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City Council poised to help cabdrivers without raising fares

Chicago taxicab fares have been frozen since 2005 — and that’s where they’ll stay, even though cabdrivers say they need all the help they can get in the fight for survival against ride-sharing.

The City Council is poised to make certain of it Wednesday by approving Mayor Rahm Emanuel’s plan to boost the annual income of struggling Chicago cabdrivers by up to $8,000, without raising fares.

Instead of raising Chicago cab fares that currently rank No. 32 among big cities, the mayor’s plan calls for the city to create a centralized dispatch system using a “universal taxi smartphone application” akin to ride-sharing.

Lease rates, fines and credit card transaction fees that gobble up driver income would also be dramatically reduced.

Many of the ideas originated with the taxicab industry after hard-fought negotiations over a ride-sharing ordinance that, cabbies insist, does not go far enough to level the playing field that has siphoned away their business.

“I don’t believe in raising fares on the consumer. I believe in finding reforms and efficiencies and doing the tough things that the bureaucracy used to impose costs on folks. That’s where the savings are,” Emanuel said on the day he introduced the ordinance.

“The taxi industry brought up some ideas. So we rolled up our sleeves, put pencil to paper. We have found savings in the regulations and reforms that will go to their bottom line so they’ll make more money, improve competition city-wide so all consumers win. And did it without raising the fare. I consider that a win-win. That’s why we’re not gonna raise fares. We’re not gonna put the burden on the consumer when we can ask the bureaucracy to shape up.”

Earlier this week, cabdrivers filled the City Council chambers and applauded the long-sought financial relief. Some said they were afraid of a fare hike because it could make them even easier for ride-sharing drivers to under-cut them.

“Cabdrivers have too long been treated as second-class citizens — even to the extreme point of being treated as criminals when we’re picking up and dropping off our passengers. We are struggling to keep our heads up underneath a system that is inherently unfair, unjust and…cruel,” said Cheryl Miller, a 20-year veteran cabbie.

“Vaguely and ambigulously-worded regulations more designed to elicit citations as opposed to promoting public safety create a hostile, predatory environment. This ordinance would not only provide drivers with much-needed economic relief through lease reduction rates and reduced credit card fees. It will also create a process for reforming the unfair rules and fines . . . We are just looking for equal treatment, and the city is finally listening to us.”

Tracey Abman, associate director of AFSCME Council 31, predicted that the mayor’s reforms would add $5,000 to $8,000 a year to the average cabbie’s bottom line. That’s even though she was hoping for even “greater savings” on lease rates.

Only the United Taxidrivers Community Council was willing to look a gift horse in the mouth.

“The city needs to do more if we are going to preserve a healthy taxi industry. It is not enough to give our hard-working, mostly immigrant workforce a living wage — nor does it provide an attractive enough income improvement to lure our drivers back from the ride-steal industry they have been flocking to,” said UTCC Chairman Fayez Khozindar.

One week after aldermen cast a historic vote to raise Chicago’s minimum wage to $13-an-hour by 2019, the UTCC’s Secretary-Treasurer Peter Enger told them cabbies “need a living wage” and won’t get it from the mayor’s plan.

“It is a first step, and we’re happy about it. But it will not benefit all cabdrivers. The independent owner-operators who do not pay credit card cashing fees because they process it through their own system, and the ones who do not pay leases because they own their own medallions are not getting any benefit at all from this ordinance,” Enger said.

Ald. Anthony Beale (9th), chairman of the City Council’s Transportation Committee, countered that the sweeping reforms that the Transportation and License committees advanced to the City Council floor for a final vote Wednesday were an “indirect fare increase” without further burdening consumers.

“This is a gigantic step to break the stranglehold the city has put on cabdrivers . . . It’s an increase without saying it’s an increase,” Beale said.

The UTCC had proposed a 10 point plan that included raising mileage rates and waiting times by 25 percent.

Under that plan, the cost of entering a cab would have remained at $3.25. But the charge-per-mile would have gone up from $1.80 to $2.40, while the waiting time would go to 20 cents for every 24 seconds, instead of every 36 seconds.

Chicago’s $13.80 fare for a five mile ride with five minutes of waiting time currently ranks No. 32 among the nation’s largest cities. The proposed change would have pushed Chicago into the top 10.

Emanuel ignored those demands but embraced many of the group’s other ideas to ease the financial squeeze on cabbies in a heated competition with ride-sharing companies.

They include:

  • Creating a city-wide dispatch system that would require all cabs to carry a new app modeled after the one pioneered by Uber and Lyft. A central dispatch system that includes all 7,000 Chicago cabs — instead of just a few hundred — will make cabs “more competitive” with ride-sharing and improve the quality of service to under-served neighborhoods, said Business Affairs and Consumer Protection Commissioner Maria Guerra Lapacek.
  • Reducing lease rates that gobble up nearly 40 percent of driver revenue by 10 to 20 percent — or $2,400-to-$5,600-a-year — and requiring a “lease credit” for all cabs bearing advertising.
  • Applying straight fares for residents of suburbs bordering Chicago, only when the trip originates at O’Hare and Midway Airports.
  • Increasing from 40 minutes to one hour the window for cabdrivers waiting at O’Hare to return to the airport and go to the head of the line.
  • Waiving the $4 tax that bankrolls McCormick Place and other convention activities for short trips.
  • Capping credit card transaction fees at 3 percent, instead of 5 percent.
  • Reducing by 60 percent — from $1,000 to $400 — the maximum fine that can be levied against cabdrivers for a host of violations.