Differences in the rules that govern taxi operations and ride-sharing services in Chicago “appear utterly arbitrary,” a federal judge has concluded.
In a written opinion, U.S. District Judge Sharon Johnson Coleman did not rule on the merits of allegations that the city is playing favorites by imposing more stringent requirements on taxi drivers than on their counterparts with such services as Lyft and Uber.
But Coleman declined to dismiss the equal-protection claims included in a lawsuit brought against the city by taxi owners and drivers and cab companies’ trade group, the Illinois Transportation Trade Association.
The city’s requirements in several areas — including background checks, drug tests, insurance, annual fees, unregulated fares and vehicle age, maintenance and inspection — “are far more onerous” for taxi drivers than for drivers with ride-sharing services, Coleman wrote.
She conceded the city has a legitimate interest in increasing the availability of transportation and encouraging diversity and consumer options in the “for-hire” market.
However, Coleman wrote, she doesn’t understand how treating taxi drivers and drivers for ride-sharing services differently helps the city realize these goals.
She also doesn’t understand how purported differences in the taxi and ride-sharing industries justify the different rules, she wrote.
While Coleman cleared the way for the plaintiffs to pursue their equal-protection claims, she dismissed the other counts in their suit.
Those counts accused the city of violating the plaintiffs’ constitutional rights to due process and to just compensation for any private property taken for public use.
Other counts dismissed by Coleman were claims brought under Illinois law for breach of contract, promissory estoppel and equitable estoppel.
The lead attorneys for the plaintiffs are Edward W. Feldman, Michael L. Shakman and Stuart M. Widman, all of Miller, Shakman & Beem LLC.
The city is represented by attorneys who include William Macy Aguiar and David M. Baron, both of the Law Department.
Both sides in the case declared victory.
Trade association spokeswoman Mara S. Georges said the taxi industry is pleased Coleman agrees that “those who provide the same service should be treated the same by government.”
“It really is a matter of safety for the public and protection for the public,” she said, “things like chauffeur’s licenses and adequate insurance and vehicle inspections for anybody who is transporting the public for hire.”
Georges said Coleman’s ruling clears the way for the taxi industry to seek an injunction against a Chicago ordinance governing ride-sharing services.
She also said the trade association has not yet decided whether to ask Coleman to reconsider the dismissal of the other counts.
Law Department spokeswoman Chloe Rasmas also praised the ruling.
“The city is pleased that the court dismissed the majority of the plaintiffs’ claims with prejudice,” Rasmas said in an e-mail. “We continue to believe that the plaintiffs’ remaining claims are likewise legally insufficient and intend to vigorously oppose them.”
The city council enacted an ordinance last year regulating ride-sharing services, or transportation network providers (TNPs).
The ordinance does not impose the same requirements on TNPs that taxi companies must follow.
For example, maximum meter rates are set by the city for taxis and by TNPs for their own drivers.
The Chicago Police Department conducts required background checks on taxi drivers, while TNPs conduct their own checks.
Taxi drivers must submit to annual drug tests conducted by city-approved authorities. TNPs must have drug policies, but those policies do not have to include a testing requirement.
Taxi drivers, but not TNP drivers, must comply with non-discrimination laws and may not refuse to pick up passengers based on the requested destination.
One of the suit’s remaining counts alleges the city denied taxi drivers their right to equal protection before the TNP ordinance was enacted. The other counts alleges the same violation after the enactment.
In her opinion, Coleman rejected the argument that taxi and TNP drivers are not similarly situated and that the equal-protection claims therefore should be dismissed.
Rides in both taxis and TNP vehicles may be arranged ahead of time, Coleman wrote.
When it comes to getting a ride without advance notice, she wrote, “the court sees no material difference between raising your arm on a street corner and putting your location in an app with a request for immediate transport.”
TNP passengers enter into a contract with their driver when they arrange for a ride, while taxi passengers do the same when they get into the vehicle, Coleman wrote.
And she wrote the fact that fares are set by the city for taxis and by TNPs for their drivers is “an artificial difference” created by the city.
Coleman issued her opinion Tuesday in Illinois Transportation Trade Association, et al. v. The City of Chicago, No. 14 C 827.