rideshare regulations

State regulations advance for rideshare companies. (Phil Velasquez Chicago Tribune / April 9, 2014)

Saying it will curtail or kill the industry, rideshare companies on Wednesday opposed state legislators' attempt to regulate them with a two-tier system based on driver hours.

A state House committee held a hearing Wednesday and passed an amendment to the state bill sponsored by Rep. Mike Zalewski (D-Riverside) that he believes is a compromise.

"We had painstaking, substantive, detailed negotiations over the course of the last 72 to 96 hours, maybe even longer," he said at the hearing in Springfield. "We've incorporated every single thing that has been asked of us in this bill by at least one ridesharing company."

His earlier proposal would have prevented drivers from operating more than 10 hours in a 24-hour period and prohibited companies from charging any fare that is more than the highest per-mile rate charged by cabs. Both mandates were excluded from the latest amendment.

Instead, rideshare drivers working more than 18 hours per week would be required to get a chauffeur's license from the local municipality and distinctive registration plates for their vehicles, which must pass the same inspections required locally of other commercial vehicles transporting passengers.

Drivers who work 18 hours or fewer per week would face less stringent standards. They would be required to pass a background check, and the companies would have to certify that the vehicles passed safety inspections.

Rideshare companies oppose the state proposal.

"Make no bones about it. This amendment, despite the efforts of Rep. Zalewski, will drastically curtail, if not end, ridesharing in Chicago," said John Nicolay, Lyft’s lobbyist.

For example, limiting the number of driver hours would make it difficult to recruit drivers, he said.

"It doesn't fit the model. The model we have that's been very successful and popular is flexible. This bill does not give any flexibility whatsoever if you go one minute over the 18 hours," Nicolay said.

The amendment would also require rideshare companies to get an annual state commercial ridesharing dispatcher license and obtain commercial liability insurance with primary coverage for the company, driver and vehicle. The amendment would require rideshare drivers to follow local government rules when it comes to providing service to underserved areas and having wheelchair accessible vehicles.

Mara Georges, who represents the Illinois Trade Transportation Association that includes medallion owners, said the amendment "allows ridesharing to prosper in the state of Illinois."

Uber, on the other hand, disagrees and is disappointed with the state legislation.

"After failing to bend the City of Chicago to their will, the taxi companies have sought support in Springfield to protect their industry from competition," Andrew Macdonald, Uber’s Midwest regional general manager, said in a statement. "The transportation needs of Chicago residents are being pre-empted by special interests, behind closed doors, and more than two hours away from the neighborhoods that desperately need cheaper, higher quality and more reliable transportation options."

"Let's work together to develop reasonable regulations rather than impose industry chilling, and possibly industry-killing, knee-jerk requirements," he said.

The measure now will head to the full House.

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