By Leonor Vivanco, @lvivanco
12:27 PM CDT, April 9, 2014
When rideshare companies go into surge pricing mode during peak times such as rush hour, bad weather and holidays, they would have to provide riders with true fare quotes in dollars, under key changes to Mayor Emanuel's proposal to regulate the industry.
Emanuel, who has has been working to regulate the rideshare industry, put forth a proposal in February. The taxi industry has taken its battle to court, claiming that rideshare companies are unfairly competing with cabs and don't have to abide by the same city rules.
Surge pricing is among the latest changes proposed by the city to address the issues of the popular industry.
Some riders have complained about the high prices for rides when surge pricing is in effect. Companies like UberX notify riders of surge pricing by presenting a multiplier of how much the fare would increase if they choose to accept a ride.
The city would require companies to publicly announce when surge pricing periods are in effect and take steps to make sure customers clearly agree to the price and get a full fare quote. If that doesn't alleviate complaints, the city would reserve the right to put a cap on surge pricing.
Other changes include creating two categories of rideshare licenses based on how many hours drivers work.
Companies with company-wide driver averages of less than 20 hours a week would be required to pay $10,000 for an annual Class A license plus $25 per driver. Class A category companies would need to get city approval of their background check process, random drug testing, driver training program and vehicle inspection.
Comparatively, companies whose drivers average more than 20 hours a week would be required to pay $25,000 for an annual Class B license plus $25 per driver. Drivers would be required to get public chauffeur licenses, which means the city would conduct the background checks and drug tests. The companies would be required to get an annual third-party 21-point inspection of all vehicles as well as city approval for a driver training program.
In addition, rideshare companies would be required to pay a fee for every vehicle that is not wheelchair-accessible and provide service to all parts of the city, like cabs are required to do.
In a statement, Uber said it wants to continue to engage in an open dialogue with the city.
"It’s premature to comment on the ordinance until we review it in full, however, Uber remains committed to common-sense regulations that put consumers and drivers–not taxi companies–first," said Andrew Macdonald, Uber's Midwest regional general manager. "Let’s find a permanent home for ridesharing in Chicago without imposing outdated taxi regulations that have failed both riders and drivers for decades."
Lyft said it has not seen any of the changes to the proposed ordinance.
"We look forward to continuing the discussion toward a solution for ridesharing in Chicago that furthers public safety but allows for consumer choice and innovation to thrive," Lyft said in a statement.
The initial proposal also required that rideshare companies obtain $1 million in commercial auto liability insurance and $1 million in commercial general liability insurance, pay the ground transportation tax and be prohibited from dropping off and picking up passengers at the city's airports and McCormick Place.
The proposed ordinance has had hearings but has not yet gone to the full City Council for approval.
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