*** UPDATED x1 *** Rauner sides with Uber
Tuesday, Jul 22, 2014 - Posted by Rich Miller
* Bruce Rauner staged an event today designed to put pressure on Gov. Pat Quinn to veto the ride-sharing regulation bill…
“Our kids use it a lot,” Rauner said Tuesday morning while about to step into an Uber car – a 2005 Toyota Camry with 200,000 miles on it — whisking him to 5044 S. Wabash for a campaign stop about early childhood education. “There are a lot of neighborhoods in Chicago where there aren’t cabs.” […]
He said some level of background checks for ride-sharing drivers “probably does make sense.” So does a certain level of insurance, though he didn’t have any coverage minimums in mind. […]
Rauner’s Uber driver was Schaumburg resident Mohammed Meghani, 43. He has been driving an Uber car since December and bought a used Camry in 2013 for $5,500 for strictly that purpose. He has 20 to 30 Uber customers a day, and it’s his primary way of making a living for him, his wife, a stay-at-home mom, and their three children, ages 14, 11 and 7. Meghani said he had most recently worked in the banking industry, for Chase and earlier for Bank of America and LaSalle Bank and Bank of Lincolnwood. […]
[The bill] requires chauffeur licenses for drivers who work more than 18 hours a week, Rauner said.
“That’s just a restraint of competition,” Rauner said. “That shouldn’t be necessary.”
I’m not sure that’s a “restraint of competition” because taxi drivers have to obtain the same license.
And one of the main hangups is the insurance coverage requirement. Uber doesn’t insure drivers very much in between rides.
Also, an old Camry with 200,000 miles on it isn’t exactly what one thinks of when one thinks of Uber. That’s gotta be UberX.
The campaign also posted a brief video to Instagram and is planning to send an e-mail to supporters.
…Adding… The blast email…
I am running for governor to bring back a booming economy to Illinois. We need to encourage job growth by giving innovative companies greater opportunities – not restricting them.
Uber is an innovative, growing company that provides ride-share services to millions of people across the country and wants to create 425 more jobs right here in Illinois. Yet, Governor Pat Quinn may sign a bill that will hamper this fast growing company with burdensome regulations and impede job creation.
Illinois should encourage companies like Uber to grow here, but this bill does the opposite. I’d veto it. Ride-share drivers should have insurance and background checks. But Pat Quinn shouldn’t sign this bill – it sends another signal that Illinois is closed to innovation.
I love Uber. And we need a state that supports job creation — not runs it off. Tweet Pat Quinn — tell him to veto the anti-Uber bill.
*** UPDATE *** From Mara Georges, Illinois Transportation Trade Association…
“This legislation is simply focused on making sure all Illinoisans have basic consumer protections when they step into a car for hire. Customers have the right to know their driver has passed a comprehensive police background check and drug test and carries sufficient insurance in case of an accident.
Ride-share companies claim they can regulate themselves, but time and time again they have proven that they cannot protect their drivers or passengers. It is unfortunate that Bruce Rauner would side with Silicon Valley multi-billionaires and venture capitalists, rather than Illinois consumers.”
They’ve released a second version of the statement…
“This legislation was passed by the Illinois General Assembly with overwhelming bipartisan support and is simply focused on making sure all Illinoisans have basic consumer protections when they step into a car for hire. Customers have the right to know their driver has passed a comprehensive police background check and drug test and carries sufficient insurance in case of an accident. It is unfortunate that Bruce Rauner would side with Silicon Valley multi-billionaires and venture capitalists, rather than Illinois consumers.”
- Because I say so... - Tuesday, Jul 22, 14 @ 3:05 pm:
““Our kids use it a lot,” Rauner said”…..when our limo driver has the day off.
- A guy... - Tuesday, Jul 22, 14 @ 3:14 pm:
Good.
- Joan P. - Tuesday, Jul 22, 14 @ 3:17 pm:
If Uber-driving is someone’s “primary way of making a living”, you’re darn tootin’ they should have a chauffeur’s license and insurance.
- Demoralized - Tuesday, Jul 22, 14 @ 3:22 pm:
Licenses restrain competition? That’s nonsense. Why in the world is it a bad thing to want some sort of licensing requirement for these drivers? Any of you brilliant economic analysts want to tell me how that restrains competition in the least?
- anon - Tuesday, Jul 22, 14 @ 3:28 pm:
Agreed. Uber wants special privileges. It’s very easy to compete in the marketplace when the rules don’t apply to you.
- wordslinger - Tuesday, Jul 22, 14 @ 3:29 pm:
Shouldn’t you know what’s in a bill before you urge that it be vetoed?
Insurance and a chauffeur’s license is a level playing field, not a restraint.
- unclesam - Tuesday, Jul 22, 14 @ 3:41 pm:
Does Uber realize that, with Rauner supporting them, they just increased the likelihood Quinn signs the bill they don’t want?
Amateur move.
- Puddles - Tuesday, Jul 22, 14 @ 3:45 pm:
This is why the cab industry is failing. Instead of innovating, like Uber, cab companies continue to operate off the same business model for the past 30 years.
Instead of developing apps, they still use the same terrible dispatch services.
Instead of pushing for deregulation, and reduced prices, they use their lobby for increase regulation of competition.
- Richmond - Tuesday, Jul 22, 14 @ 3:49 pm:
Finally Rauner takes a position on something.
- State Sen. Clay Davis - Tuesday, Jul 22, 14 @ 3:49 pm:
The state already requires drivers to carry insurance and to maintain vehicles to a safe standard. There’s no reason there should be additional hoops to jump through in order to carry other passengers in your vehicle, since you can legally and safely carry your friends and family in it.
Cab companies and systems are corrupt oligopolies that use rents from scarce resources (in this case taxi medallions) to push up prices, abuse workers, and lobby elected officials to keep the status quo in place. Meanwhile, drivers work obscene hours just to pay off the weekly lease.
Taxi regulators bilk the drivers out of obscene fees to get their precious license, delivering useless course materials that is essentially what can be learned for free from the Secretary of State’s driving tips.
I’d like to see more Democratic pols get on board with these innovative services and realize that unemployed workers can stand to benefit from them.
- Rich Miller - Tuesday, Jul 22, 14 @ 3:51 pm:
SSCD, there is and always will be a big difference between personal and commercial insurance and licensing. You’re pretty unclear on the concept.
- truthteller - Tuesday, Jul 22, 14 @ 3:55 pm:
Why did his driver lose his jobs in the banking industry? Because there isn’t enough competition in the cab industry or because of the recklessness of financiers like Rauner.
If Rauner wants to help the middle class how about a union made American vehicle?
- Demoralized - Tuesday, Jul 22, 14 @ 3:56 pm:
@Sen Davis:
That’s probably the dumbest logic I’ve seen. If you can’t see the different between personal use of a vehicle and a business then you have no business being a state Senator.
- State Sen. Clay Davis - Tuesday, Jul 22, 14 @ 3:57 pm:
“SSCD, there is and always will be a big difference between personal and commercial insurance and licensing. You’re pretty unclear on the concept. ”
Uber insures its drivers while they are carrying passengers, and there’s debate over if that should extend to when they are “off the clock” - fine to have that debate.
Commercial licensing of someone driving a car (not a big rig, which does require advanced training) to carry passengers is, at its core, unnecessary. We already have that standard - it’s called a Driver’s Test! Taxi “training” is no different from the standard training everyone else receives to drive a car. The main purpose of cabbie licensing is revenue.
- Precinct Captain - Tuesday, Jul 22, 14 @ 3:59 pm:
Puddles, one reason cab companies in Chicago don’t want deregulation is that they’ve spent millions on getting their medallions under a system set up by the city.
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/06/20/taxi-medallions-have-been-the-best-investment-in-america-for-years-now-uber-may-be-changing-that/
Of course, if taxi regulation actually worked, people might be happier with the taxi industry because it might do its job, like serving all neighborhoods.
- State Sen. Clay Davis - Tuesday, Jul 22, 14 @ 4:00 pm:
Demoralized, feel free to elaborate or make a point of some kind.
- DuPage Rep - Tuesday, Jul 22, 14 @ 4:02 pm:
==It is unfortunate that Bruce Rauner would side with Silicon Valley multi-billionaires and venture capitalists, rather than Illinois consumers==
I wonder if Ms. Georges would apply this standard to her former employer, Hizz Honor
- Demoralized - Tuesday, Jul 22, 14 @ 4:06 pm:
@Senator Davis:
I believe I made a point. There is a difference between personal use and a business use. The point I made doesn’t really differ from what Rich said.
I’d be perfectly happy to go out to my car, stick a decal on the side and offer people rides for money. That’s pretty much what you are saying isn’t it? I’ve got a license and insurance. Why do I need anything else?
- Taser - Tuesday, Jul 22, 14 @ 4:06 pm:
If Rauner or one of Rauner’s large campaign donors is an Uber investor, this could become a campaign issue very quickly.
- Precinct Captain - Tuesday, Jul 22, 14 @ 4:07 pm:
==Commercial licensing of someone driving a car (not a big rig, which does require advanced training) to carry passengers is, at its core, unnecessary.==
The insurance industry certainly treats them differently, why shouldn’t the state (i.e. polity)?
- A guy... - Tuesday, Jul 22, 14 @ 4:07 pm:
Uber works. All over the place. This is a classic example of why Illinois has problems attracting new or expanding businesses. Some regulation is reasonable. The Illinois way isn’t. Huge consumer base is the only thing that keeps us in the game.
- Kizzoboy - Tuesday, Jul 22, 14 @ 4:08 pm:
SSCD you are totally right. Very simple microeconomics problem. The licensing systems allows medallion owners to restrict supply, regardless of demand. (Shift supply curve left) Just like trade unions, steel companies etc. It only hurts consumers. Demand for Uber is so obvious based on their growth and increasing valuation.
- Demoralized - Tuesday, Jul 22, 14 @ 4:09 pm:
@A guy:
You want to explain how this regulation is burdensome? I’m all ears.
- William j Kelly - Tuesday, Jul 22, 14 @ 4:10 pm:
It shows true Bipartisan crony capitalism for rauner to support Rahm’s family investment in uber. You think Illinois is bad now? You haven’t seen anything yet, just wait for the Rahmner machine to decide who wins and who loses!
- circular firing squad - Tuesday, Jul 22, 14 @ 4:10 pm:
How long will this stance hold? Guessing Flip dives to the other side by Friday
- William j Kelly - Tuesday, Jul 22, 14 @ 4:11 pm:
Spoiler alert: they win and you lose!
- State Sen. Clay Davis - Tuesday, Jul 22, 14 @ 4:12 pm:
“I’d be perfectly happy to go out to my car, stick a decal on the side and offer people rides for money. That’s pretty much what you are saying isn’t it? I’ve got a license and insurance. Why do I need anything else?”
Only if I could book a ride in your car through an app that lets me rate your performance and fires you if you get bad ratings. Only if the app takes credit cards ahead of time so I don’t have to give you cash, and has a large network of drivers available so there’s one everywhere I need it. Deal.
- Demoralized - Tuesday, Jul 22, 14 @ 4:13 pm:
@William Kelly:
Your comments are like that Six Degrees of Kevin Bacon game. Everything traces back to Rahm for you.
- Rich Miller - Tuesday, Jul 22, 14 @ 4:14 pm:
===Only if… Only if… and has…===
Restraint of trade!
lol
- Say It Ain't So! - Tuesday, Jul 22, 14 @ 4:15 pm:
FYI: State Senator Clay Davis is a fictional character on the HBO drama The Wire, played by actor Isiah Whitlock, Jr.
- DuPage Rep - Tuesday, Jul 22, 14 @ 4:18 pm:
==FYI: State Senator Clay Davis is a fictional character on the HBO drama The Wire, played by actor Isiah Whitlock, Jr.==
Too bad we can’t use his famous saying, “Sheeeee___”
- Demoralized - Tuesday, Jul 22, 14 @ 4:19 pm:
@Sen. Davis:
You can get those things that plug into your cell phone or iPad to swipe credit cards. I’ll research my options. My 9 year old could develop the app I’m sure.
I’ll see you in front of the Capitol.
In all seriousness, why don’t you propose a bill to de-regulate the Taxi industry if you haven’t already?
- D.P.Gumby - Tuesday, Jul 22, 14 @ 4:22 pm:
Brucie doesn’t like regulation of nursing homes, either…
- William j Kelly - Tuesday, Jul 22, 14 @ 4:22 pm:
Demoralized, are you aware that Rahm’s brother Ari has a major stake in uber or do you think I am just imaging that?
- State Sen. Clay Davis - Tuesday, Jul 22, 14 @ 4:23 pm:
PC - I just don’t see a compelling reason for an additional regulation scheme for people doing a normal function that is already licensed.
- Anyone Remember - Tuesday, Jul 22, 14 @ 4:25 pm:
Regulation of taxis dates to the days of The Mob. The “regulation model” has in its roots the aim of preventing mob influence / ownership of taxi companies, which did happen.
http://en.wikipedia.org/wiki/John_C._Montana
- State Sen. Clay Davis - Tuesday, Jul 22, 14 @ 4:26 pm:
C’mon not fair Rich - that was rhetorical
Demoralized - why try to fix something that’s so broken? I’d rather we replace it completely.
- MrJM (@MisterJayEm) - Tuesday, Jul 22, 14 @ 4:27 pm:
“There are a lot of neighborhoods in Chicago where there aren’t cabs.”
And some fine day the Baron may visit one of those neighborhoods!
– MrJM
- Bill White - Tuesday, Jul 22, 14 @ 4:32 pm:
How does Uber make the total economic pie larger?
Shifting around the deck chairs may look like economic activity, but is it really?
- Rich Miller - Tuesday, Jul 22, 14 @ 4:35 pm:
===How does Uber make the total economic pie larger? ===
A dozen years ago or so, when restaurants started springing up around Oprah’s studio, I could easily get a cab out there, but had a heck of a time getting one back home. The same thing seemed to always happen to me in Little Italy. So, I’d either drive or, more often, just not go. Knowing that Uber will come get me relatively quickly means I’d venture into areas that don’t have a lot of taxis in them.
- Bill White - Tuesday, Jul 22, 14 @ 4:41 pm:
Rich, would selling more taxi medallions have the same effect?
And that way, revenue would go to reducing Chicago’s debt rather than to Silicon Valley investors.
- so... - Tuesday, Jul 22, 14 @ 4:47 pm:
==Rich, would selling more taxi medallions have the same effect?
And that way, revenue would go to reducing Chicago’s debt rather than to Silicon Valley investors.==
That just perpetuates the taxi companies rent-seeking, which is inherently economically inefficient.
- State Sen. Clay Davis - Tuesday, Jul 22, 14 @ 4:47 pm:
Taser - If Gov. Quinn is counting on voters under 40 in Chicago for his margin of victory, connecting Rauner to Uber as an attack is a pretty bad idea.
- Bill White - Tuesday, Jul 22, 14 @ 4:48 pm:
Has Uber exaggerated claims about how much money it’s drivers make?
http://www.businessinsider.com/how-much-money-uber-drivers-really-make-2014-7
- OldSmoky2 - Tuesday, Jul 22, 14 @ 4:48 pm:
Puddles… ===Instead of innovating, like Uber, cab companies continue to operate off the same business model for the past 30 years.
Instead of developing apps, they still use the same terrible dispatch services.===
There are already apps to get cabs in Chicago. Don’t know about them all, but with Hailo you tap to get a cab, pay by card (only enter details once, then use it again and again), and get receipts by email. Pretty simple.
- Rich Miller - Tuesday, Jul 22, 14 @ 4:49 pm:
===would selling more taxi medallions have the same effect===
It would drive down the price of medallions for sure. Make some multi-millionaires less rich.
But the problems with getting a cab in underserved areas involve the company dispatchers. You never know how long you’re gonna be waiting and if they’re even telling the truth about showing up.
- Rich Miller - Tuesday, Jul 22, 14 @ 4:51 pm:
===rent-seeking, which is inherently economically inefficient===
Careful, that’s how Rauner made his gazillions.
- Bill White - Tuesday, Jul 22, 14 @ 4:53 pm:
=== But the problems with getting a cab in underserved areas involve the company dispatchers. You never know how long you’re gonna be waiting and if they’re even telling the truth about showing up. ===
I agree 100% and I’ve faced the same problem you describe.
However, I am not particularly confident that Uber dispatchers will be any better at getting cars into under served neighborhoods.
- Judgment Day (on the road) - Tuesday, Jul 22, 14 @ 5:02 pm:
“…Insurance and a chauffeur’s license is a level playing field, not a restraint.”
———–
Insurance is obviously a requirement. But a need for a ‘chauffeur’s license’ is just a revenue producer.
And probably a highly inefficient one at best.
Here’s the link: http://www.cityofchicago.org/city/en/depts/bacp/supp_info/public_chauffeurinformation.html
What do you want to bet that this entire process takes weeks at minimum to complete?
This whole thing looks like something that was cobbled together back in the 1970/1980’s, and that’s probably (pre Uber) the last time anybody ever asked a question of “Why are we still doing things this way?”
- State Sen. Clay Davis - Tuesday, Jul 22, 14 @ 5:08 pm:
Bill White - the beauty of tech services like Uber (and yes, I realize I sound like a total tech nerd/dotcom employee which of course I am) is that drivers have the power to see where the available riders are, and go there themselves, without being dispatched. And since the fares are prepaid on credit card, they don’t have to carry cash and can’t get stiffed. If they live in a “dangerous” neighborhood that traditional cabbies usually avoid, they can take passengers and not worry about getting robbed or stiffed.
- G'Kar - Tuesday, Jul 22, 14 @ 5:23 pm:
This is a serious question as I live in Central Illinois: Is Uber really a big political issue? Will it drive (no pun intended) votes?
- State Sen. Clay Davis - Tuesday, Jul 22, 14 @ 5:30 pm:
G’Kar - tech investment sure is a big issue in Chicago, at least. Uber, Groupon, GrubHub, Google - it’s where a lot of the hot commercial real estate and employment action is right now.
- Richmond - Tuesday, Jul 22, 14 @ 5:37 pm:
Some of the largest auto insurance companies are based here in ILL. So kind of surprised Rauner would get into this fight.
- Common Sense - Tuesday, Jul 22, 14 @ 5:46 pm:
Who really likes Uber? Young, urban voters. A group Pat Quinn can’t lose if he is to win in November. Effectively destroying UberX’s ability to do business is a real, tangible issue that will affect these voters. Future budgets cuts are less easy to internalize. I think it’s a smart campaign move for Rauner.
- Cheryl44 - Tuesday, Jul 22, 14 @ 5:47 pm:
“Taxi “training” is no different from the standard training everyone else receives to drive a car.”
Senator, I’d love to see you take and pass the test to get a taxi license in Chicago. They give you an address and ask if it’s closer to Point A or Point B. I have a friend who spent the money and took the classes and still flunked the test twice before passing it.
- steve schnorf - Tuesday, Jul 22, 14 @ 6:38 pm:
Cheryl, I’m really troubled hearing that. There may be some problem with the testing then, because some of the drivers I get can’t figure out Chicago’s pretty easy to understand street numbering system even in the loop
- Loop Lady - Tuesday, Jul 22, 14 @ 7:14 pm:
off topic, but good to know Mara landed on her feet after the Daley administration was done working their magic on the City of Chicago…
- Yellow Dog Democrat - Tuesday, Jul 22, 14 @ 7:27 pm:
So, Rauner objects to the drug testing? Or the fact background checks are “comprehensive”?
I recall Uber’s press statement. We want to create jobs. It is just a question of how many.
Schnorf, and any other economist here will back me up.
Saying that the private sector creates jobs is like saying bears do their business in the woods.
Bears don’t do it because they like squatting behind a tree. They do it because they have no other choice.
And just like bears, every job created in a politician’s press release represents waste/profit losses for the company. The minute a company can figure out how to make widgets without you or with a machine that never asks for a raise, never gets sick, doesn’t require a pension, they will.
Uber says they will create 425 jobs? Great. I am betting by the time they get around to it, they will have figured out how to get that number down below 400, veto or not.
- Yellow Dog Democrat - Tuesday, Jul 22, 14 @ 7:32 pm:
@Rich -
If only Chicago had Divvy back in your heyday.
- 36th Warder - Tuesday, Jul 22, 14 @ 10:42 pm:
Where was Mara at when Mayor Daley was selling off every asset in the city of Chicago and driving this city into the brink of bankruptcy? That’s right, she was his legal counsel.
Flintstone (taxi) technology versus Jetsons (Uber) technology, let the consumers pick and regulate the industry but don’t kill it because Mara says so.
- Ruetheday - Wednesday, Jul 23, 14 @ 8:11 am:
Rauner almost got it right…the legislation is bad and all it does is kill the free market.
It should be vetoed.
Deregulate taxi’s — there’s plenty of riders to go around.