A driver for both Uber and Lyft picks up passengers.
Photograph by Al Seib — LA Times via Getty Images
By Sy Mukherjee
May 27, 2016

Proposed regulations could drive Uber and Lyft out of America’s third largest city.

The ride-sharing giants warned Chicago’s City Council during testimony this week that proposed regulations requiring their drivers to obtain a chauffeur’s license are too cumbersome. The companies recently made good on a threat to abandon the Austin, Texas market after losing a similar licensing and regulation battle there.

Under the Chicago proposal, Uber and Lyft drivers would have to pay a $115 fee, undergo fingerprinting and a background check, and pass a one-day certification course. Vehicles would also have to be inspected by the city government.

“If this ordinance were to pass, ride-sharing as we know it would no longer exist in Chicago,” said Marco McCottry, Uber’s Chicago general manager, during his testimony before the City Council. Lyft vice president of government relations Joseph Okpaku echoed the sentiment, pointing out that the vast majority of the firm’s drivers are part-time workers who would be unwilling to comply with the regulations.

Many council members appeared unpersuaded by the arguments, arguing that they were simply trying to “level the playing field” between ride-sharing and taxi services, and that companies worth tens of billions of dollars could afford to comply with regulations.

Chicago Mayor Rahm Emanuel (D) has expressed strong opposition to the licensing proposal.

Some cities’ recent pushback on Uber and Lyft have raised questions about how to best regulate innovative new companies in an era of rapid technological advances. Politicians like Sen. Elizabeth Warren (D-Mass.) have also turned their fire on the gig economy, arguing that companies like Uber and Lyft undermine worker protections.

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