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Illinois House OKs Ride-Sharing Regulations

A Lyft car sits at a stoplight. As ridesharing services like Lyft, Uber and SideCar become more popular, the taxi industry is pushing for tougher regulation of their new competition. (Photo by Justin Sullivan/Getty Images)

A Lyft car sits at a stoplight. As ridesharing services like Lyft, Uber and SideCar become more popular, the taxi industry is pushing for tougher regulation of their new competition. (Photo by Justin Sullivan/Getty Images)

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SPRINGFIELD, Ill. (AP) – Illinois lawmakers took steps Thursday toward creating rules for unregulated ridesharing companies, which have gained popularity in Chicago the past few years.

The companies — such as Uber, Lyft, and Sidecar — use smartphone apps to connect passengers with willing drivers. They compete with taxi cab companies but aren’t required to follow any state transportation regulations.

Taxi cab companies, which have lost profits since the arrival of ridesharing in Illinois, have pushed for these companies to be regulated, and lawmakers have voiced concern over driver and passenger safety in the industry. Ridesharing companies and some Republicans say the proposal would all but kill an emerging industry in the state.

“The bill, as is, will chill a burgeoning industry on the cutting edge of technology that gives Chicagoans high-quality, convenient and safe transportation options,” said Andrew Macdonald, general manager for Uber Chicago. The company says they’ve created more than 1,000 new jobs and had a $46 million economic impact in Chicago.

“This is a new emerging industry that we have to make sure the whole state has control over.” said State Rep. Michael Zalewski, a Riverside Democrat. He says the proposal is the result of painstaking compromise between lawmakers, taxi companies, and the ridesharing industry.

The Illinois House voted 80-26 on a proposal that would require all ridesharing companies to conduct driver background checks, safety training and have commercial liability insurance. Ridesharing drivers would be restricted from using taxi loading zones. Those drivers logging more than 18 hours would need registration plates, a chauffer’s license, and vehicle safety inspections.

Ridesharing companies would still be allowed to use price surging, or raising prices in times of high demand.

Still, the legislation was welcomed by taxi companies. Angela Benander, spokeswoman for the Illinois Transportation Trade Association, called the proposal a compromise and said it will “level the playing field.” The group sued the city of Chicago in February for allowing the ridesharing companies to operate without equal regulations.

Republicans who opposed the proposal said the new industry should be left alone because it’s producing good results and creating jobs. They said the proposal is another case of Illinois overregulating businesses and said it would stifle innovation.

“When in doubt, on something new and innovative, we ought not to choke it,” said state Rep. Ron Sandack, a Republican from Downers Grove.

The measure moves to the Senate for further consideration.

(TM and © Copyright 2014 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)