New Rideshare Rules to Take Effect in Chicago

Published August 12, 2016

Government restrictions on peer-to-peer transportation network companies (TNCs), such as Uber and Lyft, will soon make it more difficult for the popular “ridesharing” companies to provide services desired by Chicago, Illinois consumers seeking to get around town.

The new restrictions, approved by the Chicago City Council in June, take effect in late September and will require peer-to-peer service providers to obtain government permission, attend government-mandated training courses, and undergo exams and inspections conducted by government agencies.

The ordinance also creates committees for lawmakers to study the feasibility of additional regulation of individuals’ privately owned vehicles, including mandatory government collection of drivers’ fingerprints and medical information.

‘Tried-and-True Tactics’

Andrew Moylan, executive director and senior fellow of the R Street Institute, says city lawmakers across the nation are using such regulations to protect taxicab companies.

“In Chicago, they’re using the tried-and-true tactics that have been used in other cities to create, essentially, nuisance regulations that affect Uber and Lyft,” Moylan said. “For instance, preventing you from using them to get to the airport, or prohibiting advertisements, or requiring certain kinds of signage, which doesn’t do much to keep the public safe. What it does is to serve to single out drivers. This gives cause to police officers and cab drivers to essentially harass Uber and Lyft drivers and make it impossible to operate in some areas.”

Who Benefits?

Mark Adams, director of regulatory reform at the Illinois Policy Institute, says it’s not clear how the new ordinance improves consumers’ safety.

“It’s not entirely clear how the … ordinance would have resolved any safety issues,” Adams said. “It seems that it’s more likely that you have a special interest in passing this rule, although I can’t speak to the motivations of a specific Chicago alderman.”

‘Onerous Requirement’

Adams says the new regulations are bad for the people providing services to Chicagoans.

“For a lot of drivers, especially people who might only want to drive a few hours a week, having to put aside a whole day of your time and having to pay could be a particularly onerous requirement in terms of getting started,” Adams said. “And again, that’s going to disproportionately affect people from low-income and minority communities, where they don’t necessarily have the financial resources or they’re not able to get away for a whole day from work.”