August 20, 2014
Competition between ride-sharing companies and taxicabs is the legislative equivalent of a heavyweight title fight.
That much was obvious Monday by the clout-heavy lobbyists who filled the City Council chambers for a 4 1/2 hour hearing on the issue that brought Chicago no closer to resolution of a dispute that has triggered a federal lawsuit.
In one corner representing the taxi industry was former Mayor Richard M. Daley’s Corporation Counsel Mara Georges. She was joined by lobbyists Mike Alvarez, Mike Noonan, and Amy Kurson, partner of former Hispanic Democratic Organization (HDO) chieftain Victor Reyes.
In the other corner was the ride-sharing contingent. UberX was represented by attorney Michael Kasper, who helped Mayor Rahm Emanuel survive a residency challenge that nearly knocked him off the ballot. Lyft was represented by John Dunn, who succeeded Reyes and John Doerrer as Daley’s director of intergovernmental affairs and by Tim Dart, brother of Cook County Sheriff Tom Dart.
What brought them all out of the shadows was a resolution championed by a pair of powerful aldermen demanding that the city shut down ride-sharing companies now siphoning business from taxicabs and driving down the value of taxicab medallions.
Finance Committee Chairman Edward Burke (14th) said he wrote a letter to Corporation Counsel Stephen Patton two years ago demanding to know what Patton intended to do to enforce a 148-year-old city ordinance that makes it unlawful to “operate a motor vehicle for the transportation for hire” in Chicago unless it is licensed by the city as a taxicab or public passenger vehicle. Burke claims he never got a response.
Georges noted that ride-sharing companies like 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.
“This is a regular individual with a regular license whose background has not been checked driving his or her personal vehicle with no insurance. This is like paying someone to pick you up while you’re hitch-hiking. And we’ve all been told not to hitch-hike,” Georges said.
“They require their users to not only waive liability but to indemnify the company. So, not only are you driving around with no insurance, but in the event of a loss, it is the passenger that’s going to be stuck holding the bill.”
Unlike cab companies that are required to service Chicago neighborhoods, Georges argued that Uber and Lyft cherry-pick the Loop, the Near North Side, Hyde Park and Midway Airport.
They also impose “surge pricing” whenever they determine there’s high-demand. That could be during a snowstorm or simply outside the United Center after a Bulls game.
“That’s a euphemism for charging whatever they want,” Georges said. “When drivers hear that surge-pricing is in effect in an area, they flock to that area because they know they’re gonna make…up to 13 times the normal rate.”
Although the ride-sharing companies showed up in force, they chose not to testify, Burke said.
Instead, they staged a news conference prior to the hearing that saw Ald. “Proco” Joe Moreno (1st), riders and drivers portray the controversy as a battle between the “Flintstones” and the Jetsons.”
That’s an obvious reference to the fact that UberX, Lyft and SideCar passengers order rides and track arrival times on their smartphones and don’t need to carry cash or because they’re automatically charged on their credit cards.
When the hearing was over, 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 Uber’s 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 street hails.
But the mayor steered clear of regulating ride-sharing fares. 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. Drivers would be prohibited from using a combination of time elapsed and distance traveled.