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Mon August 25, 2014
How Politics Steered The Uber Bill
Gone are the days of standing outside, in the rain, hoping a taxi will pass by. Ridesharing services allow anyone with a smart-phone to download an app and get setup with a ride ... at least in the Chicago where it's available. It hasn't taken off yet elsewhere in Illinois. Even so, the General Assembly this spring passed a controversial measure that would regulate ridesharing statewide. Monday morning, Governor Pat Quinn vetoed it. Amanda Vinicky has more on why.
It was early on a Monday morning, and I had to get to downtown Chicago's Union Station, to catch an Amtrak train back to Springfield. I couldn't trouble a friend at 6 a.m. to drop me off.
So I picked up my phone, and used my Uber app to request a driver. Its special GPS honed in on where I was, and where I needed to go.
Presto! Within minutes, a man in a nice, new Honda Accord -- leather seats and all -- arrived at the door to pick me up.
He wasn't a full time cab-driver; just a dad who said he's trying to make some extra cash to pay for his son's hockey team.
He couldn't have made much (though Uber can connect passengers with professional drivers -- limos even) -- with this form of rideshare, anyone with a car who's looking to make an extra buck can pretty much become an on-call, temporary taxi.
Uber is the largest company, but there are others: Sidecar, and (ever seen a car with a big, pink mustache?) Lyft.
Needless to say, it's got the taxi industry driving in metaphoric circles.
Chris Taylor, the General Manager of Uber-Chicago, says that's what's behind the measure approved by Illinois' General Assembly this spring.
"This bill is about protecting a monopoly industry from competition, and putting up barriers to make it harder for other people to compete," Taylor says. "The owners of the taxi industry haven't had to really compete with anybody for decades."
Medallions, the bling-sounding word for the license to operate an industry, can sell for as much as a home; the City of Chicago website lists medallions regularly going for more than $300,000.
Who could blame medallion owners and taxi drivers for wanting to protect that sort of investment?
"I absolutely refuse that," says Mara Georges,who represents the taxi industry -- which calls itself the Illinois Transportation Trade Association. This bill is absolutely about public safety and consumer protection. It would have imposed very, minimal common sense safety regulations across the state."
The taxi industry is heavily regulated; Georges says it's common sense that anyone getting paid to drive people around should be.
While the dad I had hired to take me to Union Station got me there safe and sound, I once had a different UberX driver who briefly went the wrong way, down a one way.
It could happen in a cab, sure; but Georges says there's a system to deal with that, and protections.
The measure legislators approved would require rideshare drivers who work more than 18 hours a week to get a locally-issued chauffeur's license, which includes a background check. And it would force rideshare companies to provide commercial insurance. While Uber says it already has that, it's a question of just when it's in effect -- only when a passenger is in the backseat? Or the whole time the app is on?
The two sides hashed it out in one of the most lobbied pieces of legislation in the past year. The powerful insurance industry and trial lawyers teamed up with the taxis, while Uber and its kin brought on board Gov. Quinn's former chief of staff, and a firm with tight connections to the House Speaker.
Over rideshare companies' protests, the taxi industry won: a bill setting statewide regulations passed, with opposition, yes, but not enough to call the margins slim. Georges says the industry expected Gov. Quinn would sign it into law.
"And up until less than the past week we've been every indication that he did support," she said Monday. Then, she says, something changed.
"That's really when the political pressure was put on," Georges says. "So I think there are a lot of people who believe politics have entered this came very much, in that someone like Pat Quinn would normally be on the side of the consumer. And would normally be on the side of the consumer and would normally be interested in the protections that this bill provides."
Bruce Rauner, the Republican nominee who is trying to wrest the governor's office from Quinn, had put public pressure on him to veto it.
Not to mention, Uber has been airing ads like this one: "Hey! Are you Ubering right now? If not you'd better grab an UberX quick, because Illinois may not have them for long. The taxi companies are waging a campaign to kick UberX out of Illinois. But Gov. Quinn has the power to save your favorite ride."
Rep. Mike Zalewski, the Riverside Democrat who sponsored the measure, says it's one one of the rare instances in which state government has had an easily translated affect on young, upwardly mobile people.
"It's hard to explain sometimes what we do in Springfield to people. Except that, oh. You're going to quote-unquote 'take away my Uber.' I have to stop that.'"
Zalewski says the typical Uber user is a key demographic for politicians like Rauner and Quinn, as they fight for the Cook County vote.
However, Georges says Quinn made the wrong move "because when you think about the taxi industry, the taxi industry supports about 40,000 jobs in the state of Illinois. And so, you know, he doesn't seem to mind losing that support, the support of the taxi industry. And instead he seems to be going after the same base that Bruce Rauner has, in siding on the Valley of the Silicon Valley billionaires."
In his veto message, Quinn says that local governments should make rules on ridesharing, rather than the state prematurely setting rigid standards.
Though Uber is only in Chicago and some suburbs now, its executives have made mention of expanding downstate. The company also say Quinn's veto could lead to Uber creating more jobs in Illinois. That could have steered the Quinn's decision. Plus, his fellow Democrat, Chicago Mayor Rahm Emanual -- who issued a statement calling Quinn's veto "a thoughtful approach" that will "allow transportation options to flourish" -- has a brother who's a key investor in the growing company.
Neither the taxi industry or Rep. Zalewski see Quinn's rejection of the measure as a dead end. Lawmakers could try to override the Governor, after the election.
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