Is Chicago retreating from threats against Uber and ridesharing services?

Jacob Huebert

Senior Attorney at Liberty Justice Center, author of Libertarianism Today.

Jacob Huebert
February 26, 2014

Is Chicago retreating from threats against Uber and ridesharing services?

At the beginning of this month, things weren’t looking good for “transportation network providers” such as Uber and Lyft in Chicago. On Feb. 5, Mayor Rahm Emanuel unveiled a proposed ordinance that would force these services to severely change the way they do business, if not leave the city entirely. That same day, aldermen Ed...

At the beginning of this month, things weren’t looking good for “transportation network providers” such as Uber and Lyft in Chicago.

On Feb. 5, Mayor Rahm Emanuel unveiled a proposed ordinance that would force these services to severely change the way they do business, if not leave the city entirely.

That same day, aldermen Ed Burke and Anthony Beale introduced a resolution urging a crackdown on ridesharing services that use vehicles other than licensed taxis and livery vehicles, such as UberX, Lyft and Sidecar.

Now, however, things may be looking up – at least for the moment.

When Emanuel announced his plan, we pointed out its many serious problems and urged people to contact city officials.

You responded. Aldermen have reported receiving thousands of emails asking them to keep these services legal in Chicago.

The City Council’s Committee on License and Consumer Protection was expected to consider Emanuel’s proposal at its Feb. 26 meeting, but now, following the public outcry, they’re holding off. Now the committee’s chair, Alderman Emma Mitts, says that the ordinance is a “work in progress,” and a spokesman for Emanuel says that “[r]evisions are being considered.”

Good. Let’s hope those revisions include deleting the many provisions that would help enrich the taxi industry but do nothing to protect the public’s health and safety.

Meanwhile, on Monday, the City Council’s Joint Committee on Finance and Transportation and the Public Way held a hearing on the Burke and Beale resolution.

Taxi industry lobbyists testified in support of the resolution and did their best to smear ridesharing services, but several aldermen weren’t buying it and pushed back.

Alderman Brendan Reilly, for one, seemed to understand the issue: “Competition drives innovation,” he said, adding that having many players in the transportation market “absolutely benefits the end user. That’s the American experience. That’s capitalism.” He said the city should “tread lightly” in regulating transportation network providers and, if anything, it should revamp its rules for all types of transportation to create a “fair but hypercompetitive marketplace.”

Alderman George Cardenas expressed similar views: “Clearly we need to deregulate,” he said. “Take all the regulations the taxi industry currently has and turn them on their side.”

Alderman Proco Joe Moreno also challenged the taxi lobbyists and reportedly rallied UberX drivers beforehand, saying that the difference between traditional taxi services and the new transportation networks is like “the difference between the Flintstones and the Jetsons, and we’re here to support the Jetsons.”

The old crony taxi medallion system still has its fervent defenders on the City Council, of course – with Burke, who has been in office since 1967, chief among them. But even the taxi companies seem to understand that times are changing – and they’ve been forced to cede ground in response to the overwhelming popular support for Uber and similar companies.

The taxi industry originally wanted to outlaw all transportation networks, including Uber’s black-car service, and the city appeared ready to oblige. In 2012, former Department of Business Affairs and Consumer Protection Commissioner Rosemary Krimbel introduced regulationswhich we opposed – that would have done just that.

At Monday’s hearing, however, taxi industry lobbyist Mara Georges, formerly the city’s corporation counsel under Mayor Richard M. Daley, said the taxi industry no longer objected to Uber’s black-car and taxi services. Now, she claimed, they only object to the “unlicensed” drivers in “ridesharing” services such as UberX, Lyft and Sidecar.

That sounds like progress.

After nearly five hours of testimony, the committee didn’t even vote on the resolution – perhaps to spare its sponsors embarrassment.

But this good news shouldn’t make us complacent. The taxi industry – which includes not only cab companies but also people who buy taxi medallions as investments and banks that specialize in financing medallions – has a lot at stake and won’t just surrender. In fact, one of its lobbyists, Matthew Daus – who is the former taxi commissioner for New York City, which has some of the nation’s most oppressive, protectionist taxi regulations – said he would be meeting privately with Chicago officials before leaving town.

They’re not going to rest, so we can’t either.

Those of us who favor freedom, competition and innovation need to keep the heat on council members, most of whom may not care much about those things but definitely do care about keeping their constituents happy.

Click here for information on contacting your alderman and other city lawmakers to tell them you support a free market for transportation networks in Chicago.

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