Is it a case of a big, lumbering near-monopoly trying to protect its turf by calling in political chits? Or is it consumers who potentially are at risk through what some consider smartphone-enabled hitchhiking?

A major political row over just that has developed as both the City Council and Illinois General Assembly — prompted by a squad of some of the city's best-connected lobbyists, consultants and media advisers — battle over whether and how to regulate the fast-growing ride-sharing industry in which "cabbies" are just folks using their own vehicles as often or rarely as they want.

On one side are conventional cab companies, which say there's no way they can compete with San Francisco-based companies Uber Technologies Inc. and Lyft or with other tech-savvy upstarts unless the new firms are held to the same liability and performance standards that conventional companies say are applied to them.

"To have competition, you have to have a level playing field," says Pat Corrigan, one of two partners in the company that owns 2,600 tax medallions and operates them under the Yellow, Checker and American United brands. But the field is so uneven that "we won't be in biz too much longer at this rate," he adds. "I give us six months."

To make the point, Mr. Corrigan and other owners have filed a federal lawsuit. And they're pushing a bill in Springfield that was officially unveiled today by Rep. Mike Zalewski and Sen. Marty Sandoval, both Chicago Democrats, that would require all shared-ride operators to carry tons of insurance, drive vehicles no older than four years no longer than 10 hours a day, obtain chauffeurs' licenses and be prepared to serve all neighborhoods, sometimes with wheelchair-accessible vehicles.

Mr. Corrigan just isn't ready for real modern-day competition, retorts Andrew Macdonald, Midwest regional manager at Uber. While the firm supports things such as liability insurance and mandatory background checks for drivers, "I'm not sure my job as an entrepreneur in the city of Chicago is to create a level playing field" — not when Uber can offer riders cheaper prices and drivers more opportunity.

Uber isn't "poaching" Yellow and Checker cabs' drivers, he adds. "Drivers are independent contractors. Of course they're going to choose the best deal for them."

Uber is backing a more modest proposal offered by Mayor Rahm Emanuel (read it below). While it would require insurance and background checks, it would allow drivers to use their regular licenses and cars — providing they aren't "salvage, rebuilt, junk or total loss" cars — permit digital dispatching of cars and direct all wheelchair-related calls to a central city dispatch system.

Mr. Emanuel's bill also is sponsored by Ald. Emma Mitts, 37th, chairman of the council's License Committee, who is scheduled to hold a preliminary hearing on the matter March 27.

Said a mayoral spokesman, "The city has introduced an ordinance that would fill the regulatory vacuum for ride share under current state law and city ordinances by establishing a balanced set of requirements to protect consumers, keep riders safe and allow these companies to continue to meet growing customer demand."

BIG NAMES INVOLVED

This being Chicago, all sorts of top political hands have been hired by one side or the other, and lots of rumors are floating around about who's pulling whose strings.

Among those working for the conventional cab industry are former city Corporation Counsel Mara Georges, independent lawyer Michael Shakman, ex-mayoral lobbyist Victor Reyes and well-known publicists June Rosner and Dennis Culloton.

Included on the other team are Mr. Emanuel's election lawyer, Mike Kasper, lobbyist John Nicolay, City Hall political veteran Greg Goldner and publicist/strategist Thom Serafin.

Adding intrigue to the stew is the fact that Uber is being financed by some big investment firms that have rubbed shoulders with Mr. Emanuel, including Goldman Sachs. At least one member of Chicago's Pritzker clan, Nicholas Pritzker, has invested in the firm as well, though he no longer lives in Chicago.

Similar disputes have arisen in other cities, but the core questions remain the same: Are tough regulations needed to protect the public, and must the rules be the same for all providers? Or is it best just to open the doors and let the market work it out, sort of like how consumers have a choice between full-service airlines and cheaper upstarts?

"It's better to be proactive," Mr. Zalewski says. If a driver for a conventional cabbie messes up now, "the license and medallion are at risk."

I'm not so sure, though. Those of an age will remember that the era of Mayor Richard J. Daley ended when then-Consumer Affairs Commissioner Jane Byrne charged that political insiders had "greased" a cab fare hike for powerful owners. That cleared the way for her to beat Michael Bilandic and become mayor.

Beyond that, by all indications, Uber and Lyft seem to be offering a product the market wants.

The truth probably is somewhere in the middle. That means the ongoing fight over what to do will be vigorous and likely continue a while.