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Taxi industry suffers twin blows

Monday, Sep 29, 2014

* As noted below, Gov. Quinn celebrated with Uber today as it announced it would add 420 jobs in Chicago

Uber Technologies Inc., is keeping an informal political deal it had struck with Gov. Pat Quinn and, as a result, Chicago will be getting hundreds of new Midwest headquarters jobs.

The big ride-sharing firm today announced that it will add 420 jobs to its Central Region headquarters in Chicago by the end of 2016, more than quadrupling the number of non-driving staffers it has here now.

Uber had dangled the possibility of such jobs while Mr. Quinn was considering signing a bill that Yellow, Checker and other conventional cab companies had been pushing to impose tighter rules on companies that dispatch vehicles via cell phone apps. And now that Mr. Quinn has done so, the company says it’s moving ahead.

The bill’s sponsor, Rep. Michael Zalewski (D-Riverside), says he has enough votes to override

Noting that the bill passed the Il. House with 80 votes and got a “substantial” majority in the Senate, Zalewski predicted that the votes will be there for an override.

“This is a public safety issue. You have Uber-X drivers riding all over Northeastern Illinois who are not subject to proper background checks and don’t have enough insurance. We need to make sure riders are safe,” Zalewski said. […]

Zalewski scoffed at the suggestion that an override of the governor’s veto could cost Chicago 420 new jobs.

“Uber is an innovative, strong company that wants to grow in Chicago. They just feel that government regulation will interfere with their business model and make them less successful than they are now. I disagree. They’ll be just fine,” he said.

* But the US Attorney’s office just sent out this press release..

CHICAGO TAXICAB OPERATOR INDICTED AND ARRESTED FOR ALLEGEDLY CONSPIRING TO FALSIFY TITLES OF SALVAGED AND REBUILT TAXIS

CHICAGO ― A Chicago used car broker and taxicab operator was arrested today after being indicted on federal charges for allegedly causing at least 180 vehicles that were salvaged or rebuilt to illegally obtain clean titles from Indiana and Illinois and, as a result, to illegally operate as licensed and registered taxicabs in the City of Chicago.

The defendant, ALEXANDER IGOLNIKOV, 67, of Northbrook, was charged with one count of conspiracy and two counts each of interstate transportation of false automobile titles and possession of false auto titles in a five-count indictment that was returned by a federal grand jury on Aug. 27 and unsealed today following his arrest.

Ignolikov was scheduled to appear at 3 p.m. today before U.S. Magistrate Judge Jeffrey T. Gilbert in Courtroom 1386 in U.S. District Court.

Igolnikov, also known as “Alexandr Igolnikov” and “Alex,” was the owner of Seven Amigos Used Cars and vice president of Chicago Elite Cab Corp., which operated taxis under city taxi medallions managed by Chicago Elite Cab and related entities affiliated with Chicago Carriage Taxi Company. City taxi medallion rules prohibit any vehicle that was ever issued a “salvage” or “rebuilt” title in any state from being used as a taxicab in Chicago.

The indictment alleges that between 2007 and April 2010 Ignolikov conspired with three unnamed auto brokers, two in Indiana and one in Illinois, to purchase vehicles with salvage titles from online auction sites; fraudulently obtain either clean or rebuilt Indiana titles for those vehicles by submitting false paperwork to the Indiana Bureau of Motor Vehicles; and then using those re-issued Indiana titles to obtain clean Illinois titles, concealing that the vehicles were previously issued salvage or rebuilt titles.

According to the indictment, in many instances, Ignolikov agreed with three auto brokers to have the damaged vehicles towed from the online auctions sites’ yards in out-of-state locations to the premises of Seven Amigos and Chicago Carriage near 26th Street and South Wabash Avenue in Chicago, where the vehicles would be repaired.

In addition to submitting false paperwork concealing the vehicles’ history and damage to Indiana authorities, Ignolikov and the brokers also submitted a false affidavit certifying that an Indiana law enforcement officer had personally examined the vehicles and verified certain identifying information, the charges allege. In reality, no officer had examined the vehicle and the affidavit of a police officer was signed by unnamed Officer A for a fee, or unnamed Officer B, or other individuals without any physical inspection, according to the indictment.

In some instances, based on the allegedly false towing paperwork and false police affidavits, the Indiana Bureau of Motor Vehicles issued clean titles to various auto brokers for vehicles that were previously issued salvage titles. In other instances, other individuals obtained Indiana rebuilt titles through fraud and then placed stickers on those titles concealing that the titles identified the vehicles as being rebuilt. After obtaining either a clean or rebuilt Indiana title for the vehicles, Ignolikov purchased the vehicles in the name of Seven Amigos, Chicago Elite Cab, or other businesses and paid a premium above the purchase price in exchange for the brokers’ work in securing the clean or rebuilt Indiana titles, the indictment alleges.

Finally, Ignolikov and his business associates allegedly used the clean and rebuilt Indiana titles to obtain clean Illinois titles for the vehicles, and later concealed from the City of Chicago the fact that the vehicles were previously issued salvage or rebuilt titles, which prohibited them from being used as taxis.

So much for the “public safety” argument.

- Posted by Rich Miller        

24 Comments
  1. - Michael - Monday, Sep 29, 14 @ 2:35 pm:

    These criminals supposedly plan to add 400 jobs….

    But, dear reader, home many jobs have they destroyed ?

    THOUSANDS.


  2. - Formerly Known As... - Monday, Sep 29, 14 @ 2:39 pm:

    But we have unlimited breadsticks!

    Who made the Quinn crew’s choice to lead with Olive Garden over Uber? More jobs, and no minimum wage hypocrisy involved. Desperate to share any positive economic news or just clumsy?

    As for this, traditional taxi companies will have to find a way to adapt or be left behind.


  3. - ghost - Monday, Sep 29, 14 @ 2:46 pm:

    So I have seen how people drive in Chicago…. the condition of the vehicles is not the public saftey issue in the city :)


  4. - Anon. - Monday, Sep 29, 14 @ 2:48 pm:

    ==So much for the “public safety” argument.==

    Do you mean that the fact that a taxi company broke a federal law in order to facilitate its violation of a safety rule that applies only because they were required to get a medallion, and did so for some time without being detected, means that we shouldn’t try to impose a similar safety rule on ride-sharing companies that compete with taxis?


  5. - phocion - Monday, Sep 29, 14 @ 3:03 pm:

    If taxi riders choose to ride in an unregulated vehicle, that should be their choice. If taxi drivers think they can make more money for Uber, that’s their choice. This nanny state nonsense has to end. It’s a government created monopoly that does not enhance service or lower costs. Zalewski and the dinosaur taxi industry need to adjust or go the way of.


  6. - MrJM (@MisterJayEm) - Monday, Sep 29, 14 @ 3:16 pm:

    “These criminals supposedly plan to add 400 jobs…”

    Calling their competitors “criminals” on the very day that a cab company is indicted by a federal grand jury for conspiring to use unsafe vehicles? That’s just a bit absurd.

    – MrJM


  7. - Precinct Captain - Monday, Sep 29, 14 @ 3:19 pm:

    ==- Formerly Known As… - Monday, Sep 29, 14 @ 2:39 pm:==

    The governor was at the Olive Garden spot earlier than the Uber thing, so that is why it was announced first.


  8. - Lefty Lefty - Monday, Sep 29, 14 @ 3:29 pm:

    Apples and oranges, Mr. Miller. The oversight of the driver v. the oversight of the vehicle. Both valid issues that aren’t — and may never be — settled.

    And–the system appears to be working as far as the vehicle goes. Dude got caught not playing by the rules. Uber doesn’t want any rules.


  9. - Formerly Known As... - Monday, Sep 29, 14 @ 3:29 pm:

    Precinct Captain - thank you. It seemed like they just decided to send out one press release before the other.

    That makes more sense, since schedules sometimes cannot be adjusted around which announcement you would like to make first. Gracias.


  10. - anon - Monday, Sep 29, 14 @ 3:34 pm:

    There should not be two different regulatory standards - one for Uber and one for the cab industry. They are performing exactly the same function and the insurance, background checks, criminal checks, vehicle regulations should be the same.


  11. - Responsa - Monday, Sep 29, 14 @ 3:47 pm:

    Changing and adapting business models to fit the times and increasing competition should be welcomed, not stomped on in this state. So good on Uber’s vision and good for Uber for staffing midwest HQ jobs.

    Traditional/conventional taxicab companies did not improve their image or strengthen their “safety” case with the announcement of this indictment today.


  12. - anon - Monday, Sep 29, 14 @ 3:48 pm:

    Drudge Report has been reporting for a number of days about Uber drivers attacking passengers. In fairness, those articles should be posted as an update.


  13. - Rich Miller - Monday, Sep 29, 14 @ 3:51 pm:

    === In fairness, those articles should be posted as an update.===

    Any in Illinois today? Because today two things happened.


  14. - anon - Monday, Sep 29, 14 @ 4:00 pm:

    Don’t really think we should be waiting for this to happen in Illinois but then again I haven’t checked the police blotter.
    http://www.sfgate.com/crime/article/Uber-driver-accused-of-hammer-attack-on-San-5783495.php
    http://mynews13.com/content/news/cfnews13/news/article.html/content/news/articles/cfn/2014/9/25/uber_driver_arrest.html


  15. - a drop in - Monday, Sep 29, 14 @ 4:02 pm:

    A very quick google search turns up 1 Uber Cab assault in SF. And 2 sexual assaults by cab drivers in Texas, Toronto. And a fake cab driver assaulted someone in New York. What’s your point?


  16. - Steve - Monday, Sep 29, 14 @ 4:04 pm:

    Oh Rich can’t you play the game and pretend limiting taxi cab licenses is about public safety?

    http://www.chicagobusiness.com/article/19970322/ISSUE01/10005362/taxi-work-drives-burke-into-latest-conflict-corner#


  17. - Judgment Day - Monday, Sep 29, 14 @ 4:12 pm:

    “Do you mean that the fact that a taxi company broke a federal law in order to facilitate its violation of a safety rule that applies only because they were required to get a medallion, and did so for some time without being detected, means that we shouldn’t try to impose a similar safety rule on ride-sharing companies that compete with taxis?”
    ————————-

    The ‘rules’ you are talking about are City of Chicago rules. Well, based on that, the City ‘watchdogs’ were at best, asleep on the job, or more likely, MIA. Or corrupt.

    So, why even have some of those rules if there’s no apparent enforcement capabilities? The regulatory system failed. Badly. So why reward it for being inept and incompetent, at best? So it can go out and fail us again?

    We need to totally re-think the taxi regulatory environment. We just got proof that the System just failed us totally, completely, miserably. And it likely put people in danger.

    The system may have been great for the 1980’s and 1990’s. But today, not so much. Time to re-write the rules.

    And in that effort, political types like Rep. Michael Zalewski (D-Riverside) come across as being technological troglodytes.


  18. - Under Further Review - Monday, Sep 29, 14 @ 4:15 pm:

    How ironic that today I watched a DVD of “The Sopranos” in which a Russian émigré, who worked as a livery driver, beat up a fare.


  19. - Black Ivy - Monday, Sep 29, 14 @ 4:50 pm:

    Not surprising that Governor Quinn is tangled up with Uber! And, equally, that the U.S. Attorney’s Office is investigating this very industry. #birdsofafeather


  20. - anon - Monday, Sep 29, 14 @ 4:50 pm:

    If the regulatory standards don’t mean anything then why should they apply to the cab industry? Why should cabs be forced to have the insurance? Why should Chicago regulate their fares? Why should they be forced to buy medallions? Why should they be mandated to carry handicapped passengers (now even more) when Uber does not have these requirements? Why should the cab industry be forced to buy new vehicles when UberX drivers can use a 10 year old vehicle? Why should the cab industry be treated different for doing the same thing as Uber is doing? Why? Why? Why?


  21. - Steve - Monday, Sep 29, 14 @ 5:11 pm:

    - anon -

    You ask great questions. Keep it up. Look what happened up in Milwaukee.

    https://www.ij.org/milwaukee-taxis


  22. - Precinct Captain - Monday, Sep 29, 14 @ 5:46 pm:

    ==- Black Ivy - Monday, Sep 29, 14 @ 4:50 pm:==

    Try re-reading the post.


  23. - wordslinger - Monday, Sep 29, 14 @ 7:10 pm:

    The indictment reads like Alex had himself some friends at the Indiana Bureau of Motor Vehicles and some Indiana coppers helping him on the alleged taxi scam.


  24. - Carroll County - Monday, Sep 29, 14 @ 8:34 pm:

    420 jobs? Someone at Quinn’s office or Uber’s is a clever hipster.

    https://en.wikipedia.org/wiki/420_(cannabis_culture)

    Someone in JCAR created a 420 point system for the new enterprise zone program too.

    What’s going on down there?


Sorry, comments for this post are now closed.


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