Maybe it was the Summer Solstice, although more likely it was Mayor Rahm Emmanuel’s playing a bit of hardball with dissenting aldermen.
Whatever it was, the Chicago City Council headed into the first weekend of summer having successfully passed a pair of ordinances that – while far from ideal – were decidedly less frosty toward so-called “sharing economy” services than appeared likely to be the case just a few weeks ago.
To start with the bad news, the council passed by a 43-7 vote a measure that would give local neighborhood councils the power to petition to ban short-term-rental services like Airbnb and HomeAway, in addition to laying a host of new fees on the services. In a separate 36-12 vote, the council voted to require ridesharing drivers for transportation network companies like Uber and Lyft to obtain and maintain chauffer’s licenses, which generally require them to take and pass an online course.
The good news is that both bills could have been way worse.
The biggest change to the final ridesharing bill is that it drops a provision that would have required drug tests and fingerprint-based background checks for all TNC drivers. We’ve already written extensively about the problems with fingerprint check requirements, which most recently prompted both Uber and Lyft to exit the Austin market (a thing they’d also threatened to do in Chicago).
The final measure instead calls for a study to be conducted on whether fingerprint background checks are needed. The language also drops a provision that would have required companies to offer handicapped-accessible vehicles, instead giving the TNCs up to a year to come up with a plan to accommodate those with disabilities. Finally, the bill also drops a distinction under current law that separates TNCs into “Class A” and “Class B” services, depending on whether their drivers are largely full-time or largely part-time.
As to the short-term-rentals bill, an earlier version would have placed on the spacesharing firms’ shoulders significant responsibility (and ultimately, legal liability) for hosts’ behavior. Airbnb had threatened to sue over any such requirement.
The final bill does grant residents of neighborhoods zoned for single-family homes the ability to petition to restrict home rentals within their zones. But this would not apply in more densely zoned parts of the city, and the final version provides a mechanism for such petitions potentially to be overturned with the signatures of enough dissenting neighbors.
Alas, the final measure does preserve a bunch of costly fees, spread out among all the parties to the transaction. Hosts will have to pay a $60 charge for each property they list. Guests will finance a 4 percent surcharge on the cost of each rental. And Airbnb itself (and presumably any future STR services in the city) will have to pay the city a $10,000 license to operate.
Which just goes to show: compromise is possible sometimes, but it doesn’t come cheap.