Mayor Emanuel resists pressure to regulate ride-sharing fares
BY FRAN SPIELMAN City Hall Reporter February 26, 2014 1:22PM
During an unrelated event Wednesday, Mayor Rahm Emanuel insisted Wednesday he “hit the right balance” between ride-sharing and taxicabs, resisting mounting pressure to level the playing field by regulating ride-sharing fares. | Fran Spielman~Sun-Times
Updated: February 26, 2014 5:59PM
Mayor Rahm Emanuel insisted Wednesday that he “hit the right balance” between ride-sharing and taxicabs, resisting mounting pressure to level the playing field by regulating ride-sharing fares.
“This is a promising industry. . . . I want to make sure it’s under some regulatory oversight so the ride is secure, safe and comfortable when you get in the car and you know that,” the mayor said when asked about it at an unrelated news conference on the South Side.
“We think we hit the right balance between the taxi industry and this new ridership. The City Council will ask some questions. But we think we now have the right type of city ordinance to move the entire industry forward.”
Earlier this week, the City Council held a 4.5-hour hearing on the fierce competition between ride-sharing vehicles and taxis that brought high-powered lobbyists out of the shadows.
Representing the taxi industry was former Mayor Richard M. Daley’s Corporation Counsel Mara Georges, who argued that UberX, Lyft and SideCar allow drivers who are not licensed by the city to offer rides in personal vehicles that are neither inspected nor insured.
They’re also allowed to impose “surge pricing” whenever they determine there’s high demand and cherry-pick prime areas, without serving Chicago neighborhoods, she said.
“This is like paying someone to pick you up while you’re hitch-hiking,” she said.
When the hearing ended, Finance Committee Chairman Edward Burke argued that a “middle ground” between the rival factions must include regulating ride-sharing fares — just as the city regulates cab fares.
“If they’re not regulated in price, should taxicabs be regulated in price? Should they be permitted to charge a surge?” Burke said.
“Should taxicabs be required to have only four-year-old cars if the Ubers can have a pick-up truck, a convertible or a Model T? . . . Somebody might suggest that, just like the airlines are now charging a fee for bags, that maybe taxicab drivers ought to be able to charge for luggage. But, it’s clear this is not as simple as it appears to be at first blush.”
Emanuel wants to license ride-sharing companies and require them to obtain insurance. He wants them to train and administer drug tests to their drivers, conduct regular criminal background checks and make certain that their vehicles pass an annual, 21-point inspection. He also wants to prohibit them from picking up passengers at Chicago airports and riders who hail them from the street,
But, the mayor steered clear of regulating ride-sharing fares for fear of snuffing out a burgeoning industry on the cutting edge of technology that gives Chicagoans more transportation options.
Instead, he wants to allow drivers and passengers to negotiate the fare “based on distance travelled, time elapsed during service, a flat pre-arranged fare or suggested donation.”
Fares would have to be displayed on the company’s website, app or digital platform. Unlike cab drivers, they would be prohibited from using a combination of time elapsed and distance traveled to calculate fares.
The mayor has argued that the fact that both sides are complaining about his ordinance is evidence that he got it just right.
“I remind you that when I first got here, it had been two decades [since] anybody did anything with the taxi industry. We made the necessary reforms to give people the certainty that the ride would be clean comfortable and safe. We did what was necessary. Now, this is the next step in making sure the entire transportation system” moves forward, he said.
Cabbies have argued that Emanuel’s 2012 reforms raised the lease rates drivers pay — by as much as 31 percent for the most fuel-efficient vehicles — while they walked away virtually empty-handed.
The mayor’s only concession to drivers who have waited nine years for a fare hike was to make the $1 fuel surcharge permanent and to fold it into the cost of entering a cab, known as the “flag pull.”
Earlier this week, a cabbies group reiterated the argument it made in a federal lawsuit against the city two years ago: Chicago has imposed so many regulations on the taxicab industry, cabdrivers are essentially city employees who must be paid the state’s $8.25-an-hour minimum wage. But, they’re now working 12-hour-days, seven-days-a-week for half that amount.