Elgin council to vote later this month on ride-share regulations

After acknowledging that ride-share companies and taxi companies are inherently different despite providing similar services, the city of Elgin is backing off wanting to heavily regulate the ride-share industry.

City council members voted 7-2 at the meeting of the whole committee Wednesday on proposed regulations largely based on state statute and ordinances in Springfield and Chicago.

Under the new ordinance - which will be up for approval by the full council May 27 - ride-share drivers would have to carry automobile liability insurance of at least $50,000 for death and personal injury per person; ride-share companies, such as Uber, Lyft and others, would carry $1 million liability insurance from when drivers log into the companies' networks until the ride or transaction is completed. Also, ride-share companies would have to conduct criminal background checks on their drivers.

Those provisions mirror the Transportation Network Providers Act, which takes effect June 1.

The first version of the ordinance proposed by city staff members and discussed by the council in January would have required ride-share drivers to carry commercial insurance just like taxi drivers, which the ride-share industry decried as excessive and redundant.

The first proposal mainly was based on conversations the city had with local taxi company owner Jaime Hjelm - but not with representatives of the ride-share industry, Elgin Corporation Bill Cogley said.

Since then, staff members have done "a lot of homework," including getting feedback from ride-share representatives, Cogley said.

The result is an ordinance that imposes "reasonable regulations" that protect consumers while acknowledging that taxis and ride-share fundamentally have different business models, Cogley said.

Councilman Rich Dunne, who voted "no," said he was concerned that the proposed ordinance doesn't level the playing field between taxi cabs and ride-share vehicles. Councilman John Prigge also voted against the proposal.

A "one-size fits all" approach, however, likely would curtail entrepreneurship and new business models, Cogley said.

"If you want to regulate TNCs (transportation network companies) like taxicabs, then you're not going to have TNCs in Elgin," he said.

Ride-share companies would need an annual $500 license from the city. Both taxis and ride-share vehicles older than five years would need to go through a yearly inspection.

Just like taxi drivers, ride-share drivers involved in accidents where pedestrians are injured would have to submit to alcohol and drug tests. Additionally, ride-share drivers couldn't pick up passengers who hail them from the street.

The proposal includes some easing of the city's taxicab ordinance with measures such as allowing prearranged flat fees for trips longer than 20 miles.

Still, Hjelm, owner of A Taxicab Leasing Corp. in South Elgin, said she believes the new provisions are a slap in the face to the 15 or so cab companies that operate in Elgin.

For example, the city wants to tighten eligibility criteria for who can work as a taxi driver based on state law criteria for ride-share drivers, she said.

"They gave the $40 billion company everything that they want. That's exactly what this is," she said.

Elgin police began looking into the issue after Hjelm contacted the department last summer asking for regulations on the ride-share industry. Hjelm unsuccessfully ran for a seat on the city council in April.

Councilman Terry Gavin said the proposed ordinance addresses his previous concern about imposing appropriate insurance requirements. "When you overregulate an industry, you can kill it," he said. "Or impede it."