There’s great news for fans of ridesharing services such as UberX and Lyft in Illinois: The General Assembly won’t override Gov. Pat Quinn’s veto of a bill that would have restricted those services’ ability to operate and their drivers’ ability to earn a living.
But there’s also some not-so-great news: state legislators aren’t done trying to meddle in this market.
The primary sponsors of the vetoed bill, Rep. Mike Zalewski, D-Riverside, and Sen. Tony Munoz, D-Chicago, say they plan to “work in good faith with all parties involved” to come up with a “compromise bill.”
Zalewski suggests the new bill will be focused on public safety. But that’s what he and Munoz also claimed about their original anticompetitive ridesharing bill, which was designed not to protect the public’s safety but to enrich the taxi industry, which lobbied for it.
In any event, there’s no need for state legislation on ridesharing, even to impose safety requirements. That’s because Chicago, the only Illinois city where ridesharing companies currently operate, already has a ridesharing ordinance that addresses safety concerns. Among other things, Chicago’s ordinance already requires ridesharing companies to have insurance coverage of $1 million per occurrence for any driver carrying or available to carry passengers, requires inspections for ridesharing vehicles, and requires background checks and training for drivers.
It shouldn’t comfort the public that Zalewski may work with representatives of both the taxi and ridesharing industries this time around.
One reason is that taxi-industry lobbyists should not be involved at all, as their only interest in influencing ridesharing rules is to hamper the taxi industry’s competition. This is not a legitimate interest and therefore is not something the state should “compromise” with.
Another reason is that statewide ridesharing rules, even if they are enacted with the best of intentions, could be a barrier to future disruptive innovators in the transportation market who want to do something different from the current UberX and Lyft models. No doubt, we have only seen the beginning of what digital technology can do to offer people new and better ways to get around. Keeping regulation local and flexible will allow cities to adapt quickly to innovations, just as Chicago has been able to adapt relatively quickly and effectively to ridesharing without state interference.
If the state must impose rules, it should do so with great caution to minimize the potential harm to innovation. Instead, Zalewski says he wants to rush to draft and pass a new bill during the short time left in the current legislative session. He suggests that he might want to establish Chicago’s rules as a baseline requirement statewide. But what’s the point? Chicago is the only place in the state where ridesharing companies currently operate, so why not at least wait to see how those rules work in practice?
There’s no reason to hurry – unless the true purpose is to pass an anticompetitive bill before the inauguration of Governor-elect Bruce Rauner, who expressed support for ridesharing freedom while Quinn was still thinking about whether to veto the original bill.
Besides, legislators have genuinely urgent matters to attend to, such as Illinois’ struggling economy. They should keep their hands off ridesharing and let innovation continue.