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Taxi Service Agreement

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CITY OF CHICAGO UNIFORM TAXICAB LEASE AGREEMENT

FOR TAXICAB MEDALLION LICENSE NUMBER:

THIS DOCUMENT MUST BE KEPT IN VEHICLE AT ALL TIMES

Lease Type

Lease Term

FROM at AM / PM TO at AM / PM

Start Date (MM/DD/YEAR)    Time (HH:MM)    End Date (MM/DD/YEAR)    Time (HH:MM)

*12 HOUR WEEKLY Lease Daily Shift: AM / PM TO AM / PM

Start Time (HH:MM)    End Time (HH:MM)

Lessee/Public Chauffeur:

Taxicab Vehicle Information

Fuel Source:    WAV:

Taxicab Lease Amount and Lessee’s Worker’s Comp. Insurance Contribution

LEASE RATE TIER NUMBER

TOTAL LEASE AMOUNT

LESSEE’S WORKER’S COMP. INS. PAYMENT

Lessor Information

I certify that all the information on this lease is true, correct, and accurately reports the terms and conditions of the full taxicab lease agreement in compliance with the Municipal Code of Chicago and applicable rules and regulations.

CITY OF CHICAGO UNIFORM TAXICAB LEASE AGREEMENT

THIS DOCUMENT MUST BE KEPT IN VEHICLE AT ALL TIMES

Rules and Regulations governing City of Chicago licensed taxicab and public vehicle industry are available at www.cityofchicago.org/bacp. The Municipal Code of Chicago (MCC) is available at www.amlegal.com.

► MCC §9-112-230 - Tiered Lease Rate Structure and applicable lease rate caps:

Tier No. 12 Hour Daily Maximum Lease Rate 12 Hour Weekly Maximum Lease Rate 24 Hour Daily Maximum Lease Rate 24 Hour Weekly Maximum Lease Rate
1 $74 per 12 hour shift $518 total for seven consecutive 12 hour shifts $101 per 24 hour shift $707 total for seven consecutive 24 hour shifts
2 $69 per 12 hour shift $483 total for seven consecutive 12 hour shifts $93 per 24 hour shift $651 total for seven consecutive 24 hour shifts
3 $59 per 12 hour shift $413 total for seven consecutive 12 hour shifts $85 per 24 hour shift $595 total for seven consecutive 24 hour shifts

● The above listed maximum lease rates include all charges, including taxes, insurance, and vehicle maintenance repairs.

● Refer to the “Approved Taxicab Vehicle List with Lease Tiers” at www.cityofchicago.org/bacp to match a taxicab vehicle to a tier as described in the chart.

● If a Medallion Only Lease, write “MO” in the “Lease Rate Tier Number” box on Page 1 of this form.

► MCC §9-112-240 – A Medallion License Only Lease Agreement is $350.00 per week.

► MCC §9-112-600 - Taxicab rates of fare – Lessee public chauffeurs pay a maximum per day fee of $4.50 towards worker’s compensation insurance coverage.

► MCC §9-112-180 and §9-112-190 - Medallion owners, managers, and affiliations are prohibited from using discriminatory or retaliatory practices towards public chauffeurs.

Pertinent Sections of the Taxicab Medallion License Holder Rules and Regulations

► RULE TX9.02 – 12 hour weekly leases must be for the identical shift time for all 7 consecutive days.

► RULE TX9.05 - Taxicab lease agreements must be tendered to the public chauffeur lessee.

► RULE TX9.06 - Public chauffeur lessee must be the sole driver of the leased taxicab.

► RULE TX9.07 - The maximum for a bond/security deposit is $500.00. If any money is deducted from the bond/security deposit balance, public chauffeur must receive an itemized statement. The bond/security deposit balance must be returned, upon request, to the public chauffeur within 60 days.

► RULE TX9.08 – A public chauffeur may enter into a separate written agreement for collision damage waiver or supplemental liability coverage.

► RULE TX9.09 – A public chauffeur may be charged up to an hourly $15.00 late vehicle return fee.

► RULE TX9.10 – In case of a vehicle break down, remaining lease term paid must be refunded back to public chauffeur.

► RULE TX9.11 – Anytime a public chauffeur makes a payment, he or she must receive a detailed written receipt.

► RULE TX9.12 – Public chauffeur may be requested to acknowledge receipt of written policies or enter into a contract regarding a contractual relationship. All documents must be in compliance with Federal, State, and City laws.

Pertinent Sections of the Public Chauffeur Rules and Regulations

► RULE 5.16 - Public chauffeurs may not allow an unlicensed chauffeur to drive a taxicab.

► RULE 10.02 – The public chauffeur lessee must be the sole driver of the leased taxicab.

► RULE 10.03 - Public chauffeur lessee must keep a copy of the current lease in his/her possession.

City of Chicago ● Department of Business Affairs and Consumer Protection

Public Vehicle Operations Division ● 2350 W. Ogden, First Floor, Chicago, IL 60608

BACPPV@cityofchicago.org ● 312-746-4300 ● www.cityofchicago.org/bacp

v.07.01.2012
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What a Taxi Service Agreement Covers

A Taxi Service Agreement is a written contract that defines the legal relationship between a taxi operator and another party, such as a driver, fleet owner, dispatch provider, or municipal authority. It allocates rights and responsibilities—service routes, fare splits, vehicle maintenance, insurance, licensing, payment terms, and termination conditions. The agreement may also address regulatory compliance, background checks, and recordkeeping. Clear terms help manage operational risk, clarify financial flows, and provide enforceable remedies for breaches while documenting proof of consent and consideration for both commercial and independent‑contractor arrangements.

Why a Formal Agreement Matters for Taxi Operations

A written Taxi Service Agreement reduces disputes by specifying payment, liability, insurance, and termination processes. It supports regulatory compliance, demonstrates parties’ intent to contract, and creates an auditable record for payroll/tax reporting and municipal permit reviews.

Why a Formal Agreement Matters for Taxi Operations

Who Commonly Uses a Taxi Service Agreement

Typical users include taxi company owners, independent drivers, fleet managers, and municipal license holders who must document commercial terms and regulatory responsibilities.

  • Taxi company owners and fleet operators who assign vehicles, routes, and revenue splits.
  • Independent drivers who contract to provide services under specific payment and insurance terms.
  • Dispatch platforms or third‑party service providers that manage bookings and remittance.

Primary Signatories

Company Owner

Owner or authorized company officer who commits the taxi operator to payment terms, insurance obligations, and operational rules. They must ensure compliance with municipal permits and revenue reporting.

Driver / Contractor

Driver or contractor who accepts the assignment, confirms vehicle condition and insurance, and agrees to compensation structure. Accurate identity and license information are required for tax and safety verification.

Core Sections to Include in the Agreement

A professional Taxi Service Agreement covers operational, financial, compliance, and termination topics so both parties understand performance expectations and legal remedies.

Parties

Full legal names and business entities for operator and driver, with contact information and taxpayer identification where required for payments.

Scope of Services

Detail routes, hours, booking methods, and whether the driver can accept other work; clarify vehicle assignment rules and service standards.

Compensation

Describe fare splits, commission rates, payment schedule, deductions, and procedures for disputed fares or refunds.

Insurance and Liability

Specify required insurance types and minimum coverages, who carries the policy, and indemnity obligations for losses or third‑party claims.

Regulatory Compliance

Assign responsibility for permits, inspections, background checks, drug testing, and local taxi licensing requirements.

Termination and Remedies

Define notice periods, grounds for immediate termination, post‑termination obligations, and dispute resolution mechanisms.

Step-by-Step: Filling Out the Agreement

Follow these steps in order to create a complete, enforceable document and reduce processing delays.

  • 01
    Collect party data: Gather legal names, IDs, vehicle and insurance information before drafting.
  • 02
    Define services: Specify routes, hours, and booking responsibilities in clear terms.
  • 03
    Set payment rules: Document fare splits, reconciliation schedule, and dispute handling.
  • 04
    Sign and date: All parties sign, date, and attach supporting documents or certificates.

Typical Agreement Workflow from Draft to Signed Record

This sequence shows a common routing pattern for preparing, approving, and storing a Taxi Service Agreement.

  • Draft document: Prepare template with editable fields and required exhibits.
  • Attach proofs: Include insurance, licenses, and vehicle documents.
  • Route to parties: Send to driver and company for review and signature.
  • Archive executed: Store the signed file and audit trail for compliance and recordkeeping.

Recommended Online Workflow Settings

Configure these settings when completing the agreement in a document platform to reduce friction and preserve evidentiary records.

Field Configuration
Signer Order Sequential or parallel, based on who must approve first
Authentication Email link with SMS code for higher assurance
Reminders Auto reminders at 3 and 7 days for pending signers
Attachments Require insurance and license uploads before signing

Digital Signing and Platform Considerations

Choose an eSignature platform that supports audit trails, secure storage, and integrations with your back‑office systems.

  • Formats supported: PDF, DOCX, and native web forms
  • Integrations: Connectors for accounting and dispatch systems
  • Security: TLS in transit and AES‑256 at rest

Representative eSignature Pricing and Feature Comparison

Compare common vendor pricing and feature availability for signing and storing Taxi Service Agreements; signNow is listed first per site conventions.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7‑day trial Varies by plan Varies by plan Varies by plan Varies by plan
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Key Deadlines Relevant to Operational and Tax Compliance

Observe these common dates to avoid penalties and maintain accurate financial reporting.

1099-NEC Filing:

Provide and file by Jan 31 when payments to nonemployees exceed reporting thresholds

Employee I-9 Retention:

Keep I-9 forms for 3 years after hire or 1 year after termination (8 CFR §274a.2)

Business License Renewal:

Varies by municipality; check local permit renewal dates to avoid suspension

Insurance Renewal:

Renew before policy expiration to maintain continuous coverage and compliance

Tax Return Deadline:

Federal Form 1040 due April 15 (extensions available with Form 4868)

Typical Agreement Lifecycle Milestones

A sequential view of the main stages from negotiation through closure for a Taxi Service Agreement.

01

Negotiation and Drafting

Define service scope, compensation and risk allocation in draft form

02

Verification

Collect IDs, licenses, insurance, and municipal permits before signing

03

Execution

All parties sign and date; attach required documents and certificates

04

Post-Execution Compliance

Archive the agreement and apply retention and reporting rules

Practical Tips to Avoid Common Problems

Small drafting and process choices improve enforceability and reduce downstream disputes.

Use precise compensation language
Spell out fare splits, deductions, and payment timing; vague phrasing creates disputes over amounts owed and reconciliation procedures.
Attach evidence of insurance
Require current insurance declarations as an exhibit and a mechanism for immediate suspension if coverage lapses.
Clarify contractor status
Document whether drivers are employees or independent contractors and follow applicable tax and labor reporting rules.
Keep a signed audit trail
Preserve timestamps, IP addresses, and signed copies to support execution validity and regulatory inspections.

Real-World Examples of Agreement Use

Illustrative examples show how companies operationalize the agreement and the results they achieve.

Optica Ventures LLC

Optica standardized driver agreements to reduce onboarding time by documenting insurance and payment terms up front.

  • The platform simplified remote signing and recordkeeping.
  • The company reports fewer disputes, faster payouts, and a clearer audit trail for municipal license reviews and contractor payments.

Martin Properties

A small operator moved to electronic agreements to manage multiple vehicles and drivers across routes.

  • Execution on mobile devices reduced delays.
  • With signed agreements and attached insurance certificates, the operator improved compliance documentation and reconciliations while reducing paper handling.

Security and Compliance Considerations

Encryption in Transit: TLS 1.2/1.3
Encryption at Rest: AES‑256
HIPAA Support: BAA available
Audit Trail: Timestamps and IP logs
Certifications: SOC 2 Type II
Authentication Options: Email, SMS, KBA, SSO

Penalties and Operational Risks to Know

Information Return Penalties: IRC §6721
Backup Withholding: 24% when TIN missing
I-9 Paperwork Fines: 8 CFR §274a.2
Insurance Lapse Risk: Civil liability exposure
Permit Suspension: Local regulatory fines
Contract Breach: Damages and injunctive relief

Common Preparation Mistakes to Avoid

  • Using vague compensation terms that create reconciliation disputes and delayed payments.
  • Failing to attach proof of insurance or vehicle registration before operation begins.
  • Overlooking local permit or airport access requirements that can suspend operations.
  • Not preserving a verifiable execution record (signed copy with audit trail).

How a Taxi Service Agreement Compares to Similar Contracts

Quick comparison of related document types to help you choose the correct contract template.

Document Type Taxi Agreement Contractor Agreement
Purpose operational terms broad service terms
Insurance Detail high detail variable detail
Regulatory Clauses yes, locality specific often minimal
Typical Parties operator & driver client & contractor

Frequently Asked Questions About Taxi Service Agreements

Answers to common legal, execution, and compliance questions about Taxi Service Agreements in the United States.


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