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Seven months after first starting to consider a licensing scheme for transportation network providers like Lyft and Uber, Evanston aldermen scrapped the idea Monday night.

They opted instead to have the city’s legal staff draft a resolution indicating that the city is deferring any regulatory action in the area based on recent adoption of insurance rules for the companies at the state level.

The resolution appears to be designed to assuage concerns by the city’s corporation counsel that remaining completely silent about the growing business model could leave the city subject to lawsuits by someone injured in a car-sharing accident.

Most aldermen were unpersuaded that a licensing system was needed — saying consumers complain much more about taxicabs that are regulated than the new unregulated services and suggesting that the state insurance rules removed much of the risk to consumers.

Corporation Counsel Grant Farrar had proposed adopting a regulatory scheme for the transportation network providers essentially identical to that in Chicago — including the same hefty licensing fees.

Alderman Don Wilson, 4th Ward, who initially suggested regulating the ride-sharing companies last June, said he was still concerned about the disparity in having taxis heavily regulated while the transportation network providers face very few regulatory constraints.

He said the going rate for a taxi medallion in Chicago is over $200,000 and suggested that it was unfair for communities to allow that value for the taxi operators to be destroyed.

The medallions in Chicago and some other major cities trade for high prices because the muncipalities restrict the number of taxi licenses available.

Evanston also restricts the number of taxicabs that can operate here — to 140. There’s been no mention in the City Council debate of what the current market value of an Evanston taxi license may be.

Alderman Jane Grover, 7th Ward, said she shared Wilson’s concern about creating a level playing field for the different businesses and said she wonders “how much the medallion requirement distorts the market for providers.”

But Alderman Ann Rainey, 8th Ward, said she anticipates that the transportation network provider model is likely to displace taxis.

Related stories

Alderman again hold off on Uber licensing scheme (1/14/15)

Evanston to again consider limits on Uber (1/12/15)

Aldermen back away from rideshare clampdown (9/25/14)

City seeks to regulate ride-sharing firms (9/22/14)

Is Uber a threat to Evanston? (6/24/14)

Bill Smith is the editor and publisher of Evanston Now.

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2 Comments

  1. Great decision on Uber
    Not regulating Uber was the right decision. It’s good for the environment; fewer cars on the road – when you know you get a clean, safe, odor free ride at a reasonable price it’s easy to choose a to leave your own car at home. And when google driverless cars (probably mostly electric) are perfected Uber will be even better.

    Good call City Council!

    1. Uber Forever

      Uber is a great service and a wonderfully elegant experience.  It's a testament to free markets and constantly improving upon old constructs.  If you've never used Uber, you are missing out.  It is simply a brilliant service.  Unfortunately there are people and institutions that have a lot to lose in this regulated space.  However, how often have you left a taxi and thought to yourself that the experience from acquisition to payment was enjoyable and truly valuable.  Nine out of ten times I use uber I think about how much i love the service.

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