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Taxi industry, ride-sharing services lock horns at state Capitol

Illinois Sen. MartSandoval D-Cicero speaks reporters during news conference Illinois state Capitol Tuesday March 25 2014 Springfield Ill. A fight

Illinois Sen. Martin Sandoval, D-Cicero, speaks to reporters during a news conference at the Illinois state Capitol, Tuesday, March 25, 2014, in Springfield, Ill. A fight between taxi companies, Chicago city officials, and rideshare companies including Uber, Lyft, and Sidecar, that’s been brewing in recent years is about to welcome state lawmakers who say the new, unregulated industry needs to play by some of the same rules as any other transportation business. (AP Photo/Seth Perlman)

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Updated: April 27, 2014 6:38AM

SRINGFIELD — A bipartisan handful of legislators announced Tuesday what they called an “urgent” push to regulate app-based ride-sharing services such as Uber, Lyft and SideCar statewide in a move those firms said demonstrated “blatant disregard” for consumers.

The push by lawmakers to heighten state oversight of those companies opens a new front in the battle between the new startups and the powerful taxi industry, which already are feuding in federal court and trying to hammer out new regulations in Chicago. The fight also is providing reliable spring paychecks for some of Springfield’s biggest lobbying powerhouses.

Rep. Michael Zalewski, D-Riverside, chief sponsor of the legislation in Springfield, said putting in safety mandates on the new companies, which can be summoned with a few keystrokes on a smartphone, is an “urgent matter.”

“It’s our opinion, and the opinion of those who focus on consumer protection, that in fact regulatory vacuums are not healthy for Illinois citizens,” Zalewski said. “We don’t condone unlicensed, unregulated activity, and in fact it’s our duty to protect the public safety of our constituents.”

Zalewski’s legislation, House Bill 4075, would require ride-sharing drivers to have a chauffeur license; have their cars marked; and have commercial insurance for riders.

The bill, which is scheduled to be heard Tuesday in House committee, would also address what advocates called “price-gouging” that occurs during peak times, limit driver on-call hours to ensure drivers have enough sleep and require compliance with local service standards, including service to low-income communities.

Sen. Martin Sandoval, D-Chicago, another proponent of the legislative crackdown on app-based ride-sharing, made the case on that latter point: He said the biggest reason he has never used ride-share services is because they won’t come to his Latino neighborhood on the Southwest Side.

“These for-profit, illegal ride-sharing companies cherry-pick their customers,” Sandoval said. “They only go to affluent neighborhoods in the city of Chicago, on the North Side of Chicago and the suburbs. They stay away from Latino, African-American and poor communities. I wonder why.”

One of the firms being targeted said in a statement Tuesday that Zalewski’s legislation represents a “backdoor attempt” by state legislators to undermine the proposed city ordinance and effectively drive the taxi industry’s new competition out of business.

“After weeks of working diligently with Mayor Emanuel, we have made significant progress on a proposed city ordinance that prioritizes public safety while protecting innovation,” Lyft said in a prepared statement. “HB 4075 is a backdoor attempt by state legislators to undermine all the work that’s already been done to reach a solution on this issue, and ultimately kill peer-to-peer transportation.

“HB 4075 would effectively shut down new transportation options in Illinois and eliminate consumer choice for residents who depend on safe and affordable transportation alternatives like Lyft,” the company said.

In its statement, Uber blasted the Springfield move to impose statewide regulations on it and its ride-sharing competitors.

“This legislation shows a blatant disregard for the riders and drivers who rely on ride-sharing in Chicago — and the policy efforts already underway with the mayor and aldermen in the city,” Uber spokesman Andrew Macdonald said. Sen. “Sandoval and the taxi industry’s time would be better spent focused on bills that would improve taxi service in Illinois cities, not limit options for consumers and drivers.”

The opening of a new legislative front in the battle between the ride-sharing firms and the taxicab industry comes as both sides are battling in court.

Last month, Yellow Cab and several other big taxi companies sued the city in a bid to block a proposed ordinance by Mayor Rahm Emanuel to regulate ride-sharing companies and offer cheaper licensing opportunities for the firms in contrast to what licensed cab companies pay Chicago.

And last Wedneday, a Chicago woman filed a lawsuit in Cook County Circuit Court against Uber, alleging one of its drivers fondled her and prevented her from leaving the car several times. Uber deactivated the driver’s account. The woman’s suit seeks a minimum of $50,000 in damages.

The players in the high-stakes legislative battle have employed an array of top-shelf lobbyists to wage war at the Capitol.

Uber has Fletcher, O’Brien, Kasper & Nottage, which is the lobbying firm in which Michael J. Kasper, formerly House Speaker Michael Madigan’s top legal counsel and still the general counsel to the Madigan-led Democratic Party of Illinois. Kasper helped Emanuel survive a residency challenge and remain on the 2011 mayoral ballot.

Lyft is represented by lobbyist John Nicolay, a partner in the Nicolay & Dart law firm and a protégé of former Illinois Gov. James Thompson.

On the opposing side, representing Yellow Group LLC, owner of Yellow Cabs, is The Roosevelt Group. A principle in the company is Victor Reyes, a one-time top aide to former Mayor Richard M. Daley and operator of the Daley-allied Hispanic Democratic Organization, which helped elect Sandoval to the state Senate.

Yellow Group also has Daley & Georges as one of its lobbyists. The lobbying firm, once one of the most clout-heavy law firms in the city and still a formidable presence, has Michael Daley as one of its principles. He is a brother to former Mayor Daley and to Cook County Commissioner John Daley.

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