Uber warns Dems in attempt to quash legislation
Ride-sharing giant Uber is trying to leverage Chicago’s hosting of next year’s Democratic National Convention and the city’s need for cash to quash pending legislation in Springfield that would put app-based ride-share companies on par with taxis when it comes to the liability of their drivers.
In separate letters to Democratic National Committee Chairman Jaime Harrison and Mayor-elect Brandon Johnson, the rideshare company warned that the measure could lead to higher costs for riders and a reduced number of drivers due to greater insurance requirements. That would lead to reduced city tax revenue and less availability of rides, particularly during next year’s national presidential nominating convention.
But sponsors of the legislation were undaunted by Uber’s tactics. They said the measure is aimed at ensuring greater passenger safety by allowing those injured in an Uber or Lyft vehicle to file a liability claim against the company, rather than just the driver.
At issue is a bill facing a final vote in the House that, if enacted, would on Jan. 1 end an exemption granted in 2015 to rideshare companies from the common carrier civil liability doctrine. The exemption holds transportation companies, like taxis, to a higher level by requiring them to be held liable for the conduct of their drivers.
The current legislation opposed by Uber was prompted by an incident in 2017 in which a Chicago Lyft driver allegedly sexual assaulted a female passenger multiple times at knife point. In a 2020 decision, the Illinois 1st Appellate Court held that Lyft was not liable because ride-share companies were specifically exempted from being considered common carriers.
The measure is an initiative of the Illinois Trial Lawyers Association, a powerful politically active group allied with Democrats.
Uber Technologies Inc.’s Josh Gold, senior director of policy and communications, sent a letter to the DNC’s Harrison earlier this week to advise him on the legislation, saying “we don’t want you caught off guard” and “so that you can prepare appropriately for the upcoming convention.”
Gold warned the measure “could lead to new barriers or eligibility requirements for drivers, which could lead to fewer drivers on the road. Fewer drivers may mean higher wait times and less reliability. On extremely busy days, like during the convention, there might not be enough drivers to meet rider demands.”
In a separate letter to the mayor-elect sent Wednesday, Gold said “taxes & fees on ride-share bring in around $130 million in revenue to the city of Chicago, some of which is jeopardized by this proposal.” Gold contended “less drivers and fewer trips means the city could lose tens of millions of dollars in projected revenue from ride-share taxes.”
Johnson’s inauguration as mayor is scheduled for Monday.
Uber said in the letters that the firm offered “reasonable compromises” to the legislation. But lawmakers dispute that.
State Sen. Robert Martwick, a Democrat from Chicago and the chief Senate sponsor of the measure, said by the reasoning Uber lays out in the letter, the firm was essentially saying, ‘Oh gosh, if we can’t have bad drivers then (there’ll) be less drivers, so we need to have bad drivers so that we have enough?’ ”
“I don’t think that the people who get in the back of an Uber and entrust their safety to the person behind the wheel (want) bad drivers,” Martwick said. “This is about consumer protection. It’s not about what makes the most profitable model for Uber. That’s for them to figure out how to be profitable.”
State Rep. Jennifer Gong-Gershowitz, a Glenview Democrat and the bill’s main sponsor in the House, said Uber’s argument to maintain the common carrier exemption “flies in the face of arguments about the free market.”
“Uber and Lyft have that special exception only because they were granted that in statute,” Gong-Gershowitz said. “To me, removing it puts everyone on the same playing field.”
If approved by the House, the legislation would have to be signed by Gov. J.B. Pritzker to become law. The Illinois General Assembly is scheduled to end its session next week.
Supporters said other states have considered app-based rideshares as common carriers and requiring more stringent liability coverage, including California, Maryland, Massachusetts and Georgia. Uber disputed that, saying only Maryland has such a requirement.