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Uber, Lyft Could Face New Obstacles From Chicago's City Council

By Gwendolyn Purdom in News on May 10, 2016 9:30PM

A yellow cab (Photo by Elena Kovalevich via the Chicagoist Featured Photos pool on Flickr)

Chicago’s ongoing battle between ride-hailing services like Uber and Lyft and taxi companies and city regulators is revving up as similar conflicts are making headlines across the country this week.

The City Council is set to vote on an ordinance that would require ride-hailing drivers to undergo background checks, vehicle inspections and other regulations later this month. But as the Sun-Times reports, an attorney representing ride-hailing drivers argued in court Monday that it’s the taxicab industry that should be deregulated instead. These new developments come on the heels of a potentially industry-rocking vote, which now requires drivers to undergo fingerprinting in Austin, Texas, and has driven Uber and Lyft out of the city entirely. Mayor Rahm Emanuel is siding with the ride-hailing companies— perhaps because brother happens to be an investor in one company—on the issue, but the Austin vote has given advocates of more regulation a highly visible victory, and many in Chicago and elsewhere are watching to see what happens next.

Chicago cab drivers filed a lawsuit in October to kick ride-hailing drivers off the road, saying companies like Uber and Lyft’s lack of driver regulation gives them an unfair advantage. Others point to incidents like one Chicago Uber driver’s December ice-scraper attack against two passengers or a February shooting spree allegedly carried out by a Kalamazoo, Michigan ride-hailing driver as proof that regulation is a public safety issue as much as an issue of competing business.

The fact that Austin voters pushed for fingerprinting even after Uber and Lyft spent more than $8 million on a campaign against the requirement shows that people generally think such measures are important, Mara Georges, a spokeswoman for the Illinois Transportation Trade Association representing taxicab companies told Chicagoist Tuesday.

“Everybody doing business in the city of Chicago has to get a business license and as part of obtaining a license these people get fingerprinted and have backgrounds checked,” Georges said. “And yet you have tens of thousands of ride-share drivers in the city of Chicago who get to transport the public in a vehicle without anybody checking on their backgrounds and it just, to me, seems like a very unsafe situation.”

Those arguing against regulations, such as Anthony Sanders, the attorney representing the ride-hailing drivers who are fighting the cab companies’ suit, say lessening restrictions on cab drivers and lifting the cap on the number of them out there will level the playing field and doesn’t have to come at the expense of public safety. In a statement Monday, Lyft said rulings like the one passed in Austin “make it harder for part-time drivers, the heart of Lyft's peer-to-peer model, to get on the road and harder for passengers to get a ride.”

Either way, cities across the country are examining their policies, Georges says, and the Austin decision shows ride-hailing companies may make good on their threats to pull out of a market if more regulation is passed, while decisions in other bigger cities like New York have suggested otherwise. But will it happen in Chicago?

“Uber and the other ride-sharing companies make a ton of money in the Chicago market. Will they leave to prove a point if finger printing is required? I don’t know,” Georges said. “But my sense is, if they do leave, some other company is going to come in and fill the void and say, ‘Hey, we’re going to operate with the proper protections in place and we’ll be successful.’ ”