October 31, 2014
Government efforts to regulate ride-sharing services like Uber and Lyft don’t need two people at the steering wheel.
But that’s what we’re getting now that some state legislators have decided to push City Hall aside and draw up rules for the new services. The Illinois House should nix this idea before it goes any further, especially because the state bill would have the unwanted effect of putting the brakes on ride-sharing in Chicago.
Ride-sharing companies have come to Chicago to compete with traditional taxis. Riders like using their smart phones to call for a ride from the nearest driver. They like being able to see the car’s location on their screen as it drives toward them. They like being able to see right on their phone how much the ride will cost.
But like any new idea, ride-sharing also raises a lot of questions — issues that long ago were worked out for taxis. Who pays if a rider is injured? How much in taxes should the services pay? Where should ride-sharing vehicles be permitted to go, and where should they be required to go?
To answer those questions and close a “regulatory vacuum,” the Emanuel administration has proposed regulations that would require ride-share services to have insurance, to pay a $25,000-a-year fee, and to pay a $3.50-per-day-per-vehicle ground transportation tax. The ordinance also would require ride-share companies to serve low-income neighborhoods and people with disabilities.
Additionally, ride-sharing companies could communicate with potential riders only via smart phones, as they do now, and would be barred from owning or leasing their own cabs. Drivers would undergo regular criminal background checks and drug tests, and their vehicles would be inspected every year. Ride-share companies would have to carry general liability insurance for each driver of at least $1 million per accident.
The city’s approach is designed to create space for ride-sharing while ensuring the survival of taxis, which are an important part of any large city’s infrastructure. But now the General Assembly is getting into the act with its own legislation. Why? If Chicago is dealing with the issue effectively, why is the state trying to fix the same problem? Ride-sharing is not a statewide issue. Uber and Lyft are not are cruising small Downstate communities that won’t be covered by Chicago’s ordinance.
The state bill would require ride-sharing drivers to have a chauffeur’s license, have their cars marked and carry commercial insurance for riders. The bill advanced Wednesday out of the House Business & Occupational Licenses Committee by a 9-2 vote. The ride-sharing companies said the bill is an effort on behalf of cab companies to do an end-run around the city’s ordinance.
State Rep. Michael J. Zalewski, D-Riverside, who proposed the legislation, said lawmakers have agreed to amend the bill and are open to negotiations with ride-sharing companies. Fine, but those negotiations should not result in a bill that serves as a roadblock for ride-sharing.
It’s going to take a while to sort out what the new rules will be. There’s also a federal lawsuit that would force the city to impose the same rules on ride-sharing that now apply to traditional cab companies.
But it seems the logical place to make decisions about ride-sharing rules is at the level of city government. It’s the city that has to deal with the effects of ride-sharing and do the careful balancing act of nurturing new services while being fair to taxi owners who have paid hundreds of thousands of dollars for medallions the city requires for each cab.
If any new rules cause an unexpected problem, the city should be empowered to tweak them on its own without having to run to Springfield for an emergency fix.