NEW YORK (MainStreet) Uber and Lyft celebrated a victory on Tuesday when Illinois Governor Pat Quinn vetoed legislation to establish statewide standards on car sharing services, tightening government oversight on what has so far been a largely unregulated market.
In a statement released by the governor's office, Quinn said that he doesn't want a "one-size-fits-all approach" to the new industry, preferring to leave the issue to local oversight and the private market.
The bill, HB 4075, would have required that all drivers for hire carry commercial insurance and chauffeur's licenses, and would have allowed car insurance companies to suspend private coverage during commercial operation. In practice this would have hampered or killed entirely services such as Lyft and Uber X, which run based on non-professional drivers giving rides for extra cash. Uber's traditional model of scheduling cabs or car services would have remained largely unaffected.
Cab drivers in Chicago praised the bill as necessary to their business model. According to one driver, allowing these services to flood the market with untrained, unprofessional drivers has made it increasingly difficult to operate, especially in challenging conditions such as rush hour and Chicago's downtown when the amateurs are creating even more traffic problems.
Uber drivers can operate without paying any of the costs for insurance, training or a medallion, he said, which not only negates all of the investment professional drivers put into their job, but also makes it nearly impossible to compete.
Ride sharing services, however, celebrated the veto as a victory for their own business model. On its blog, Lyft wrote that HB 4075 would "[shut] out innovation, progress, and people from neighborhoods all over Chicago who depend on Lyft every day." Rival service Uber celebrated the veto with an e-mail blast titled "Thank You, Governor Quinn!" announcing that the governor "stood up for Illinois consumers by vetoing HB 4075!"
In Chicago, perhaps the most important state market for the urban-centered services, the local government has passed its own version of ride share regulation. The city rules require driver training, background checks, license and insurance requirements and restrict access to O'Hare Airport, although they haven't yet taken effect.
HB 4075 will now return to the state legislature for a vote to override the governor's veto. Although it passed by large enough majorities to do so in both chambers, it is traditionally more difficult to gather votes to override a veto than simply pass a bill. It is uncertain whether the bill will find enough support a second time.
--Written for MainStreet by Eric Reed, a freelance journalist who writes frequently on the subjects of career and travel. You can read more of his work at his website www.wanderinglawyer.com.