Eye On Illinois: Ride-share companies set to lose liability carve-out

House Bill 2231 is another entry in the ongoing debate about whether Illinois is good or bad for business.

The House passed the proposal 73-36 on March 16. The Senate voted 38-18 Thursday. If Gov. JB Pritzker signs off, Illinois will put ride-share companies such as Lyft and Uber in the same legal basket as “common carriers” like other forms of hired transportation. That means the companies aren’t shielded from legal liability for the conduct of their drivers.

“The reason for … holding common carriers to a higher standard of care is the lack of control that the rider has,” lead sponsor state Rep. Jennifer Gong-Gershowitz, D-Glenview, said on her website. “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.”

This legislation is clearly aimed at protecting the average patron by giving them more recourse in civil court, and that inarguably puts a larger burden on the company. Increased liability means increased costs for insurance, screening and training, not to mention the exponential expense if those safeguards prove insufficient.

Neither is this solution seeking a problem: safety of passengers and even drivers has fueled litigation in Illinois and across the country. The specific local hook, according to Gong-Gershowitz, is a lawsuit from an unidentified woman who alleged a Chicago Lyft driver raped her in 2017. After an appellate panel affirmed ride-share companies’ exemption from common carrier status, the case ended in an out-of-court settlement in January 2022 before reaching the Illinois Supreme Court.

“The reason for … holding common carriers to a higher standard of care is the lack of control that the rider has. 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.”

—  State Rep. Jennifer Gong-Gershowitz, D-Glenview

And yet the plan isn’t clearly anti-business, at least to the extent it arguably levels a playing field where other enterprises have faced a disadvantage since the 2014 Transportation Network Providers Act, which codified the type of exemptions the new law looks to eliminate.

“Other common carriers,” Gong-Gershowitz said, “do not enjoy this exemption and it has been used by ride-share companies to shield themselves from liability and auto crashes and cases where drivers have sexually assaulted their passengers.”

If losing this exemption makes it more expensive for Uber, Lyft and other app-based ride providers to operate in Illinois, but that means patrons have better legal protections, is the trade worthwhile?

Yet if we leave customers out of the conversation altogether to consider the question of fairness among business competitors, there’s a larger discussion about what other commercial sectors might be imbalanced on account of prior attempts to accommodate.

Uber and Lyft once were groundbreaking disruptors, but their success changed the market conditions informing the 2014 law. Surely those circumstances aren’t unique to ride sharing.

• Scott T. Holland writes about state government issues for Shaw Media. Follow him on Twitter @sth749. He can be reached at sholland@shawmedia.com.