The 6 worst things about Illinois’ proposed ridesharing law

Jacob Huebert

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

Jacob Huebert
March 27, 2014

The 6 worst things about Illinois’ proposed ridesharing law

Taxi-industry lobbyists have been working hard to get Chicago to hobble or ban popular ridesharing services such as UberX and Lyft, but they haven’t gotten very far. The problem: these services are just too popular. Aldermen have been overwhelmed with calls and emails from Chicagoans asking them to leave ridesharing alone. So now the taxi...

Taxi-industry lobbyists have been working hard to get Chicago to hobble or ban popular ridesharing services such as UberX and Lyft, but they haven’t gotten very far.

The problem: these services are just too popular. Aldermen have been overwhelmed with calls and emails from Chicagoans asking them to leave ridesharing alone.

So now the taxi lobby has turned to state government to seek protection from ridesharing competition. A bill before the Illinois House of Representatives, House Bill 4075, would impose restrictions on ridesharing statewide – but really would only affect Chicago, the only Illinois city where ridesharing services operate.

It’s a clever move by the industry: most state legislators’ constituents have never used UberX or Lyft, so those legislators, unlike Chicago aldermen, may not get much pushback if they vote to restrict ridesharing.

Let’s hope this strategy fails, though, because the state proposal contains several unnecessary, anticompetitive provisions that would harm consumers.

Here are six of the bill’s worst features.

1. No pickups or drop-offs at airports and convention centers

Like Mayor Rahm Emanuel’s proposed Chicago ordinance, the proposed state law would ban ridesharing vehicles from picking up or dropping off passengers at any commercial airport. It would also prohibit ridesharing vehicles from picking up or dropping off at any convention center.

Why? Because taxi companies want that business for themselves. The proposal is labeled as a “consumer protection” law, but this has nothing to do with public safety and everything to do with enriching taxi medallion owners at everyone else’s expense.

2. An arbitrary vehicle age limit

The proposed state law also would prohibit rideshare drivers from using vehicles more than four years after their date of manufacture.

This too is arbitrary and irrational. A 4-year-old car with 30,000 miles could be much safer than a 2-year-old car with 100,000 miles. Or a 5-year-old Volvo sedan could be much safer than a brand new cheap hatchback, regardless of mileage. Besides, the proposed law also requires that rideshare vehicles receive regular safety inspections, making the age requirement especially unnecessary.

The rule is also unfair because there is no state law limiting how old taxis or other vehicles-for-hire can be. There is no reason to single out ridesharing vehicles for this type of restriction.

The only apparent purpose of the vehicle-age limit is to raise the costs of entering and staying in the ridesharing business – which are quite low – to the benefit of taxi companies and the detriment of consumers and the many ordinary people who use their cars to earn a living or make extra cash.

3. Price controls

The state proposal would also prohibit ridesharing services from charging more for a ride than a taxi would be allowed to charge for the same ride under local law.

This provision targets UberX’s “surge pricing,” which charges consumers higher rates when there’s unusually high demand. (Normally, an UberX ride costs less than a taxi ride.)

The fare limit may sound consumer-friendly, but it’s not. Surge pricing is simply a way of making sure that cars will be available to the people who value them most. As the Chicago Sun-Times editorial page understands, if the law limits how much drivers can make, there will be fewer cars available, and consumers will be worse off.

4. Discrimination against electronic tipping

The limit on ridesharing fares doesn’t include tips – but only if the tips are paid directly to the driver and not through the ridesharing app.

This discrimination against electronic tipping targets Lyft, whose drivers’ pay is technically a “donation” (in other words, a gratuity). But it will also discourage tipping in general because many passengers may not have cash on hand, even though they would tip if they could do so through their app. This rule diminishes one of the major benefits of ridesharing apps, which is that you don’t need to carry cash to pay your driver.

5. Limited driver hours

The proposed law also limits drivers to working 10 hours at a time. That may sound like a long enough shift, but the state places no limit on how long drivers of taxis or other vehicles-for-hire can work. In Chicago, cab drivers are limited to, and typically work, 12-hour shifts. So the proposed law does little except take money out of rideshare drivers’ pockets for no reason – except to put more money  in taxi companies’ coffers.

6. This is not the state government’s business

These are not issues that the state government should be addressing at all. Taxis and other types of vehicles-for-hire are regulated at the local level, and ridesharing vehicles should be, too. There is no reason why Springfield politicians who have no experience with ridesharing should decide what’s best for Chicagoans.

People in any part of Illinois who care about freedom, market competition and innovation should tell their state legislators that restricting ridesharing – and protecting the taxi industry from competition – is none of the state’s business.

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