Over-regulation is rearing its ugly head in Chicago once again. New regulations that would push a popular new limousine and taxi service out of the Chicago market have been proposed by Chicago’s Department of Business Affairs and Consumer Protection (BACP). Uber, a San Francisco based company provides a mobile application that allows customers to connect with luxury vehicles for hire. The company currently provides its service in 13 cities, including Chicago. Uber also recently expanded its services to taxicabs.
Since it arrived in Chicago, Uber has faced opposition from the major taxi companies, who recently filed a lawsuit against Uber claiming that the company does not comply with city and state regulation while benefitting from the existing reputations of the existing cab services, claiming a relationship with taxi and livery companies that doesn’t exist. Uber contests these claims, arguing they work with individual taxi drivers, not taxi companies.
Tech Crunch outlines the specific charges and argues that the lawsuit is likely the result of existing taxi companies protecting their turf here.
Uber’s current battle is much more serious. The BACP regulations would make providing their primary black car service impossible by disallowing companies to charge fares by measuring distance and/or time traveled, or to use an electronic device in the vehicle to measure and charge these rates.
Outlaw any electronic measurement device
Section 1.10.a “…PPV licensees may not use any device, including, but not limited to, mechanical, electronic, or digital meters/equipment to measure and calculate passenger fares based on distance and/or time traveled.”
Prohibit the use of time or distance charges
Section 1.10.c “The Department will consider a PPV that advertises or charges its passenger fares by measuring distance and/or time traveled as an unlicensed taxicab…”
Uber’s response to the proposed rules on its blog argues that the new provisions are specifically designed to stop Uber’s technology from being used in Chicago and is inconsistent with how current limo companies are regulated.
“Uber’s shorthand response: Limo companies throughout Chicago already charge by time and distance. Uber’s technology simply makes those calculations more streamlined, more transparent, and more accurate.
Collectively, these provisions are designed to prevent Uber’s technology from being used in Chicago limos. Their adoption would end Uber’s ability to offer the streamlined arrangement of limo transportation and ease of payment that you’ve come to expect and love. Consumer choice and accountability would be reduced and the incomes of the more than 1,000 Chicago drivers that depend on Uber would be significantly and negatively impacted.”
The new rules being proposed by the BACP simply don’t make sense. They benefit the established taxi services while blocking from the market a new service which is both in demand and growing. Uber has faced similar challenges in other cities where it has begun service. The city has no real rationale for ending this service. When asked for her comments by technology blog VentureBeat, Jennifer Lipford, director of communications for the City of Chicago praised the services Uber could provide.
“When we passed our new taxi ordinance, we did so knowing that smartphone apps would be a benefit for consumers in Chicago. We wrote our ordinance as such to allow for those kinds of apps. We think that apps can be a good thing for Chicago. Connecting cab drivers with customers is a good thing. Connecting customers with cab drivers is a good thing. We ask that everybody abide by the code. As far as Uber goes … we think it’s great.”
Then why is Chicago trying to drive Uber out of the city?