No free ride for Uber, Lyft under Illinois liability proposal

The bill would regulate rideshare companies like a common carrier such as taxis, buses and airlines.
In this Jan. 12, 2016, file photo, a ride share car displays Lyft and Uber stickers on its front windshield in downtown Los Angeles. (AP Photo/Richard Vogel, File)

Rideshare companies such as Uber and Lyft would be regulated like taxi companies and other so-called common carriers under legislation passed by the Illinois House.

The bill, sponsored by Rep. Jennifer Gong-Gershowitz (D), would eliminate the exemption in state law that states rideshare companies are not considered taxicab associations and, therefore, are not common carriers.

A common carrier is a company that provides transportation services to the public such as taxis, buses and airlines. Rideshare companies have largely escaped that designation — and the regulation and liability that come with it — by instead being tabbed as transportation network companies, which use software to connect drivers and passengers but do not themselves provide the transportation.

Gong-Gershowitz said it is a distinction without a difference and that the reason common carriers are regulated is because customers give up control to ride as a passenger.

“There is no difference between the lack of control that a rider has the moment they step into an Uber or a Lyft and the lack of control that a rider has when they step into a taxicab or a train or an elevator,” Gong-Gershowitz told Capitol News Illinois.

Her bill would subject rideshare companies to the same liability standard as common carriers. Gong-Gershowitz has cited the case of a Lyft driver in Chicago who was accused of raping a passenger at knifepoint. The courts found that because Lyft is exempt in state law from common carrier status, the company could not be held directly liable for the alleged assault.

In a letter to Gong-Gershowitz opposing the bill, Brent Kent, a senior public policy manager at Lyft, said current rules and liability standards in Illinois provide riders “ample protection” and that the change would drive up costs for customers.

“TNCs are already held liable when loss or injury occurs as a result of negligence on the part of the TNC,” Kent wrote. “The proposed changes would increase frivolous litigation, even when the state-mandated $1 million liability policy would cover injuries, making a direct suit against a TNC unnecessary to compensate injured parties, and costly for both parties.”

The letter said Lyft has taken multiple steps to ensure passenger safety, including conducting annual background checks on drivers, monitoring driving records, and offering features on the Lyft app that allow a passenger to share their location and contact emergency assistance.

Uber also opposes the bill and has warned that the change would make Illinois an outlier and could result in service reductions.

“This proposal would make Illinois the only state that treats rideshare this way, severely impacting drivers’ ability to earn money,” Uber said in a statement to Pluribus News.

Gong-Gershowitz counters that the ride-share industry has become so ubiquitous today that it no longer makes sense to exempt it from common carrier standards.

“[T]he rationale that existed in 2015 just doesn’t hold up in today’s market,” she told Capitol News Illinois.

Nevada Sen. Dina Neal (D), chair of the Revenue and Economic Development Committee, has introduced a bill similar to Illinois’s that would also apply to autonomous vehicle providers.

In a letter opposing that measure, Chamber of Progress, a tech industry group whose corporate partners include rideshare and AV companies, said the change would “likely benefit trial lawyers while substantially increasing costs for TNCs and AVs and ultimately consumers who rely on the service TNCs provide.”

The ridesharing industry disrupted the taxi industry more than a decade ago as it won over many customers by offering an easy way to hail a ride by phone app. By 2017, 48 states and Washington, D.C., had passed legislation related to ride-hailing apps, according to the Texas A&M Transportation Institute.

The Illinois legislation will next be taken up by the Senate.