CHICAGO (CBS) -- The City of Chicago is being sued for prohibiting advertising in ridesharing vehicles, such as those from Uber or Lyft.
WBBM Political Editor Craig Dellimore reports.
The lawsuit is filed on behalf of Vugo, a company that wants to put targeted video ads in ridesharing cars. Jeffrey Schwab, staff attorney for the Liberty Justice Center, said there is no good reason to prohibit advertising in those vehicles.
"There's no difference between ridesharing and taxis that justifies banning commercial advertising in one, while allowing it in the other," he said.
The city ordinance being challenged makes a distinction between commercial taxis and rideshare vehicles, which are mostly privately owned. Schwab argues that's unconstitutional.
Vugo CEO Rob Flessner said drivers with his targeted video ads make 60 percent of all ad revenue within the cars. He even cited an example of a promotion his company is doing on the west coast.
"We're running a guaranteed promotion in Los Angeles, where drivers can make a guaranteed 25 cents extra per trip," he said.
The City ordinance said the prohibition is in line with the fact that rideshare vehicles are personal vehicles operating on a transportation network platform.
A spokesperson for the Department of Law released a statement late Thursday in response to the Vugo lawsuit: "The City is still reviewing this lawsuit, however, courts have already upheld the City's right to regulate the ride-sharing industry differently from the taxicab industry. The city will vigorously defend its regulations, just as it has successfully done in previous cases."
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