CITY HALL – Three ride-hailing firms agreed Thursday to pay $10.46 million to the city of Chicago, acknowledging they failed to follow the city’s ordinance for vetting drivers.
Mayor Rahm Emanuel said he planned to use the proceeds of the settlement — reached before a lawsuit was filed by Corporation Counsel Ed Siskel— to “expand and extend” the city’s mentoring programs as part of its violence prevention efforts. The mayor’s proposal must be approved by the City Council as part of the 2019 budget.
Uber will pay $6.4 million, while Lyft will pay approximately $4 million, the mayor’s office announced.
Business Affairs and Consumer Protection Commissioner Rosa Escareño said the city discovered an ineligible driver in October 2017 and launched an in-depth investigation. Escareño said she could not immediately provide the number of drivers that drove for the ride-hailing services that should have been disqualified.
That month, ABC7 reported that a man was allowed to drive for Lyft, despite having been convicted of aiding terrorism and sentenced to seven years in federal prison.
The problem has now been corrected, with all drivers now having undergone the proper checks to see whether they have a criminal record or a significant number of moving violations, Escareño said.
“It was a process error,” Escareño said, adding that all drivers have been re-checked and the firms have agreed to undergo additional audits to ensure they are in compliance with the city’s ordinance.
Escareño said she felt “very comfortable” that the errors have been corrected and the public is not at risk.
Siskel said the size of the settlement — touted by the mayor as the largest fine assessed against ride-hailing services by any municipality — “should serve as a deterrent.”
“When there are mistakes that happen, we are going to be all over it,” Siskel said, crediting his office’s new affirmative litigation division for taking swift enforcement action.
Lyft Director of Public Policy Prashanthi Raman said safety is the firm’s top priority.
“We’ve worked closely with the city to switch background check providers and re-screen all active Chicago drivers,” Raman said.
Uber Midwest Regional General Manager Erin Guthrie said in a statement that the firm “immediately took corrective action to fix the error and have since conducted extensive reviews with the city to bring our processes fully in line with Chicago regulatory requirements.”
“We are committed to doing the right thing and take our responsibility to comply with regulations seriously,” Guthrie said.
The settlement comes after New York City politicians approved a one-year cap on new licenses for ride-hailing companies, and as Ald. Anthony Beale (9) and Ald. Ed Burke (14) consider introducing legislation next month to limit the number of licenses and impose a minimum wage for drivers.
Touted by Emanuel as the toughest in the nation, the city’s ordinance prohibits drivers from having more than two moving violations in the previous year, and allows those with criminal records to drive for the firms five years after they complete their parole or probation. It does not require drivers to be fingerprinted, as Beale has repeatedly proposed.
The City Council approved a proposal from Emanuel to hike the per-ride fee by 15 cents in 2018 and another 5 cents in 2019 to fund CTA infrastructure projects, including high-definition security cameras.
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Emanuel said he had asked his staff to see how many children and teens could be served by expanded mentoring programs.
“If it was up to me, it would start at third grade,” Emanuel said.
The city has spent $13 million on the Mayor’s Mentoring Initiative in the past two years to reach eighth- ninth- and 10th-grade students, while private firms including Exelon, People’s Gas, Comcast, Jimmy Johns, Bank of America, Uber and Ulta Cosmetics have contributed $12 million.
In the spring, the program was expanded to include seventh-grade students, Emanuel said.
“We have seen what happens when we provide our kids with positive alternatives in life and to guns and gangs,” Emanuel said, crediting mentoring programs at Hyde Park High School with raising the number of freshmen on-track to graduate from 60 percent to 90 percent.
Emanuel said he had been briefed on data set to be released this week by the Chicago Public Schools that show an all-time low dropout rate.
Department of Family and Support Services Commissioner Lisa Morrison Butler said data analyzed by the University of Chicago Crime Lab proves that the mentoring programs have been successful in increasing high school graduation rates and reduces violence.
“We know that mentoring is not an end all solution to everything that children are facing,” Morrison Butler said. “But we do think it is an essential tool to have in our tool kit.”
Much of the money the city has spent on mentoring programs has gone to Becoming A Man, a group that has been lauded by President Barack Obama.