Rideshare Firms Settle with Chicago for $10.4 Million for Allegedly Performing Background Checks Not Consistent with City Ordinance

Written By ESR News Blog Editor Thomas Ahearn

On August 16, 2018, Mayor Rahm Emanuel announced the City of Chicago was preventing neighborhood violence by investing $10.4 million in youth mentoring programs coming from legal settlements with Uber, Lyft, and Via over allegations they performed background checks that were not consistent with standards set by the City’s rideshare ordinance, according to a press release on the Governor’s website.

“The goal of the commonsense regulation of the rideshare industry was to ensure consumers have access to a variety of safe, reliable transportation options,” said Mayor Emanuel stated in the press release. “As a result of this settlement, Uber, Lyft and Via recognized that an error was made and took immediate steps to ensure public safety by making changes to ensure compliance with our ordinance.”

The City of Chicago Transportation Network Providers (TNP) Ordinance has some of the strictest requirements in the nation for background checks on drivers. For example, the TNP prohibits drivers with recent multiple moving violations and negative chauffeur license status, as well as drivers with a criminal history from driving for a period of five years after they have exited the justice system.

However, the city of Chicago discovered that Uber, Lyft, and Via had allowed some drivers with ineligible backgrounds to drive. All companies have rerun background checks on their drivers, are now following the correct process, and have no disqualified drivers currently working for them. In addition to internal process changes, Uber is paying $6.4 million, Lyft is paying $4 million, and Via is paying $62,500.

“These settlements reflect Chicago’s commitment to enforcing its ordinances and send a strong message that businesses must follow the proper procedures when conducting business in Chicago,” Chicago Corporation Counsel Ed Siskel stated in the press release. “We will continue to be vigilant when it comes to protecting our residents and holding companies accountable for their improper actions.”

On August 7, 2018, ESR News reported that a bill strengthening background checks on rideshare drivers by requiring all individuals applying to be a driver for a ride-sharing service operating in Illinois to provide their full legal name, social security number (SSN), and date of birth for the background check process became law. The new law, House Bill 4416, was passed with bipartisan support.

Previously, prospective ride-share drivers only had to provide their address, age, driver’s license number, motor vehicle registration, and automobile insurance liability. The genesis of the bill – which was introduced by State Senator Daniel Biss (D-Evanston) –  was an incident in Biss’s district where a ride-share driver under court supervision for a previous DUI was arrested for a DUI while working.

Several cities and states have passed laws to strengthen background checks that ridesharing companies perform on their drivers. The growing scrutiny over background checks for ride-sharing drivers is one of the “ESR Top Ten Background Check Trends” for 2018 selected by Employment Screening Resources® (ESR), a global background check firm headquartered in the San Francisco, California area.

In April 2018, a CNN investigation found that at least 103 Uber drivers in the U.S. were accused of sexually assaulting or abusing their passengers in the past four years and 31 Uber drivers were convicted for crimes ranging from forcible touching and false imprisonment to rape. CNN also found 18 cases of Lyft drivers being accused of similar crimes in the past four years with four convictions.

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Employment Screening Resources® (ESR) – a global background check firm – is accredited by the National Association of Professional Background Checks (NAPBS), undergoes annual SOC 2 audits, adheres to the Privacy Shield Framework, and won the 2018 TekTonic Award from HRO Today Magazine for innovative and disruptive background screening technology. To learn more, visit www.esrcheck.com.

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