The Problem With Ridesharing Companies that Nobody Talks About

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Lyft, UberX, and Sidecar have all been in the news quite a bit lately. While proponents laud the "new" way of getting a ride (or some extra cash) there are some taxi drivers and cab companies who are understandably  upset that this new breed doesn't play by the same rules that they must abide by. 

But while the focus has been on the rideshare companies themselves, nobody is really talking about who may suffer the most from ridesharing: unlicensed drivers.

The law in Chicago can not be more clear:

9-104-020  License required.

It is unlawful for any person to drive a public passenger vehicle on any public way for the transportation of passengers for hire from place to place within the corporate limits of the city without first having obtained a license as a public chauffeur....

Plainly, any driver, regardless of whether they are dispatched by traditional radio or via a ridesharing app, who transports passengers for hire needs to be licensed as a public chauffeur. As of now, Lyft, UberX, and Sidecar all have programs for drivers who have no public chauffeur license. None make any bones about the fact that even unlicensed drivers will be paid for their work.

What's more, anybody transporting people around town for hire must have their vehicle licensed as well:

9-112-020 License required.

(a)   It is unlawful for any person to operate a motor vehicle, or for the registered owner thereof to permit it to be operated, for the transportation of passengers for hire within the city unless it is licensed by the city as a taxicab pursuant to this chapter, or as a public passenger vehicle pursuant to Chapter 9-114.

But what's the worst that could happen? As it turns out, it can be substantial. Fines for driving without a public chauffeur's license can be up to $1,000 (MCC 9-104-140). But that's not the worst of it. The violation for driving an unlicensed taxicab or public passenger vehicle is $2,000 plus any towing and storage fees (MCC 9-114-420). Towing is $150 and storage is $10 per day for the first five days of $35 per day thereafter (MCC 9-92-080). Towing and storage fees will add up even if the underlying case is dismissed. 

To be sure, the law may change and ridesharing could operate unencumbered in Chicago. But in the meantime, drivers looking to get some extra cash with these companies should know what they are getting themselves into. A change in political weather could find these drivers (and not the companies they work for) in real financial trouble.

Want to know more? Get in touch with License Law Group. Be sure to subscribe to our social media channels, too, for more licensing news.

by Daniel Rubinow, Principal Attorney

License Law Group


Daniel Rubinow