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Article updated: 2/7/2014 7:57 AM

Taxi companies sue Chicago over ride-share law

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By Associated Press

Chicago's major taxi companies on Thursday sued the city over a proposed ordinance that Mayor Rahm Emanuel says closes a loophole that has given ride-sharing companies an unfair advantage over taxicabs.

But the taxi companies say the ordinance as written lets the ride-share companies off lightly. It would require them to pay a $25,000 annual fee, a daily $3.50-per-vehicle ground transportation tax and a $25-per-driver tax that companies pay. The cab companies argue the payment from those fees and taxes would be small compared with the $24 million paid annually by the taxi industry.

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"It is discriminating against taxi owners who have played by the rules, paid their taxes and complied with safety and licensing requirements, while the city at the same time is allowing unregulated companies (that) provide identical service to make up their own rules," said Michael Shakman, an attorney for the cab companies and independent cab operators.

Currently, the ride-sharing services such as Uber, Lyft and SideCar are not required to offer vehicles accessible to the disabled. Nor do they have to take customers anywhere they want to go. They connect customers with drivers going to, or willing to, take them to a specific location. Customers can only sign up for ride-sharing services using smartphones and credit cards.

Emanuel's ordinance would require licensed ride-sharing companies to train and administer drug tests to their drivers, conduct criminal background checks and make certain vehicles pass an annual inspection. Passengers also will be allowed to negotiate the fare.

Two aldermen have countered Emanuel's proposal with a resolution banning the ride-sharing companies. The aldermen say the companies violate city laws requiring that vehicles for hire in Chicago be licensed as a taxicab or public passenger vehicle.

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