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June 20 2016

Chicago Politics May Drive Uber, Lyft Out of the City

Patrice L. Onwuka

Uber and Lyft may leave Chicago because of a proposed ordinance that will be voted on this week.

Late last week, a joint City Council committee in Chicago unanimously approved the “Rideshare Reform” proposal that requires drivers to obtain chauffeur licenses. While Chicago guidelines already mandate criminal background checks for drivers, the new rules would require fingerprinted background checks, physical exams, and drug tests. Ridesharing companies would also have to ensure that some vehicles are accessible to the disabled. A vote by the full city council is expected this week.

City officials think they are being tough on ridesharing companies by wrangling them under them same over-regulation that taxicabs face:

"I applaud the Committee for sending the message that rideshare company drivers need to follow the same rules as other for-hire drivers to ensure public safety," Ald. Anthony Beale, 9th, a key sponsor of the legislation, said in a statement. "Now it's up to my colleagues to enact the ordinance to make sure our ridesharing services are safe and accountable."

The taxi cab industry in Chicago applauded the ordinance because they are losing money to new competition and see this as a way to reclaim ground.

Rahm Emmanuel is an unlikely ally to Uber and Lyft. He opposes the regulations arguing that the city wants to attract more young, well-educated people and ride-sharing companies are popular with this demographic. His administration, according to the Chicago Tribune, was negotiating with Alderman Beale on a less rigid compromise but negotiations broke down. Emmanuel may not have the political clout to stop the taxicab lobby in this case.

Uber says the regulations are unnecessary and has threatened to pull out of the city:

Uber Chicago General Manager Marco McCottry noted Uber already operates under Chicago guidelines that require criminal background checks for drivers and vehicle safety checks. He said "costly and complicated barriers for drivers" would prevent them from becoming drivers, taking away affordable rides in the city.

"We love Chicago," McCottry said in a statement. "But the ordinance that advanced today would eliminate ridesharing as we know it here."

"There is no need to harm one industry to help another," he said. "We continue to urge aldermen to reject this ordinance and instead modernize taxi's rules to make life easier for their drivers."

Lyft too is threatening to pull out of Chicago:

"It would make true ridesharing impossible," Chelsea Wilson, a Lyft spokeswoman, said in a statement following the committee vote. "Because of this, we will be forced to cease operations in Chicago if this ordinance becomes law.”

Wilson said the ordinance "forces part-time Lyft drivers into an onerous, outdated model, requiring hundreds of dollars in fees just to share a seat in their car."

When ridesharing companies decided to pull out of Austin, TX, it sent a clear message that too much regulation would not be tolerated. Drivers of ridesharing companies are not for-hire taxis or chauffeurs. They are regular people using an app to give others rides in exchange for money. Chicago missed that message apparently and would rather pick winners and losers than allow riders to choose what’s safest, cheapest, and best for them.

The taxicab industry is strong in Chicago, but unfortunately instead of pushing to see new competition strangled by the regulations they have, they could have pushed to see their own regulations scaled back and then competed fairly. However, it’s lazier to pay government relations staff to lobby politicians than to innovate. Innovation will not stop and eventually, new regulations won’t be enough.

 

 

 

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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