Illinois Passes New Laws for Ride-sharing Companies
By: James Bizzieri
Ride-sharing companies such as Lyft and
Uber allow drivers to operate as quasi-taxis in order to use their personal
cars to take members to and from local destinations. Proponents of ride-sharing
believe that it is a new frontier in public transportation. Opponents believe
that this sub-industry is serving all of the functions of taxi companies,
receiving all of the benefits of a taxi business, while not operating under the
strict laws that govern taxi organizations. While big ride sharing companies
have preemptively prepared for accident liability by erring on the side of
caution and purchasing “excessive coverage,”
many still believe that stricter laws must be imposed to firmly mandate
liability insurance and other protections. The new statute may ultimately
change the landscape for residents throughout Chicago land, including Oak Lawn, Orland
Park, Burbank, and nearby communities who are injured in ride-sharing
accidents.
The Specifics of the Law
Earlier this month the Illinois legislature
submitted a bill to the state Senate
that would require ride-share companies to function more like taxi cab
companies. In complete contrast, last week a Chicago City Ordinance was passed
that creates a separate licensing system
distinct from the taxi medallion licensing system, which will govern ride-share
companies. At the heart of this conflict is the fact that ride-sharing
companies are currently not regulated, while other types of businesses that are
part of the infrastructure of a city’s public transportation system are heavily
regulated and subject to lots of red tape in order to legally operate in
Illinois. Proponents of these regulations simply see them as a means for making
this industry follow the rules, just like any other public transportation
company, while opponents assert that regulation will stifle the growth of the
ride-share industry and remove significant benefits and financial incentives
currently enjoyed by cash-strapped drivers.
The Illinois State Senate Bill and the
Chicago City Ordinance
The ride-sharing law submitted to the
Illinois State Senate contains rules aimed at requiring ride-sharing companies
to operate like traditional public transportation entities such as cabs and
limo services. The law would require ride-share drivers to purchase commercial
liability insurance, and to also have to pass mandatory background checks, in
addition to other regulatory controls. Owners and the representatives of
ride-sharing companies are the biggest opponents of this law and have voiced
concerns that these regulations would stifle this budding industry while also
decreasing the amount of jobs created by the companies.
The Chicago City Council has moved forward with
alternative legislation that many view as undermining the Senate Bill that
still must be approved by Governor Quinn. Currently taxi companies are required
to pay a licensing fee of $360,000 in order to receive a taxi medallion
license, which gives them legal permission to operate in the
city. However, the new Chicago ordinance
creates an alternative licensing system whereby ride-sharing companies are not
required to receive the same licenses and designation as those required for
taxi companies. This ordinance does not provide the legislature with nearly as
much oversight over ride-sharing companies as the Senate proposal. The city
ordinance creates a new and distinct type of double-tiered ride-sharing
license. Under the ordinance, companies with drivers that average less than 20
hours each week will only have to pay $10,000 for a license to legally operate,
while those with an average of more than 20 hours each week will be subject to
a $25,000 fee and inspections by the city.
The new licensing system approved by the
Chicago City council does not address many of the legal liability issues with
ride-sharing companies. While the proposed Illinois state bill requires
liability insurance coverage in order to mitigate potential accidents, the new
license ordinance does not provide as many protections.
Do you have auto accident-related legal issues or questions? Contact an auto accident attorney here at the Bizzieri Law Offices in Chicago, IL for any legal questions that you have.
