City Council Passes Regulations on Rideshare Industry

By the end of August, some rideshare companies that operate in the city of Chicago will need to make sure their drivers have chauffeur licenses and are insured under a measure passed by aldermen Wednesday.

The ordinance, which passed 34-10, also gives the city the ability to cap "surge pricing" -- the cost of a fare during times of peak demand.

Tougher legislation has passed the Illinois Senate and the Illinois House but has not yet been signed by Gov. Pat Quinn. Ald. Anthony Beale (9th) tried unsuccessfully to delay Wednesday's vote until Springfield takes further action.

"It is my belief that this ordinance will hurt the hardworking men and women that are driving cabs every single day," Beale said to a round of applause from onlookers.

Drivers will be lumped into two categories. Class A drivers average 20 hours a week, must undergo background checks, undergo vehicle inspections and pay a $10,000 license fee.

Class B drivers work more than 20 hours a week, must also undergo background checks and a more thorough vehicle inspection along with a $25,000 license fee.

The new rules have Mayor Rahm Emanuel's support.

"This is the most comprehensive ordinance put forth. Other cities are dealing with this, we have moved forward. There'll be pieces that Springfield has, but this goes deeper and farther," Emanuel said.

The city's new rules go into effect in 90 days, but some aldermen believe changes will need to be made once the state weighs in.

"The state is promulgating rules right now, they should be coming down pretty quickly here, and I think we should be following those in terms of creating a transportation network system that not only covers Chicago, but the entire state," Ald. Scott Wagespack said.

Rideshare companies have been vocal about their opposition to increased regulation, but a spokesman for Lyft, Angela Heuer, expressed support for the changes.

"Today's vote in support of ridesharing in Chicago is a welcome development and driven by the public's desire for safe and reliable transportation alternatives,"  Heuer said in a statement.

Another rideshare company, Uber, had a less-conciliatory reaction to the ordinance.

"While the taxi industry spends time and money trying to intimidate lawmakers with political retribution to defend its track record of horrible customer service and taking advantage of its workforce - the rideshare industry will move forward under this framework to continue to improve Chicago's transportation system," said Jamie Crain on behalf of Uber.

While cab companies want the ride share industry regulated, they say Wednesday's ordinance doesn't go far enough.

Rideshare companies offer a smartphone app to connect riders with people offering a ride in their personal vehicle for a fee. The drivers don't have to pay for expensive city medallions like cab drivers do.

City officials estimate that only about 100 to 150 drivers work full time. Still, it'll be up to the individual companies to monitor how many hours their drivers are working.

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