limits that cut into their bottom lines.
Sometimes elected leaders have to impose rules in the name of safety and fairness.
Mayor Rahm Emanuel can’t shake the perception that he is helping out Uber’s politically-connected advisors and investors, including his brother, Ari, with his attempts to kill the proposed ordinance.
From the get-go, Emanuel let Uber and Lyft run roughshod over the taxi industry by allowing them to operate by a more lenient set of rules. In the last eight months, judges noted the disparate rules in two lawsuits cabbies filed against the city. Those suits are ongoing. In April, a federal judge said resolution for taxi drivers “is best directed to the legislative process.”
The onus is on the city. Beale’s licensing ordinance would put in place common-sense licensing requirements, force ride-hailing companies to serve disabled residents and give cabbies a shot at survival.
Follow Marlen Garcia on Twitter: Follow @MarlenGarcia777