Will the State Put a Crimp on Uber?

By Lesley Nickus | Illinois News Network, via Watchdog.org

This week’s legislative veto session includes two bills that would set restrictions on ridesharing companies, including Uber.

In August, Gov. Pat Quinn vetoed HB 4075 and HB 5331 — which would have imposed statewide regulations on rideshare providers — saying these types of rules should be decided locally.

“The principal of home rule is an important one,” Quinn said in a statement released in August. “I am vetoing this legislation because it would have mandated a one-size-fits-all approach to a service best regulated at the local level.”

But one of the bill’s sponsors, State Rep. Mike Zalewski, D-Riverside, who on Monday filed a motion to override the veto, said he believes leaving the rule-making up to municipalities could be confusing.

“When you have a hodgepodge of different rules for different municipalities, you create confusion, misunderstanding of the law,” he told the Illinois News Network this week. “(We) need uniform, comprehensive statutes that, again, isn’t burdensome, but protects consumers and protects passengers.”

Opponents of the bills insist they rules are burdensome and serve to protect the taxi industry from competition while proponents cite public safety as a primary concern.

“This bill puts a lot of red tape and restrictions on (ridesharing) unnecessarily and it’s really about protecting taxi owners from competition,” said Chris Taylor, general manager of Uber Illinois. “Uber supports common sense legislation and measures that are reasonable. This bill is really more about restricting competition than anything else.”

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Two components, in particular, keep both sides of this issue at odds: insurance requirements and driver licensing.

Rep. Zalweski said the basic components of the legislation require rideshare companies to hold commercial insurance policies, provide universal background checks and require drivers who decide to drive full time hold industry-specific licenses.

“We’re not trying to stifle innovation but we want to make sure we’re protective of our constituents,” he said.

Taylor, on the other hand, insists Uber and other rideshare companies have taken appropriate steps to ensure their drivers are adequately insured and trained. Uber carries $1 million of primary commercial liability insurance that kicks in any time a driver is on the job. Drivers undergo extensive background checks and training

Taylor also said a move to apply special licensing requirements to rideshare drivers would remove the flexibility drivers often cite as a reason the job is appealing. He also said it would discourage drivers from taking on more hours which would, in turn, reduce the drivers on the road and push prices up for consumers.

“If they lost a shift at the factory or knew it was St. Patrick’s Day and there was a ton of demand, they love that flexibility and the ability to earn a good income,” Taylor said. “(Licensing requirements would mean) fewer cars on the road because not everyone is going to be willing to go through that process.”

Rep. Zalewski insist the bill would not provide an undue burden on rideshare companies.

“Ultimately, my feeling about the bill is it was a good piece of legislation that’s comprehensive without being burdensome that will ensure the safety of passengers who choose to use an innovative brand of transportation,” he said.

In September, Uber announced it would expand its Chicago regional headquarters. The plan is set to create more than 400 new jobs by the end of 2016. What is ultimately decided in the upcoming veto session, however, could change all that.

Reporter Greg Bishop contributed to this report