Chicago’s already-wounded taxicab industry “will not survive” Mayor Rahm Emanuel’s plan to deny cabbies their last bastion of exclusivity — by giving ride-hailing companies the lucrative right to make pick-ups at McCormick Place, O’Hare and Midway Airports, aldermen warned Monday.
Fourteen aldermen joined forces with the Illinois Transportation Trade Association and a union representing cabdrivers in demanding that Emanuel shelve his plan to impose $48 million in fees and surcharges on taxicabs and ride-hailing services that have siphoned business away from cabs until the playing field between the two industries is leveled.
Mara Georges, former Mayor Richard M. Daley’s longtime corporation counsel, is an attorney representing the taxicab industry.
She argued that the already-reeling taxicab industry simply cannot withstand the loss of airport and convention business that makes up nearly 20 percent of its annual revenue.
Georges noted that Emanuel’s plan would cost the average cabdriver $42 more each month. That includes $20 for an increased ground transportation tax and $22 a month in increased contributions toward an accessibility fund.
“If ride-sharing companies are allowed to access the airports, the taxi industry’s revenue will fall even more substantially than it already has. Increased fees plus decreased revenues means the taxi industry in Chicago will not survive,” she said.
“If the city of Chicago wants to allow ride-sharing companies to pick up passengers at the airport, McCormick Place and Navy Pier, it needs to ensure that rules between taxis and ride sharing vehicles are the same.”
Pressed to define a level playing field, Georges talked about the $600 annual license imposed on every taxicab operating on the streets of Chicago. Ride-sharing companies pay $10,000 to license their entire fleet, regardless of the number of vehicles.
Similarly, cabdrivers are required to obtain a $450 chauffeur’s license after going through extensive training. Ride-sharing drivers are neither licensed nor trained by the city.
“If there were some parity in the way the two kinds of vehicles were handled, vehicles that perform the same service, you would realize tens of millions of dollars,” Georges said.
Ald. John Arena (45th) was asked whether he believes Emanuel was favoring Uber and other ride hailing companies because the mayor’s brother, Hollywood super-agent Ari Emanuel, is an Uber investor.
“Obviously, that’s been bandied around quite a bit,” Arena said.
“I think we, as elected officials, have to be sensitive to the appearance of impropriety. I know I am in the decisions I make. I think the mayor should be sensitive to that as well.”
Last month, Emanuel defended his decision to give cabdrivers a 15 percent fare increase but hand ride-hailing companies the keys to the kingdom.
The mayor said his goal is not to decimate an already-wounded taxicab industry but to strengthen it, and more importantly, to give Chicago consumers the choices they demand.
“I’m not giving it to them. I’m not giving it to Uber and Lyft. I’m making sure that the customers in the city of Chicago and its visitors have choice,” Emanuel said.
“Taxi drivers get up to a $10,000 [a-year] pay increase — exactly what they’ve been asking for for years . . . Things that riders for Uber and Lyft wanted they get, but they have to pay a bigger share on taxes than they’ve ever paid. And our customers — both in the city and visitors to the city — now have choice that they never had before. I consider that a win-win across the system.”
Emanuel scoffed at suggestions that the cab industry cannot survive the overhaul he has proposed. The mayor noted that there were similar warnings when Chicago became the nation’s first major city to order “regulatory oversight” of the nascent, but fast-growing ride-hailing industry.
“Everybody said you’d be killing the ride-share industry in Chicago. It surged. In 2011, when I introduced an increase in the hotel tax, everybody said, `You’re going to kill the hotel industry.’ We now have 8,000 more hotels. Cost-per-room is up. Our visitors and our convention business is hitting records,” Emanuel said.
“It is in a mosaic of things that you do that judgments are made. As other people have questioned certain changes we’ve made, they have actually prospered and the city has prospered because our customers, our visitors, our residents, everybody has had more choice and better service.”
Currently, ride-hailing companies are allowed to drop off passengers at O’Hare, Midway, and McCormick Place, but they leave empty. Pick-ups are strictly forbidden.
In exchange for the lucrative access, Emanuel wants Uber and other ride-hailing services to pay a $5 surcharge every time they pick up or drop off passengers at O’Hare, Midway, McCormick Place or Navy Pier. The new tax would generate $30 million in new revenue. Cabs pay a $4 ground transportation tax, but only after airport pick-ups.
To raise an additional $48 million, the mayor’s plan would also slap a 50-cents-a-ride surcharge on cab rides and raise the little-known, 30-cents-a-ride surcharge on Uber and other ride-hailing services to 50 cents.
Emanuel is also following the lead of two powerful aldermen by applying a multiplier to the ride-hailing surcharge, whenever Uber and other ride-hailing services take advantage of periods of peak demand to charge riders even more. If Uber charges triple the normal fare during a snowstorm, the 50-cent surcharge would triple—to $1.50 a ride.
The 15 percent fare hike would be Chicago’s first in a decade. City Hall claims it would put anywhere from $4,000 to $10,000 more a year into cabdrivers’ pockets.