Congestion Plan or Regressive Tax? A Debate Over Ride-Hailing Fee Hikes

If you rely on ride-hailing services such as Uber and Lyft to get around Chicago, your fare could soon be higher.

Chicago Mayor Lori Lightfoot has proposed several new fees on ride-hailing trips as part of her 2020 budget, which she says will raise $40 million for the city while decreasing congestion and funding public transit improvements. 

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Poll: Do you think a hike in Uber and Lyft fees is a good idea for Chicago?

Chicagoans are currently charged a flat rate of 72 cents per trip in fees and taxes. There are also special surcharges levied at the city’s airports, in addition to McCormick Place and Navy Pier.

Lightfoot’s proposal would include an additional fee on all ride-hailing trips that start or end in the Loop on weekdays, from 6 a.m. to 10 p.m. The plan would also raise single-ride fees on any ride across the city, while decreasing fees for shared rides outside of downtown. 

Transit advocates like Melody Geraci, interim executive director of the Active Transportation Alliance, say the new fee structure is a good first step toward reducing congestion in the city.

“We actually don’t pay the true cost of driving in general. It’s heavily subsidized by the government, and many other countries, European countries in particular, have learned this lesson – that people need to understand the true cost that driving puts on our society.”

Those costs include not just congestion, Geraci says, but also greenhouse emissions and roadway safety.

But the proposal has garnered its fair share of critics – like the ride-hailing companies themselves, who say the fee hike is regressive and would disproportionately impact low-income residents who use the services.

In a statement, a spokesperson for Lyft said that “this proposal directly contradicts the Mayor’s repeated promises to not increase fees that hurt low-income Chicagoans most.”

Other detractors include the Rev. William Hall of St. James Church in Chatham. Hall says the proposal would add an “unacceptable” burden to people in his South Side community, who use ride-hailing services in part because they don’t have adequate public transit options.

“The emphasis on downtown is only one fraction of this tax,” Hall said. “You’re talking about people who use [ride-hailing services] to go to and from laundromats ... these are people who are just going neighborhood to neighborhood.” 

Geraci and Hall join us in conversation.

Related stories:

Lightfoot: No Property Tax Hike If Springfield Chips In

Congestion Charge a Tough Sell for ‘Overtaxed’ Chicagoans

Uber CEO Dara Khosrowshahi: ‘We’re Leaning Into Chicago’

What Congestion Pricing Could Look Like in Chicago

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