Mayor Rahm Emanuel will move to fill a “regulatory vacuum” that has given ride-sharing companies no safeguards to and instead has put an unfair advantage over Chicago taxis. Chicago Sun-Times reports that the 20-page ordinance, expected to be introduced at a City Council meeting, would license ride-sharing companies as “transportation network providers” and require them to pay an annual, $25,000 fee, plus $25 per driver. So then, UberX, Lyft, SideCar and other ride-sharing companies that allow drivers to offer rides in their personal vehicles would be required to pay the city’s $3.50 a day per vehicle ground transportation tax, imposed on cabs.

Regulations on Ride-Sharing

To guarantee passenger safety, the ordinance would require licensed ride-sharing companies to train and administer drug tests to their drivers, conduct regular criminal background checks and make certain that their ride-sharing vehicles pass an annual, 21-point inspection. Ride-sharing companies also would be required to secure “general liability” and “commercial auto liability” insurance with limits no less than $1 million per occurrence. With all of its new regulation, the ordinance preserves the distinction between ride-sharing vehicles and cabs.

David Spielfogel, a senior adviser to the mayor, said Emanuel’s goal is to eliminate the “regulatory vacuum” for ride-sharing companies in a way that protects consumers. “We’re imposing license fees. We’re forcing them to pay the ground transportation tax. And we’re setting clear rules like, they cannot pick up at the airport. They cannot hail riders. We think we struck a very good balance in ensuring that innovation is allowed to flourish in this city, but also that consumers are kept safe.”

The Fees and Taxes

Edward Feldman, another attorney representing cab companies, argued that the mayor’s ordinance does not go nearly far enough in leveling a playing field now tilted in favor of ride- sharing companies. “The fees and taxes this ordinance would raise are tiny.The taxi industry pays over $24 million-per-year to the city. That will shrink dramatically if this ordinance passes,” Feldman wrote in an email to the Chicago Sun-Times. “People operating in the same industry providing the same service should operate by the same rules. It is unfair to require taxi drivers to invest more and operate under strict rules, while letting other drivers invest less and operate under much lighter restrictions.” Ride Sharing has changed the industry — but how far will people go to save a couple dollars? Is this fair to people who have invested so much into the transportation industry?